European Bank launches
SME advisory program
EBRD seeking to buy private
equity mainly in renewable energy
The European Bank for Reconstruction and Development (EBRD) has launched the ‘Advice for Small Business Program for Lebanon’.
“We already have our first client, a dairy company producing cheese, in Northern Lebanon,” said Janet Heckman, EBRD’s Managing Director for the Southern and Eastern Mediterranean Region.
The program targets small and medium-sized enterprises (SMEs), which comprise about 90 percent of the business activity in the local private sector, she said.
The multilateral bank will provide, through the program, a wide spectrum of business advisory services such as strategic planning, marketing, operations management, quality management, energy efficiency, and financial management. The technical advisory will include such skills as how to apply for a tender, what production methodology to use, or how to target marketing strategies, Heckman said.
The program allows clients to access the services of both local and international advisors. The EBRD will also provide training to local consultants to improve advisory skills necessary for the success of SMEs.
EBRD targets several sectors across the country such as tourism, hospitality, agribusiness, and manufacturing. “We look particularly to develop companies located in areas where they have limited access to advisory services and information,” Heckman said.
The bank also provides financing services through equity investment and lending. Its first investment was an equity stake in Bank Audi. “Working with the local banking sector helps us get a feel of the economy and what the key forces are. In Lebanon we are new kids on the block, so it is crucial for us to work closely with the established banks who know the market very well,” Heckman said.
EBRD is also seeking to invest in the equity of the corporate sector. “There are many opportunities in manufacturing, services, agribusiness, and in renewable energy. Energy and power continue to be a key source for development in the country and this sector will be one of the areas of our focus,” Heckman said. EBRD has a mandate for green energy and is looking for opportunities in the renewable energy sector. “Lebanon is ideally positioned for renewable energy business,” she said. The bank usually invests in companies larger than SMEs because such investments require a lot of due diligence and expense.
The support provided by EBRD allows businesspeople to develop their skills and grow their business, becoming creditworthy for borrowing, she said. EBRD teams up with partner banks in the country such as Bank Audi or Fransabank to provide financing services to SMEs. EBRD plans to conclude two to three financing deals within the next few weeks. The total value of these new deals will be approximately equal to the money invested in the country so far, which has reached €91.6 million ($106 million), Heckman said. The deals, which will consist of lending programs, will be signed with one or two more banks as well as private sector businesses.
Lebanon became a recipient of EBRD investment in 2017. The bank has a team of nine people on the ground locally, most of whom are Lebanese nationals. EBRD has so far invested nearly €8 billion in 191 projects in the Southern and Eastern Mediterranean (SEMED) region.
Reported by Shikrallah Nakhoul
Date Posted: Oct 12, 2018