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| Crimson Capital Selected Projects
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Kosovo Crimson Finance Fund
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| Crimson Capital |
2008
- Ongoing
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Crimson Capital has secured funding and developed an SME Fund in Kosovo based on the highly successful Macedonia SME Finance Fund model. The Kosovo Finance Fund is an innovative non-bank financial institution that will be uniquely positioned in the Kosovar marketplace, addressing the needs of entrepreneurs and businesses that are not being adequately served by existing institutions. It will provide critical financing to Kosovar businesses in sectors which have been underserved previously, including women, rural, and minority owned enterprises.
Loans from the Kosovo Finance Fund will increase sales, profits, jobs, productivity, competitiveness, and credit-worthiness of its clients, by helping these businesses become “bankable” for micro finance institutions and banks. The Fund will bring innovation, customer orientation, and leadership to the financially underserved segments of the Kosovo market, and will make its financing available to all regions of Kosovo and across all industry sectors. The SME Fund will begin lending in the third quarter of 2008.
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Promoting Integrated Development (PID) in Peru
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PID is an alternative development program designed to engage new areas that are ripe for post eradication programs along with deepening involvement in communities that agreed to voluntary eradication by consolidating gains through furthering economic development, building social capital and strengthening local governance. PID will also provide assistance to select new communities following forced eradication in San Martín, Huánuco and Ucayali departments of Peru. The PID team will have a strong and direct hands-on involvement in post eradication and will continue to rely on producer associations and municipal governments to implement program consolidation activities. Crimson Capital is a subcontractor to Chemonics International on this activity and will be implementing the finance component of the program to increase and improve access to finance in the program’s targeted areas through the introduction of new products, value chain finance and a range of training and technical assistance to local lenders.
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Madagascar Technical Assistance for the Implementation of the ABCs Services and Strategies in Rural Agribusiness Development Program (ABIP)
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| Millennium Challenge Account (MCA) Madagascar |
2007
- 2009
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This recently awarded contract is intended to support the capacity of a network of newly developed agribusiness service across the country. The main objective is to create a rural agricultural and business promotion system that is market-driven, demand-based and customized to the end-user in the delivery of services to improve production, marketing and business practices. Fundamentally, this program is expected to lead to a well-functioning ABC network, attract investment and link Malagasy products to markets, and ultimately alleviate poverty across Madagascar. A critical factor for the success of this project is to redirect the focus of Malagasy farmers/producers to operate their farms as commercial opportunities, from a business perspective, rather than being subsistence-oriented and selling only some of their harvest. Crimson Capital is currently developing a business plan for the main service center, focused on developing appropriate controls and procedures along with a long term plan for sustainability beyond donor funding.
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Kosovo Economic Management for Stability and Growth (EMSG) Project
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Crimson Capital is providing advisory services to the Ministry of Energy and Mining (MEM), the Project Steering Committee (PSC) of the Lignite Power Technical Assistance Project (LPTAP), and the Government of Kosovo for reform in the energy sector. Activities include assistance on the development of the 3 billion EUR LPTAP program consisting of a new lignite mine and 2,000 MW lignite-fired power plant, future disposition of existing power plants, legal and regulatory reform, and the privatization to a foreign strategic investor of the distribution and supply functions of Korporata Energjetike e Kosova (KEK), the electric utility. Crimson Capital is a subcontractor to BearingPoint on this activity.
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Macedonia SME Commercial Finance Fund
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| USAID, NORFUND, Crimson Capital |
2003
- Ongoing
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http://www.smef.com.mk
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As prime contractor, Crimson designed and manages this $3 million fund to provide innovative, short-term working capital finance products to micro, small, and medium enterprises (MSME) in Macedonia. The Fund directly targets the problem of the “missing middle,” in which the vast majority of companies in developing countries cannot obtain short-term working capital financing needed to grow, employ more people, increase exports, and become competitive and viable for the long-term. The fund utilizes products such as purchase order finance and pre-export financing to fill address the lending needs of the SME sector.
