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WESTERN NIS ENTERPRISE FUND

by Paul J. Norton

Securing financing for small, entrepreneurial projects is difficult anywhere in the
NIS.  For promising private-sector ventures in Belarus, Moldova, and Ukraine, the
Western NIS Enterprise Fund (the Fund) is now accepting proposals for financing. 
The Fund, which is privately managed, is capitalized at $150 million by the U.S.
Agency for International Development (USAID).  In addition to investing its own
funds, the Fund will seek to attract additional resources for private sector
development.  The Fund will actively seek corporate and financial partners from the
United States and the international community to leverage its own funds.

The Fund will make loans and equity investments in small- and medium-sized
companies, including joint ventures,  in the three Western NIS countries.  Loans
will range from $25,000 to $100,000, while  investments will range from
$25,000 to $5 million.  Larger projects will be financed by debt or equity,
depending on the specific requirements of the proposal.  Both private firms, and
firms in the process of privatization, will be eligible for financing from the Fund.  

Loan terms will be from several months to up to five years, with interest calculated
at market rates.  Rates will vary, based on the financial risk of each individual
project.  Likewise, loan repayment schedules will be determined based on the
specific requirements of each project.  Commercial insurance guarantees will not
be required, but personal guarantees may be expected of a funded venture's
management team and ownership. 
Working With the Fund

The Fund will consider investments proposals submitted directly from Western NIS
companies, or from U.S. firms establishing joint ventures with Ukrainian,
Belarusian, or Moldovan partners.  The Fund is selective in choosing projects to
finance, and will make investment decisions based on economic viability.  Funding
decisions are final, and the Fund will not reconsider applications that have been
declined.  The Fund's management and directors have exclusive authority over
investment decisions. 

Proposals may be submitted to any of the Fund's offices (see below).  The initial
submission should consist of a "Project Description," approximately 10 pages long,
that will enable the Fund to assess the attractiveness of the proposal.  The
description can be in Belarusian, Moldovan, or Ukrainian, although English or
Russian are preferred. 

If  a proposal seems promising after an initial review, the Fund will appoint a team
to evaluate it in depth.  The evaluation will entail extensive interviews with
management and on-site visits to the company.  Applicants should expect a
proposal to undergo several rounds of analysis, negotiation, and structuring.  Once
the team has completed its evaluation, it will submit its recommendations to senior
management.  Some projects may require approval of the Fund's Board of
Directors.  For more information on the Fund, including detailed specifications for
preparing proposals, call the BISNIS Flashfax and order document number 6894. 
The Fund can be reached  in New York at  (212) 906-1235 (voice) or (212)
751-4864 (fax), or the branch office in Kiev, Ukraine at +7-044-416-98-41 (voice)
or  +7- 044-417-14-19 (fax).  Offices in Belarus and Moldova will open in
1995.
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