Private Enterprise Partnership - Extension In May 2000, the Board approved an IFC contribution of 12.6 million over a three-year period to create the Private Enterprise Partnership and support the implementation of donor-funded technical assistance programs in the former Soviet Union.  This project, which begins on July 1, 2003, extends the partnership program for three additional years.     Partnership program:    The objectives of the partnership are to: support the creation and growth of small and medium-sized enterprises (SMEs); promote capital investment; and improve the business enabling environment.      The partnerships projects fall into four program areas:   (1) Linkages: building supply and distribution chains; (2) building financial markets; (3) SME business support services and policy advice; (4) corporate governance.        IFC role:    The formation of the partnership in June 2000 has since led to increased effectiveness, improved practices, and increased impact of IFCs technical assistance in the FSU.  While donor funding is used to finance specific programs in the former Soviet Union, IFC provides the administrative and managerial structure that supports project work.  The added value of the partnership includes:     ·	solid financial management and internal control systems;   ·	capacity to develop new programs;   ·	strong monitoring and evaluation;   ·	a communications strategy for the region;   ·	solid financial management and internal controls; and,   ·	a dedicated team of local and expatriate professionals supported by effective human resource management.     Closer links with investment work   :  The linkages with investment work are achieved through close cooperation with investment staff.  The partnership has a manager focused on projects in the financial sector, two managers working with a supply chain specialist focused on the real sector, one manager focused on agribusiness projects, and a fifth dedicated to corporate governance.  These staff work closely with their investment counterparts to develop projects that address obstacles to investment by IFC and other investors and/or link to an existing IFC investment to increase the development impact on the local community.  This has already proved successful in the leasing and dairy sectors, and new initiatives are underway in forestry, furniture, mining, shipbuilding, and paper products.     Developmental impact:    The impacts of the partnership on the private sector in its first two years have been significant:     ·	Establishment of long-term business relationships between local enterprises and foreign investors;   ·	Increased access to financing for SMEs, including credits, leasing finance, and direct investment;   ·	Improvements in the business enabling environment, in areas affecting agriculture, leasing, corporate governance, and general regulation of SMEs;   ·	More effective and sustainable local institutions, including business associations, providing SMEs with financial, advisory, and advocacy services; and,   ·	Improved protection of shareholders rights and corporate governance.      The partnership trains and consults local firms to strengthen their abilities to partner with foreign investors, particularly as suppliers.  This increases opportunities for local firms to grow, improves conditions for investment, and increases the development impact of existing investments, all to the benefit of local communities.  Many of these projects involve an IFC investment and substantially increase the development impact of IFCs financing.       An extension of the partnership will enable this work to continue, as well as allow it to develop new program areas.  Some possible areas are micro-finance and micro-leasing, housing finance, quality development for local manufacturers, alternate dispute resolution, corporate governance for the banking sector, and energy efficiency.