The Chief Executive of the European Investment Fund (EIF), Richard Pelly, and the Minister of Economics of Latvia, Kaspars Gerhards, have today signed the first Funding Agreement for a JEREMIE Holding Fund (HF) in the Baltic States under the JEREMIE initiative. The Minister for Special Assignments for the Administration of EU Funds, Normunds Broks, was also present.

The overall capital amount will exceed EUR 183m (129 million Lats), which EIF will manage on behalf of the Latvian Ministry of Economics; the funding comes from the Operational Programme "Entrepreneurship and Innovation" supported by the European Regional Development Fund (ERDF).
EIF activities will include the development of new financial engineering structures and products, primarily in venture capital, technology transfer, export credit and guarantees benefiting Latvian SMEs (small and medium-sized enterprises) and micro-enterprises. This initiative is part of an overall Government programme to stimulate further dynamism in the Latvian economy which will translate into higher growth, renewed and enhanced job prospects and a healthy and expanding SME sector.
EIF's Chief Executive, Richard Pelly, said: "The commitment of capital and human resources to this initiative is a clear sign that the Latvian Government seeks to stimulate further this key sector of the economy. We are adopting an innovative and efficient financial engineering approach to the financing of its SMEs and micro-enterprises, and are developing a partnership approach between EIF and the Latvian Guarantee Agency. We look forward to a dynamic and fruitful cooperation in the framework of the JEREMIE initiative."
The Minister of Economics, Kaspars Gerhards, declared: "Signing of the Funding agreement with EIF on establishment of Holding Fund for financial instruments is one of the priorities in 2008. The selection of the first financial intermediaries is planned to be completed by the end of the year. The Holding Fund overall capital amount will exceed EUR 183m to facilitate SMEs access to finance, thus foster increase of production capacity and export, competitiveness of entrepreneurship and further development of SMEs in Latvia."
The Minister for Special Assignments for the Administration of EU Funds, Normunds Broks emphasised that the Holding Fund is expected to be an important instrument for the whole development of national economy: “At this moment of time when development of global and national economies are slowing down we are looking for new and effective ways of supporting growing companies to adjust to the changing economic situation. We truly believe the Latvian Holding Fund with the experienced guidance from the European Investment Fund will be a factor of positive change to expand national exports, productivity rise and develop new innovative production. We also expect this instrument to be fully operational already this year”.

About EIF

EIF’s central mission is to support Europe’s small and medium-sized enterprises by helping them to access finance. EIF designs and develops venture capital and guarantee instruments which specifically target this market segment. In this role, EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth, and employment. EIF’s total commitments to Private Equity funds amounted to over EUR 4.5bn at end June 2008. With investments in some 286 funds, EIF is a leading player in European venture due to the scale and the scope of its investments, especially in the high-tech and early-stage segments.

EIF’s commitment in guarantees totalled over EUR 11.4bn in 185 operations at end June 2008, positioning it as a major European SME guarantees and securitisation actor and a leading micro-finance guarantor.

About JEREMIE

JEREMIE (Joint European Resources for Micro to Medium Enterprises) is a joint initiative launched by the European Commission (DG Regio), EIB and EIF to improve access to finance for SMEs in the EU within Structural Funds framework for the period 2007 - 2013. JEREMIE enables the EU Member States and Regions to set-up holding funds in order to support SMEs, start-ups and micro-enterprises in a flexible and innovative way with a sustainable approach. Holding Funds will provide SMEs, through financial intermediaries, with a wide range of financial instruments like equity, venture capital, guarantees and micro-loans, together with potential leverage by EIB resources. Sustainable, tailor-made and revolving financial instruments, aiming to develop and foster the role of entrepreneurship within the EU policy are key elements of the Lisbon agenda and help the structural funding to deliver greater benefits to the market (leverage effect). Latvia is the third country amongst EU Member States to sign a Holding Fund Agreement with EIF (after Greece and Romania). This agreement is expected to be one of the largest overall capital amounts in the EU.

For further information, please contact Delphine Munro, d.munro@eif.org , +352 42 66 88 237, or visit www.eif.org/jeremie