Foreign Assistance: U.S. Russia Fund Is Following Its Investment Selection Process and Criteria
GENERAL ACCOUNTING OFFICE WASHINGTON DC
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The United States established enterprise funds to support private sector development in selected countries of Central and Eastern Europe and the former Soviet Union as they transition from centrally planned to market-oriented economies. Currently, 10 funds cover 19 countries in these regions with authorized funding of about 1.3 billion. Enterprise funds are private, nonprofit U.S. corporations that are supposed to make loans to, or investments in, small-, medium-, and large-sized businesses in which other financial institutions are reluctant to invest. In 1995, the United States established the U.S. Russia Investment Fund by merging two earlier Russian funds-the Russian-American Enterprise Fund and the Fund for Large Enterprises in Russia. The Fund is authorized to receive 440 million through the U.S. Agency for International Development USAID. Although USAID has primary responsibility for monitoring the Funds operations, it does not have a direct role in the Funds investment review and selection process. As of March 2000, the Fund had invested 114.4 million in 30 projects through its direct investment program which provides loans and equity capital to businesses in Russia.
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