In just over four years of lending, the SME Fund has supplied over 190 loans totaling more than $13.6 million to Macedonian MSMEs, and has created more than 1226 new permanent jobs, including over 688 jobs for women and 155 for minorities. SME Fund loans have stimulated an average yearly increase of 25% in revenues and 780% in profits for client MSMEs, and have generated $47.4 million in new exports. The SME Fund recently received new investment from European investors, doubling its size to more than $3 million in lending capital. The SME Fund has extended loans to all regions of Macedonia, and in all major sectors of the economy, including food processing, trade, textiles, IT, leather goods, and construction materials.
“The Performance of the SME Fund in Macedonia has far exceeded our expectations. It has been successful and it has served as a model for USAID
and Crimson SME Lending programs in other countries.”
Richard Goldman, Mission Director, USAID Macedonia
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Doing Business Case Studies in Central and East Africa
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| International Finance Corporation (IFC) / USAID |
2007
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Crimson recently completed four case studies for the IFC and USAID in Kenya, Rwanda, Tanzania, and Uganda on specific reforms in areas related to licensing reform, trade across borders, and contract enforcement. These studies focused on reforms completed by the governments in these countries in areas of relevance to the World Bank Doing Business rankings. Analysis looked at the history and development of the reforms, implementation to date, and challenges and benefits of these new approaches of these countries to try to improve the ease of doing business.
These case studies are being compiled along with others completed into a handy guide for governments in other emerging markets and will be made available through the World Bank’s Doing Business website. The idea being that they provide a breadth of real life experiences in specific reforms initiatives that can help countries select the best model and approach for improving their business environment.
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Macedonia Agribusiness Activity (MAA)
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Crimson Capital is partners with ARD, Inc. on this newly awarded project under the RAISE Plus IQC. MAA will primarily work in two areas, pre and post harvest in key agricultural value chains in Macedonia to help increase value added sales and exports by helping processors and producers compete more effectively.
Crimson will utilize its 11 years of experience in Macedonia to help link agribusinesses with finance, investment, and trade opportunities. Through Crimson’s SME Finance Fund as well as other local banks and financial institutions, Crimson’s team will help Macedonia business source capital to enable them to expand and improve production as well as to increase orders. Crimson’s team has already developed a Finance Manual for agribusinesses to help them access finance opportunities and be better prepared to approach lenders and potential investors.
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Study on the Development of the Bond Market for Mortgage Backed Securities (MBS) in Bangladesh
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| International Finance Corporation (IFC) |
2006
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Crimson completed a detailed study for the IFC on the main gaps and issues impacting the development of debt capital markets in Bangladesh, especially for issuance of corporate bonds, and asset backed securities (including mortgage backed securities). This included a thorough analysis of the current state of the Bangladesh debt market, profiles of institutional investors, and analysis of the secondary markets as well as current legal and regulatory obstacles. This report also laid out recommended steps needed to remove those critical impediments and actions that should be taken in the short, medium, and long term to improve the functioning of both the primary and secondary markets.
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El Salvador Financial Services for SMEs Program
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The objective of this project is to enable no less than nine FIs to expand lending and other financial services to underserved markets and introduce viable loan products that better serve SMEs’ financing needs. Of the nine organizations, two are commercial banks currently working with USAID under the Development Credit Authority, and two are Non-Banking Financial Institutions (NBFIs) that will become regulated institutions within the first two years of implementation.
In addition to the work of the resident Chief of Party, Crimson Capital is providing short term expertise to help partner institutions to develop new working capital finance and leasing products to better reach the SME clients. Crimson’s experts have already completed an analysis of potential products that partner banks could employ to address market gaps and has begun implementing a pilot purchase order financing program with local banks.
