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International Internet Magazine. Baltic States news & analytics Friday, 21.06.2024, 17:01

Baltic Innovation Fund to promote small and medium-sized enterprises

Danuta Pavilenene, BC, BC, Vilnius, 26.09.2012.Print version
The European Investment Fund (EIF) together with Lithuania, Latvia and Estonia is launching an initiative which aims to encourage venture capital investment in the Baltic companies.


Over the next four years, the Baltic Innovation Fund (BIF) will invest EUR 100 million into the private equity and venture capital funds encouraging risk capital investments in small and medium-sized enterprises and their growth.


On Wednesday, the EIF and the representatives of the three Baltic States signed BIF management contract in Vilnius. EIF are investing EUR 40 million, while national agency of each country: Lithuania's Investment and Business Guarantees (INVEGA), Latvia's Guarantee Agency and Estonia's KredEx are allocating EUR 20 million each.


Prime Minister Andrius Kubilius who took part in the signing ceremony said that the establishment of BIF will increase region's attractiveness for innovations.


"The establishment of BIF is yet another step discussed many times in the Baltic Council of Ministers. I am glad that today we are making it a reality. I hope that the establishment of BIF will make the entire Baltic area even more attractive for innovations," said the PM at the signing ceremony.

The BIF investment process will start in 2013, when the EIF will begin assessing potential BIF managers to jointly establish new venture capital funds. Each manager will have to additionally attract at least equal amounts of private funds from pension funds and other private investors, bringing the fund's capital up to EUR 200 million. During a four-year investment period, the managers will receive funds that will be invested in innovative and rapidly growing small and medium-sized companies.

EIF Chief Executive Richard Pelly pointed out that the BIF initiative formed as a result of direct cooperation between the EIF and the Baltic States, creating a long-term investment program.

Lithuanian Economy Minister Rimantas Zylius said that the BIF will increase the availability of private and venture capitals to small and medium-sized companies with a high potential for growth.

KredEx Chief Executive Andrus Treier was convinced that the new fund will make the Baltic capital market more attractive to investors.

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