FINAL REPORT - USAID Macedonia

within, and outside of Macedonia. Equity investments can be an effective way to help companies grow faster
with less debt burden, while benefitting from the transfer of management know-how.
In addition to improving companies’ understanding of equity financing through promotional activities, MCP
engaged Euro-Phoenix, a regional equity financing consulting company to help Macedonian companies find
strategic partners. Euro-Phoenix consultants made multiple trips to Macedonia, met with more than 40
companies and hired a local representative to take advantage of opportunities. In 2011, Euro-Phoenix received
its first two mandates: to perform valuation for a meat processing company and to raise three million Euros in
equity for an IT company. After several months, both companies chose not to proceed with the capital raising
exercise.
Euro-Phoenix’s effort revealed a real challenge that inhibits both equity and debt financing. While working on
these mandates, Euro-Phoenix faced issues in the quality and accessibility of information needed to perform the
tasks. Most companies in Macedonia have poor financial management accounting which is often inaccurate,
does not reflect the real situation which make it hard to value a company.
Real Estate Valuation
In line with discussions with USAID, MCP designed an initiative to support the adoption and implementation of
international real estate valuation practices, key to the functioning of a market economy, and essential to
accessing finance, accurate accounting, equity transactions, taxes, and a vibrant real estate market. On August
31, 2010 the Government of Macedonia passed a new law on valuations tasking each of the nine ministries
included in the law to develop a methodology for valuations of assets that fall under their competency and
scope. Apart from the development of the methodologies, the implementation of the law required intense work
and coordination with the ministries to organize trainings and exams for the newly certified appraisers, establish
e-registries of appraisers, translate international valuation standards, etc.
In the spring of 2011, the Ministry of Information Society and Administration (MISA) approached the MCP
team asking for assistance in developing the Methodology on Valuation of IT Assets. An MoU was signed with
MISA on June 13, 2011, and MISA and MCP representatives established a working group to draft a
methodology on IT valuations. A public debate took place on September 14, 2011 with relevant stakeholders
giving their comments on the draft methodology. The finalized methodology was sent to the Minister of MISA
for signing in October 2011.
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