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Indonesia Anticorruption and Commercial Court Enhancement (In-ACCE)
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USAID-funded activity designed to assist the Supreme Court of the Republic of Indonesia in the implementation of the “2004 Blueprint for the Development of a Commercial Court and establishment of an Anticorruption Court”. This project is designed to introduce reforms in these specialized courts, with emphasis on improving operational capacity, increasing government transparency, developing case management, facilitating public access to information, and promoting the overall USAID/Indonesia Economic Growth Strategy. A detailed assessment has already been completed, outlining necessary steps for improvement and reform of the Commercial and Anticorruption Courts. Crimson experts have worked in the areas of court administration and reform, to improve the functioning and accountability of court institutions.
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Competitive Enhancement and Enterprise Development (CEED) Project in Moldova
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CEED seeks to enhance the competitiveness of Moldovan private enterprises in the global market and to foster a supportive business environment that stimulates and rewards vibrant economic growth. CEED is working to develop industry clusters of the Moldovan economy such as wine, textiles/apparel, and information and communications technology.
Crimson’s focus areas under CEED are increasing access to finance for Moldovan enterprises with the development of new trade financing products, and expanding trade and investment opportunities in the targeted industry clusters. Crimson’s exports have already completed a detailed analysis of trade finance and are developing a framework for interventions under CEED to catalyze increased lending and development and enhancement of new trade finance products.
CEED has selected two partner banks to implement this program and Crimson’s experts are providing hands on training to introduce purchase order financing and other products to the Moldovan market. Already, partner financial institutions have introduced purchase order finance to the Moldovan market, extending more than $1.7 million in pilot loans resulting in over $3.8 million in sales and exports. This pilot program has achieved substantial leverage effects in terms of results of the new loans. To date, the program continues to generate a total POF loan portfolio that is more than 7 times the total cost of assistance provided. Sales generated from the POF loans are already more than 21 times the total cost of assistance provided. Three additional banks have signed up for the program and will begin introducing POF in 2008.
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Rural Competitiveness Activity (ARCo), Bolivia
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ARCo seeks to stimulate alternative development activities in two key Bolivian regions, the Yungas and Chapare. Program components include:
- Strengthening sector and firm level competitiveness through technical assistance and development of market opportunities and increased investment in targeted regions
- Policy and legal reform to lift key constraints on regional and national economic growth
- Improvement of infrastructure and public services
Crimson is leading the finance component of the project by broadening access to financing for rural producers. Crimson has completed a supply-side analysis of the financial sector and is developing integrated financing mechanisms for targeted value chains in order to increase demand for products and the competitiveness of rural actors. Through a competitive process, Crimson’s team has selected FIE, a leading Bolivian NBFI to develop new value chain financing products in the Yungas and Chapare. FIE has opened 5 new lending branches in these regions, providing full banking services to communities which will provide much needed financing to stimulate licit economic activities in these regions.
This value chain finance program has produced a more than $5 million in total credit to more than 1,000 clients, including 252 value chain finance details worth $912,000 to help rural farmers and businesses become more competitive. Through technical assistance and training from Crimson Capital, FIE has completed the first formal purchase order financing loans in Bolivia for export oriented associates and cooperatives, totaling more than $200,000. This program has also provided an avenue for rural producers to open up more than 2,700 savings accounts and has pushed a reduction in interest rates in the regions substantially through increased competition.
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Preparing the Northeastern States Trade and Investment Creation Initiative, India
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| Asian Development Bank |
2005
- 2006
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The project is designed to catalyze the successful transformation of the private sector in northeastern India in response to international market challenges and issues facing the sub-region. Assistance is focused on developing innovative approaches to greater economic integration of the region, and intensifying global and intraregional transport, communication and information, trade, and investment activities. Crimson exercises responsibility for design and development of a finance facility to promote exports for private sector development.
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Cluster and Business Support in Kosovo (KCBS)
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Under the SEGIR II Privatization IQC, Crimson is assisting Chemonics International in project implementation. Employing an integrated approach and cluster-based strategy, KCBS is energizing functioning value chains to stimulate employment, sales, finance, and investment in key sectors such as meat, dairy, eggs, animal feed, fruit and vegetables, and construction materials.
