In its efforts to support the small business sector in Egypt, the European Bank for Reconstruction and Development (EBRD) in Cairo has provided its first direct financing to a small enterprise – Europack. The Bank’s finance is part of the EBRD’s Small Business Initiative, through which it has the capacity to provide direct finance to selected small and medium-sized enterprises (SMEs).
Europack, a leading private manufacturer of tin packaging solutions for industrial goods, will receive a €1.78 million-equivalent loan in local currency.
The EBRD investment will help Europack to expand its production by purchasing plastic packaging and general tin can production lines. It will also strengthen the company’s competitive position as a leading producer of tin cans in Egypt.
As part of the project the company will introduce new packaging for environmentally dangerous goods (such as chemicals) that will reach the necessary standards to acquire United Nations certifications. Certified cans are required for storing paints, varnishes and other chemicals that are exported to markets with higher environmental safety requirements.
Although SMEs represent the majority of enterprises in Egypt and account for 75 per cent of total employment, access to finance remains a key concern for the sector and resolving this issue is vital for the Egyptian economy.
“The Europack project illustrates the EBRD’s unique capacity to be able to provide both finance and technical support to our clients. Moreover, in receiving the UN certification, Europack will become the first packaging company in Egypt to obtain such a qualification, which sets an example for the sector,” said Philip ter Woort, EBRD Director for Egypt.
The EBRD technical support will finance an accredited auditor who will assist the company in adopting state-of-the-art standards in reporting, accounting and corporate governance. This will help improve the company’s performance as well as facilitate access to finance from local commercial banks. The EBRD technical support also helped Europack to access advice on business strategy and accounts management through local and international consultants.
The Bank’s Advice for Small Business programme in Egypt is funded by the European Union, the SEMED Multi-Donor Account (MDA) and the Middle East and North Africa (MENA) Transition Fund. The technical cooperation for due diligence was funded by the Southern and eastern Mediterranean (SEMED) MDA*.
The EBRD has invested over €1.7 billion in Egypt through 33 projects since the start of its activities in the country at the end of 2012. The Bank’s areas of investment include the financial sector, agribusiness, manufacturing and services, as well as infrastructure projects such as power, municipal water and wastewater and contributions to the upgrade of transport services.