5 November 2007 - The EBRD is providing finance for its first equity transaction in Kosovo since the establishment of the UN mandate in 1999. The Bank is investing Euro 1.9 million to acquire a 33 percent stake in Pestova, a leading potato producer and processor and one of Kosovo's few exporters.
The EBRD finance will support the expansion of the fast-growing company’s business in potato processing under the brand name of Vipa. The financing will support the strengthening of Pestova’s market position through the introduction of new products and an increase in exports to neighbouring countries.
The financing will fund the purchase of a frozen potato processing line, expansion of the potato crops area, the production of potato seeds, construction of a new warehouse and the purchase of packaging machinery.
The company, which was severely damaged during the Kosovo conflict in 1999, resumed its activities in 2000.
Claudio Viezzoli, EBRD Director for the Western Balkans, said this project demonstrates that even small but profitable and well-managed companies with a strong commitment to corporate governance and a good business plan can benefit from EBRD financing. As no other investors offer equity financing for local SMEs in Kosovo, this transaction is expected to encourage other dynamic local companies to seek innovative financing which will contribute to the growth of the underdeveloped local economy.
The EBRD is providing the equity finance under the recently established EBRD-Italy Western Balkans Local Enterprise Facility (WB LEF) which provides individual investments in the range of €1-4 million.
WB LEF is an investment facility established by the EBRD with financial contributions and support from the Italian government. WB LEF is contributing to the economic recovery of selected Western Balkan countries (Albania, Bosnia and Herzegovina, FYR Macedonia, Serbia, Montenegro and Kosovo) through the provision of mainly equity and quasi equity financing to small and medium local enterprises.