Crimson professionals are developed strategies to overcome legal and regulatory barriers as well as to improve access to finance for key industries. Based on an analysis of the existing finance sector, completion of relevant sector studies, and determination of the gaps in the market, Crimson developed the Concept Paper and draft Action Plan for a new DCA Bond Guarantee with Raiffeisen Bank Kosovo. To increase lending opportunities, Crimson also designed and implemented two Finance Fairs, linking hundreds of businesses directly to financial institutions to receive loans and investments. In 2006, Crimson provided technical support and assistance to facilitate new joint venture operations in the construction sector, valued at several million Euros.
Currently, Crimson’s finance experts are introducing a new program to introduce leasing and purchase order finance to the Kosovo market. Through this intervention, Bank for Business in Kosovo has already begun leasing of vehicles. Crimson also provided technical expertise to the construction and building materials sector, to help increase the productivity and competitiveness of partner businesses.
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Preparing the Madagascar Market and Trade Development Program (BAMEX)
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BAMEX aims to boost competitiveness and improve the enabling environment for trade, investment and private sector development in Madagascar. The market-oriented program is strengthening linkages along key product chains, augmenting capacity for producers and exporters, and identifying and generating export and trade opportunities. Crimson’s primary role is to develop market capacity and trade linkages for key industry sectors.
Crimson professionals facilitated new export opportunities for Malagasy exporters, now able to reach major European buyers for products such as litchis and vanilla. Crimson’s experts coordinated visits of large-scale European importers to Madagascar, resulting in sales orders for two Malagasy exporters.
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Strengthening the Competitiveness of Private Enterprise in Uganda (SCOPE)
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SCOPE has expanded the competitiveness of targeted subsectors in Uganda by promoting private sector-driven market initiatives, increasing institutional capacity for competitiveness, structuring a results-oriented dialogue on sustainable private and public competitiveness, and strengthening the environment for broad economic growth through increased trade. SCOPE promotes the formation of business-driven economic clusters in the coffee, cotton, horticulture (flowers and vanilla), maize and beans, oilseeds, dairy, and fish subsectors, as well as the tourism sector.
Two of the three long-term expatriates working on the project are Crimson professionals who lead the efforts on subsector development and on trade and facilitation. Crimson’s team achieved substantial increases in sales and exports, completed national sector strategies and business plans, improved public-private partnerships, enhanced public awareness of competitiveness issues, advanced the resolution of VAT returns, obtained progress on upgrading and expanding the cold storage facility at Entebbe airport, and boosted the capacity of both government and private sector institutions.
Crimson’s team also assisted the Government of Uganda and entrepreneurs with a new, quality branding strategy to promote Ugandan products in regional and international markets under a new tagline: ‘Uganda: Gifted by Nature.’ Crimson’s experts have also helped develop three new investments in the floriculture sector as well as new sales opportunities in the US, with over 500,000 stems delivered.
See www.USAID.gov/press/releases/2006/pr060222.html for USAID’s profile on Uganda’s flower exports to the U.S. supported by SCOPE.
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Preparing the Market Access and Productivity Growth for the Private Sector Project in Nepal
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| Asian Development Bank |
2003
- 2004
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Technical assistance on this project consisted of 4 key components: (i) identifying further policy, legal, and institutional constraints constraining private sector growth, (ii) analyzing recent development of Nepal’s competitiveness, (iii) determining key factors constraining existing market capabilities and areas of opportunities, and (iv) developing and instituting mechanisms to help the private sector overcome identified constraints.
Crimson designed and created a private sector fund to catalyze investment and growth opportunities in the Nepalese SME market. Crimson structured an innovative 15 million USD financing vehicle that incorporates equity, quasi-equity, and debt to maximize financing and investment opportunities for SMEs in Nepal.
