FEMIP (Facility for Euro-Mediterranean Investment and Partnership), the European Investment Bank’s facility focusing on the Euro-Mediterranean area, is investing EUR 5 million from the European Union’s budget in a new investment company, the Building Block Equity Fund. This Luxembourg-registered Beirut-based Fund will make equity investments in innovative small and medium-sized enterprises (SMEs) in Lebanon. The signing ceremony took place today in Beirut in the presence of, among others, EIB Vice-President Mr Philippe de Fontaine Vive, Pascal Pierra, representing Averroès Finance, and Etienne Viard, representing PROPARCO (AFD group).
The driving force behind this Fund is the Lebanese organisation Bader, whose goal since May 2006 has been to promote business start-ups and an entrepreneurial culture in Lebanon. The EIB was the first European institutional investor to participate in this operation, thus sending out a signal of confidence in Lebanon’s economic prospects and acting as a catalyst for other local and international investors.
This investment forms part of the strategy of FEMIP, which aims to stimulate the private sector in the Mediterranean partner countries. Priority is given to supporting local SMEs, particularly through the use of tailored financial products – in this case private equity, a relatively recent phenomenon in Lebanon which is not widely available.
The Fund’s capital is USD 17 million (EUR 12.3 million). The EIB, with 22.5% of the shares, and Averroès Finance, with 24.2%, are the two main shareholders. The remainder of the capital has been subscribed by a number of members of Bader and eight Lebanese banks – BLOM, Banque Libano Française, Fransa Bank, Bank Audi, Bank Med, Lebanese Canadian Bank, Crédit Libanais and BBAC Bank – who have joined in this initiative to encourage and develop investment activity for the benefit of the Lebanese economy.
The EIB, a long-standing partner of Lebanon
The EIB has been active in Lebanon since 1978 and has invested over EUR 800 million in total, in particular to support the country’s reconstruction efforts in the water and sanitation infrastructure and transport sectors. At the Paris III International Conference on Support for Lebanon held in January 2007, the EIB also pledged EUR 960 million in new finance over the next five years for key projects as part of Lebanon's recovery, reconstruction and reform plan.