President of the United States George W. Bush announced today the creation of the Romanian American Foundation as a gift from the people of the United States to the people of Romania.
The Romanian American Foundation, with an endowment of approximately 150 million USD, will advance private sector economic development and conditions for democratic stability by support for non-profit institutions.
In its early years, the Foundation will concentrate its programs on education, job creation and entrepreneurship, targeting currently underserved geographic areas and groups of the population. The Foundation considers guarantees for student loans, scholarships, counseling, and internships, other projects supporting private sector development, including partnerships and exchanges with U.S. institutions and organizations.
The Foundation objective is to promote innovative approaches to education and training that will lead to socio-economic development, stimulate the private initiative, and create new jobs. At later stages, the Foundation may expand the focus to include community development and support for the non-profit sector in addressing critical social problems through social entrepreneurship. The Foundation will seek to support projects, ideas and organizations that are catalytic and can have broad impact, as well as creating potential for being successfully replicated, thus encouraging other financiers or partners to follow suit.
The Foundation is a successor organization of the Romanian-American Enterprise Fund (“RAEF”), which has invested successfully in Romanian small and medium businesses since 1994. Under the committed leadership of the Board of Directors and its management, RAEF has met the objectives laid out for it by the U.S. Congress in the SEED Act, registering outstanding results, high return on its investments and wide recognition of the professionalism of its team.
Over the years RAEF succeeded in leveraging its capital by attracting alongside as partners high caliber financial institutions such as European Bank for Reconstruction and Development, International Finance Corporation, DEG and FMO (the development banks of the German respectively Dutch governments), and Black Sea Trade and Development Bank.
RAEF pioneered in the Romanian market several successful undertakings such as the first micro loans program (that generated over 15,000 jobs during its existence), the first small loan program based on cash flow lending (which later became good practice in the banking sector), established the first non-bank institution to issue residential mortgages, developed the first consumer finance company, and launched the first innovative energy efficiency fund.
RAEF has also been one of the most successful organization realizing privatizations, as investor or consultant. The RAEF team has succeeded in raising EUR 110 million to launch a regional fund, the Balkan Accession Fund.