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Colombia Forestry Development Program (CFDP)
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CFDP’s goals are to increase income and employment in rural areas, strengthen the competitiveness of the forestry sector, and to improve the technical capacity of rural economic alternatives that are both economically and environmentally sustainable. The project encompasses an array of activities, such as policy reform issues, capacity building and market generation activities, natural and plantation forestry management, the development of a Commercial Forestry Development Fund, and exploration of new opportunities for trade and exports.
Crimson is supporting the prime contractor, Chemonics International, with technical assistance for co-investment fund activities, revitalization and preparation of forestry businesses for strategic investment, design of a forest fund mechanism to stimulate investment and development of sawmill operations, including the selection, procurement, and installation of equipment and launch of operations.
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Mongolia Economic Policy Reform and Competitiveness (EPRC)
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EPRC is designed to accelerate and broaden sustainable economic growth in Mongolia’s private sector by invigorating the enabling environment and creating more competition within industries and sectors. The project harnesses consensus building, public education, energy sector support, policy assistance, and cluster development and support. Crimson is assisting the prime contractor, Chemonics International in the last two areas by developing and supporting critical industrial sectors by pursuing growth in increased revenues and employment.
Crimson professionals drafted the Concessions Law, which will help pave the way for privatization and foreign investment, and have guided interventions in housing finance policy and methods that are currently being implemented by key public and private sector actors.
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Armenia Micro Enterprise Development Initiative (MEDI)
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MEDI is designed to strengthen the business and enabling environment for Armenian micro and small enterprises (MSEs) by increasing access to financial services, improving MSE capacity through sustainable Business Development Services (BDS), reforming the legal, regulatory, and policy framework, and enhancing trade and investment opportunities. Crimson has provided technical assistance and training to eight leading Armenian banks to introduce Purchase Order Financing (POF) and other types of trade finance to the Armenian MSME market.
The results: 52 new trade finance loans (including POF) totaling $5.8 million. To widen understanding and use of this type of financing, Crimson organized three MSME Finance Workshops with representatives of all leading Armenian banks and the Central Bank of Armenia (“CBA”), as well as a business-to-business meeting (B2B) on finance issues between the banks and MSMEs. Crimson also orchestrated a B2B meeting for Armenian and Georgian firms in the construction and building materials sectors, bringing together 70 firms and organizations to meet each other and conduct business from buying and selling products and services to developing partnerships.
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Paraguay Poverty Reduction Program
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Crimson is a subcontractor to Chemonics International on this three-year project, taking a demand-driven approach to stimulate economic growth and development in three key economic corridors of Paraguay. Crimson helped select Paraguayan companies to export their products to European markets, including herbal teas, food products and textiles. Crimson completed export deals for a Paraguayan herbal tea company to introduce its products to the European market.
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Privatization and Restructuring of the Macedonia Electricity Company (Elektrostopantsvo na Makedonija ESM))
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| Government of Macedonia |
2002
- 2006
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Crimson is co-lead investment bank with the Meinl Bank Consortium (MBC), with responsibility for advising the Government of Macedonia(GOM) on the unbundling, restructuring, and privatization of the vertically integrated electric power utility ESM.
The project targets reform of the legal and policy framework for the energy sector and restructuring of the regional electricity market, working towards compliance with the Athens Protocol. Program components include:
- Creating detailed restructuring plans
- Assuring due diligence in technical, commercial, financial, tax, and legal frameworks
- Delivering recommendations on the structure and regulation of the electricity market in line with European standards
- Preparing and implementing actual restructuring and privatization
Crimson assisted the GOM in obtaining a key $45 million USD pre-privatization investment from the EBRD for ESM and is a member of the government’s steering committee for the restructuring and privatization of the energy sector. On March 17, 2006, the GOM approved the sale of 90% of AD ESM, the Macedonian Electricity Distribution Company, to the Austrian utility EVN AG for €225 million, along with an investment commitment of €96 million, and secured a regional record price per distribution customer. European and Macedonian press and Transparency International praised the successful privatization transaction, both for the amount paid and the professionalism and openness of the process.
