Development Bank of Austria
The MFI Upgrading and Rating Initiative is funded by the Oesterreichische Entwicklungsbank AG (OeEB), the official Development Bank of Austria, which has been mandated by the Austrian Government.
OeEB was set up in March 2008 to support viable project in the fields of private sector and financial services in developing countries, mainly through financing products and advisory programmes. The MFI Upgrading and Rating Initiative in East Africa is the largest advisory programme currently implemented by OeEB.
Mandate & Know-how
OeEB is specialised in realising private-sector projects that:
- require long-term financing and that can service their borrowings out of their own cash flow
- have a sustainable impact on the regional economic development
As a wholly-owned subsidiary of Oesterreichische Kontrollbank AG (OeKB), it is a private financial entity with a public mandate. At the same time it benefits from the network and international know-how of OeKB Group.
Long-term customised financing solutions
OeEB is engaged in challenging markets, notably in developing countries. In this context, it provides tailor-made financing solutions for a diverse set of long-term investments that are usually not available in these markets.
Because of its special mandate, OeEB can assume higher risks on individual transactions, compared to commercial banks (e.g. loan volume, tenors, high-risk countries). OeEB hence takes up the role of closing the gap between services of the Austrian Development Cooperation and Cooperation with Eastern Europe (ADC), the Austrian Development Agency (ADA), and the financing solutions offered by commercial banks.
OeEB may also engineer projects in countries for which an appropriate instruments would be missing otherwise. As a result, rather than competing against the commercial lending sector, the products of OeEB complement it.
Commitment to a sustainable development impact
Inasmuch as OeEB is committed to safeguarding the objectives of the Austrian Development Cooperation, all of the projects backed by OeEB are expected to contribute to a sustainable on-site development.
Tools
OeEB supports viable projects in developing countries that are primarily located in the private sector, including the financial sector. On a case-by-case basis, it may also support infrastructure projects in the public sector.
Soft loans continue to be exclusively offered and processed by Oesterreichische Kontrollbank AG (OeKB) in Austria.
Instruments
The instruments supplied by OeEB do not necessarily need to be tied to Austrian domestic content. Any company, may it be a supplier or investor, from either an industrialised or developing country is eligible to apply for financing.
The crucial criterion is that the project is located in a developing country, as specified by the Development Assistance Committee of the OECD. Certain countries are on an Exclusion list, which can be accessed on the website of OeEB. A further important aspect is the project's impact on local development. In particular, this refers to a project's contribution to poverty reduction, to higher employment levels, to know-how transfer or to sustainable development.
In the light of this objective, OeEB employs two major instruments for the realisation of its projects
- Financing Products, e.g. investment loans and credit lines
- Project-supporting measures, so-called Advisory Programmes (AP)
Advisory Programmes (AP)
The Republic of Austria has earmarked special budgetary resources for activities that are used for a variety of activities supporting developmental aspects of projects in their different phases. These grants, which can be used in preparation for or accompaniment to financing projects, aim at increasing the development impact of projects, e.g. through the provision of technical expertise, staff trainings or environmental assessments.The overriding goal of all these activities is to foster sustainable development.
In this framework, the MFI Upgrading and Rating Initiative aims to support the microfinance sector in East Africa by upgrading selected Microfinance Institutions through tailored capacity building and training services.
A project implemented by the » ATC Consortium
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