Under its Facility for Euro-Mediterranean Investment and Partnership (FEMIP), the European Investment Bank is investing the equivalent in Egyptian pounds of EUR 5.6 million in a 9% shareholding in Beltone Capital, an Egyptian investment company.
Beltone Capital will invest in private sector growth companies, primarily in Egypt, providing them with strategic guidance and investment and operational expertise. The EIB, with its representation on the Board of Directors of Beltone Capital, will support the development of private equity in Egypt and widen the sources of funding available to local private enterprises.
This is the first time that the EIB invests FEMIP risk capital resources in an open-ended investment company. Both the EIB, on behalf of the shareholders, and the Investment Manager have contributed to finding innovative ways to channel investors' money into this new financial vehicle. The novelty of the structure stems from providing shareholders with the protective elements of a close-ended fund, while keeping the benefits of straight equity in an investment company.
The presence of the EIB as a shareholder is expected to add to Beltone Capital's status in the market, and help attract future capital. By accepting EIB's stringent demands in terms of governance, business practices, environmental and social management, Beltone is signalling its intention to comply with the highest standards and best market practice.
Together with its loans and technical assistance grants, risk capital is one of the main instruments used by FEMIP to help the Mediterranean partner countries meet the challenge of economic and social modernisation and enhanced regional integration. The present risk capital investment is financed from the Community budget (MEDA resources).