The Risk Capital Facility for the Southern Neighbourhood provides access to equity and debt financing to small and medium-sized companies (SMEs) in the Southern Neighbourhood. The facility’s objective is to support private sector development, inclusive growth and private sector job creation.
Set up by the European Commission and the European Investment Bank, the facility builds on the success of the ENPI-FEMIP Risk Capital mandate 2007-2013.
The main activities of the facility include:
- investing in private equity funds;
- investing in and lending to microfinance institutions and microfinance investment vehicles;
- providing technical assistance to financial intermediaries or final beneficiaries.
Find out more details
The EIB structures private equity transactions typically by way of commitments into private equity funds, which, in turn, make equity-type investments in SMEs.
The EIB may consider direct investments into local enterprises, targeting mostly second-tier financial institutions (including leasing companies, insurance companies and other companies active in the financial services sector) that need capital to finance their growth but have limited access to the capital markets or institutional investors given their small size.
Microfinance operations aim to foster employment-generating activities by promoting and improving access to finance, focusing mainly on Microfinance Institutions (MFIs) in the Southern Neighbourhood.
Intermediaries
Selected intermediaries will serve in particular micro- and small enterprises, alongside low-income persons, and they will include newly created and existing MFIs, credit unions/cooperatives, banks wishing to downscale their operation to serve smaller businesses and other financial institutions, including microfinance investment funds/companies.
The EIB will pay special attention to Non-Governmental Organisations (NGOs) transforming into commercial entities, and to greenfield as well as existing institutions, which aim to expand their portfolios of microloans. The EIB may also invest in Microfinance Investment Vehicles (MIVs) with the purpose of on-lending to microfinance service providers.
Instruments offered
The EIB offers:
- long-term debt financing
- equity and quasi-equity financing
- subordinated loans and guarantees
Instruments will be designed on a case-by-case basis and depending on the requirements of the selected intermediaries and the characteristics of the relevant local market.
The Technical Assistance Window leverages the impact of the risk capital operations, notably through capacity building programmes. The Technical Assistance Window is dedicated to capacity building of financial intermediaries, mainly microfinance institutions and/or current and potential final beneficiaries.
These activities are typically implemented by a service provider and then selected and monitored by the EIB.
The Technical Assistance Window comprises of two phases:
- a start-up phase, during which, the service provider will focus on the diagnosis and needs assessment of the financial intermediaries, followed by
- an operational phase.
Financial intermediaries include:
- private equity funds (including venture capital funds)
- microfinance institutions
- microfinance investment vehicles
- banks and other financial institutions
Other innovative instruments may also be considered.
Find information on the support provided under the Financial instruments.
The Risk Capital Facility for the Southern Neighbourhood covers the following countries:
Algeria, Morocco, Tunisia, Egypt, Jordan, Lebanon, Syria* and Palestine**.
* Following EU sanctions in November 2011, the EIB has suspended all loan disbursements and technical advisory contracts for projects in Syria. The same applies for the Risk Capital Facility.
** This designation shall not be construed as recognition of a State of Palestine and is without prejudice to the individual positions of the Member States on this issue.
Apply
The EIB will examine proposals from interested financial intermediaries on a continuous basis, using its professional analysis and judgement.
EIB Global
For more than 50 years, the EIB has been the European Union’s international development bank. Our key investments across the world help create stability, promote sustainable growth and fight climate change everywhere.
What is blending?
Blending involves the strategic use of a limited amount of grant resources to catalyse additional financing for development projects. Grants are often combined with loans, equity, beneficiary resources or other forms of financing, with the aim of de-risking projects and making them bankable. Blending allows partners to get the most out of their grant resources and enhance their overall development impact.
Our blending facilities
The European Investment Bank carries out global blending operations, through seven regional investment facilities and other thematic blending funds.