European Investment Fund

1. European Investment Fund Riga, 24November 2010 Presentation to the SF Monitoring Committee 1

2. Agenda • Holding fund overview • Equity • Current status • Forecasts • Funded Risk Sharing • Current status • Review/changes • Forecasts 2

3. Current status/structure of Holding Fund Holding Fund (EUR 91.5m) Equity-related instruments Debt-related instrument Risk Capital Fund Seed & Start up Fund Funded Risk Sharing Product Swedbank EUR 22m SEB EUR 30m Baltcap EUR 20m Imprimatur EUR 14.7m Financially Engineered Instrument Selected Financial Intermediaries Signature Status = > March 26th March 26thJune 11thJanuary 22nd SMEs End Beneficiaries SME Community 3

4. Holding fund progress by stage 4

5. Holding fund progress by amounts 5 +69.3%

6. Initial forecast made by selected managers vs actuals for equity transactions, mEUR 6

7. Investment examples • BaltCap invested EUR 1.4m in Primekss, that has unique, patented technology for casting slender, tough, jointless concrete floors for heavy use. The very flat floors improve the operating efficiency of large automated warehouses and other commercial and industrial premises. In addition to the considerable advantages for end users, the technology saves up to 50% of CO2 emissions during construction, if compared to traditional concrete slab construction. The new PrimeComposite technology has already been widely adapted by leading customers across Scandinavia and Baltics. • Imprimatur invested EUR 100k in Naco Technologies, a start-up technology business commercialising innovative nano-coating technology developed at a leading research institute in Moscow, Russia. The patented innovation enables nano-coatings on a variety of target materials, with coatings that are harder and thinner than existing technologies and with a shorter coating process. This will result in reduced friction fatigue in equipment used in global industry sectors such as machinery and engineering, aerospace, oil and gas. v Naco_tech 7

8. Updated forecast for equity transactions made by fund managers mEUR 8

9. Bank’s initial forecast vs actuals for FRS transactions, mEUR 9

10. Funded Risk Sharing review&changes • Detailed review in September (6 months from start) • Slow progress of lending worse than initially assessed, thus instrument with current restrictions expected to reach only ~10% utilization • Full review of transactions through senior level discussion with banks and PSC meeting • Banks requested relaxation of restrictions: • discussed with EIF specialists • financial impact analyzed and modelled • changes in principle agreed with Project Steering Committee in October 10

11. Funded Risk Sharing review&changes, con’t. • Terms that were not part of initial call, changes enacted already: • enabling higher risk classes • removal of other risk related constraints • Terms that were included in initial call, like increase in max loan amount and maturity, DG Regio agreement on changes procedure required, formal letter submitted in November • Changes will be possible to effect only after DG Regio reply, required asap • Updated FRS forecasts based on DG Regio positive response no later than December 2010… 11

12. Bank’s updated forecasts for FRS transactions, mEUR 12

13. Summary • All transactions signed and live, financing through all instruments available to SMEs • Latvian SMEs beginning to benefit from equity investment and debt instruments • Equity instruments delivering largely as expected • Funded Risk Sharing in process of improvement in order to match the required utilization – DG Regio support critical! • More than EUR 110m expected to be disbursed to SMEs by end of 2012 • Note: 3rd Equity Instrument in process of being finalised for possible launch in December 13

14. Support slide - Risk Capital Fund JHF EUR 20 m allocated Private Investment EUR 10 m Risk Capital Fund (Limited partnership) • Upside Incentivisation • No Downside protection • Professional Management SME SME SME SME SME SME SME Focus on high growth sectors 14

15. Support slide - Seed & Start-up Fund EUR 3m allocated JHF EUR 11.7m allocated Private Investment EUR 5.7 m Risk Capital Fund (Limited partnership) Seed Fund (Limited Partnership) • Upside Incentivisation • No Downside protection • Single Professional Management SME SME SME SME SME SME SME University Spin out focus 40-50 projects Innovative Technologies focus 14-16 SMEs 15

16. Support slide - Funded Risk Sharing Product (FRSP) EUR 52 m allocated JHF 1. Deposit to Bank(s) JEREMIE Resources EUR 52 m Combined with Bank’s own resources EUR 52 + 52 = 104 m Deposit acts as 50% co-financing 2. Loans to SMEs SME SME SME SME SME SME SME 70% focus on Manufacturing sector 16

17. Support slide – 3rd Equity Instrument EUR 1m-5m JHF EUR 5m-10m Private Co-investments 50/50 basis Co-Investment Fund De minimis Fund • Upside Incentivisation • Single Professional Management SME SME SME SME SME SME SME Generalist focus 15-30 projects (up to EUR 200k) Generalist focus 12-16 SMEs (sweet spot 200k-1m) 17

18. Contact details • European Investment Fund in Luxembourg 96, Blvd Konrad Adenauer, L-2968 Graham Cope, g.cope@eif.org Tel: + 352 42 66 88 236 Martins Jansons,m.jansons@eif.orgTel + 352 42 66 88 381 • European Investment Fund in Latvia Valdemara Centre, Kr. Valdemara 21, 6th Floor,LV-1010 Krisjanis Zarins, k.zarins@eif.org Tel: + 371 670 352 31 18