The European Union will set up a private equity fund in Armenia, Head of Cooperation Section at the EU Delegation to Armenia, Mr Hoa-Binh Adjemian, told reporters Friday.

The EU is providing 15 mln euro, the European Bank for Reconstruction and Development (EBRD) adding another five. Yet another 5 mln are to be sourced from elsewhere, which the EU delegation hopes to complete before the summer of 2017.

“I think by then we’ll have secured that extra funding and will start to look for targets for investment,” he said.

The long-term vision is to increase the fund’s capital to €50 mln.

The fund will make equity investment into companies which need access to finance, but for some reason cannot get it otherwise – because they have limited collateral, have too high leverage, or for other reasons.

“Our goal is to make those companies grow and generate more exports and employment,” Adjemian said.

In 5 years, the management of the fund will expect partner businesses to buy out the investment and sell that stock to someone else. This will generate a revolving fund, from which following equity investment will be made.

At the current stage, the fund is expected to operate for 10 to 12 years.