OPIC, the US state-backed development finance institution, has committed $40m to CapMan Russia II, a €175m fund that will support small and medium-sized enterprises (SMEs) in Russia’s outer provinces.
The new fund will invest in fast-growing SMEs predominantly in regions outside Moscow and St Petersburg, where private equity has typically been unavailable in the past.
CapMan Russia II will invest in sectors such as consumer goods and services, health care, manufacturing and agriculture, IT and telecoms, as well as construction.
These industries are expected to show strong growth in the future, supported by increasing consumer consumption and rising standards of living in Russia.
“Small businesses in Russian regions outside of Moscow and St Petersburg have terrific untapped potential, but have not had access to the capital they need to grow,” OPIC president and CEO Elizabeth Littlefield said in a statement.
“This fund will help to fill that gap in high-growth sectors that stand to have the most significant development impact.”
Established as a US Government agency in 1971, OPIC mobilises private capital to help solve critical development challenges and in doing so, advances US foreign policy.
Because OPIC works with the US private sector, it helps US businesses gain footholds in emerging markets catalysing revenues, jobs and growth opportunities both at home and abroad.
OPIC achieves its mission by providing investors with financing, guarantees, political risk insurance, and support for private equity investment funds.
OPIC has supported more than $200bn of investment in over 4,000 projects, generated an estimated $75bn in US exports and supported more than 277,000 American jobs.
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