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Kosovo Business Support Program (KBS)
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KBS deployed technical assistance to Kosovar companies and agribusinesses to achieve viability and competitiveness by improving their operations, finance, marketing, and ability to attract financing. Developing sustainable local capacity for Business Development Services (BDS) and building new trade and investment linkages comprised Crimson’s major foci under this program.
Crimson put together 22 B2B meetings and 12 trade fairs with 893 Kosovar businesses attending, resulting in over €25 million from 712 new trade and investment transactions. Crimson’s long-term consultant managed the Northern Kosovo Office for better regional cooperation with Serbia, and its short-term consultants applied their talents to improve accounting/auditing training and certification, multiplying trade and investment in B2B relationships, and boosting the competitiveness of the textile sector. KBS collaborated with over 1000 SMEs and helped 718 of its participant firms to realize a 20% increase in sales. Operational profitability at 1,675 firms increased by 5% or more, with over 1,651 new jobs created.
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Macedonian Business Resource Center (MBRC)
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www.mbrc.com.mk
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USAID and Crimson Crimson established the MBRC to help Macedonian businesses streamline and strengthen their competitiveness, financial management, operations, service delivery, and marketing. The project enhanced local ability to export their products, raise capital and attract join venture partnerships.
Over 350 companies benefited from improvements and restructuring, and the MBRC trained 4,500 local managers, consultants, and government officials in 40 key subject areas. During the last three years of the project, MBRC facilitated over $95 million in trade and investment in more than 1,100 transactions. The MBRC also focused on capacity building, and incubated and spun out six independent, sustainable local entities which are now 100% self-supporting, including 4 consulting firms and 2 NGOs.
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USAID Restructuring Team to the Czech Ministry of Industry and Trade and to Komercni Banka
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The team, including Crimson experts, delivered training, technical restructuring assistance, and policy/legal advice to Czech companies, the Ministry of Industry and Trade, managers of select companies, and the Problem Loan Department of Komercni Banka, one of the largest commercial banks in CEE. The project concentrated on the areas of financial and operational restructuring, privatization, foreign investment, joint ventures, policies and procedures for strategic industries, and institutional strengthening. The team successfully restructured 12 of the largest and most important companies, doubling the expected benchmark of restructuring six companies.
Crimson parlayed its successful experience on this project into conducting a similar, intensive training program in privatization and restructuring for the Romanian Restructuring Agency.
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USAID Advisory Team to the Czech Ministries of Privatization, Industry and Trade and National Property Fund
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This team provided technical assistance, policy/legal advice, institutional assessments, and training for rapid market reform and independent, sustained capacity building to the Czech Government. The project accomplished dramatic changes in privatization policies, restructuring, foreign direct investment, environmental protection, remediation and indemnification, enabling legislation, training and institution building, and fairness and transparency.
Crimson’s privatization program in the Czech Republic is heralded as one of the most successful privatization programs anywhere. Crimson worked with 13 of the 20 largest employers in the country, 26 of the 50 largest companies, and all 16 regional electricity and natural gas distributors. The project catalyzed over 145 foreign investor privatization transactions, and contributed to the raising of over $5 billion in new foreign direct investment into Czech companies. In all, over 200 companies with assets over $10 billion successfully privatized.
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Uganda Support for Private Enterprise Expansion and Development (SPEED)
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SPEED provided technical assistance and training to increase the access of MSMEs to financing. Crimson took an active role in the assessment, design, and implementation of the program, and managed the Business Environment Component (legal, policy, and regulatory).
Crimson helped achieve significant improvements in the Land and Companies Registries (file archiving and establishing policies, procedures, and laws relating to company and land registries, including the complete rehabilitation of over 36,000 files). Crimson professionals upgraded the Center for Arbitration and Dispute Resolution (CADER), which has developed into a sustainable and profitable institution with a key role in reducing backlogs of court cases. Crimson also developed and completed extensive training of judges, lawyers and business people, and assisted successful efforts to amend the Leasing Law to allow for improved tax treatment permitting much more extensive use of leasing by MSMEs.
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