FEMIP is supporting small and medium-sized enterprises in Morocco with a EUR 6 million participation in a new investment fund specialising in mezzanine finance, which is currently difficult to obtain in Morocco

FEMIP, the Facility for Euro-Mediterranean Investment and Partnership, the European Investment Bank’s instrument for the countries on the southern shores of the Mediterranean, today provided EUR 6 million for a new investment fund, Capmezzanine SA, which was created on the initiative of Morocco’s Caisse de Dépôt et de Gestion.

This fund will acquire equity stakes in small and medium-sized enterprises in Morocco or provide them with mezzanine loans, a form of intermediate finance between short-term debt and a company’s equity that is only repaid after traditional debt. As this type of financial product is relatively new in Morocco, FEMIP will also support the fund management team with technical assistance provided by an external consultant specialising in mezzanine finance.

Modernising the banking sectors to improve support for SMEs, FEMIP’s long-term vision in the Mediterranean

This investment is in line with FEMIP’s strategy of stimulating the private sector in the Mediterranean partner countries. Priority is given to supporting local small and medium-sized enterprises, in particular by using financial products adapted to market requirements.

Strong growth expected in Morocco in the years to come

A study published by FEMIP in June 2007 on promoting private saving in Morocco showed that Moroccan firms should see significant growth in the years ahead. Mezzanine finance, which is particularly favoured by companies during the external growth, shareholder reorganisation or recapitalisation stages, should therefore be very useful.

FEMIP, Morocco’s partner

Since 1995, FEMIP has invested nearly EUR 2 billion in the Kingdom of Morocco, of which a third in the transport sector and a further third in the energy sector. It also regularly finances environmental protection projects and the construction of social housing in urban areas, a first in this sector outside the European Union. During 2006, the EIB acquired stakes in a Moroccan infrastructure fund and three regional funds covering Morocco. FEMIP is also supporting a number of Moroccan microfinance associations.