The European Bank for Reconstruction and Development (EBRD) is investing EUR6m (US$7.7m) through a capital increase in the leading Macedonian wine producer Tikves.

The investment is being made in a bid to further enhance the company's operations through improvements in the quality and selection of wines and to boost its competitive position, the EBRD said.

The investment will also increase competition within the wine sector throughout the whole Western Balkans region, it added.

The funding will provide the company with a financial basis for future growth by funding further modernisation investments, while building on Tikves' existing brand-name and its distribution network in the country and the whole region.

The capital increase, as well as the appointment of EBRD senior banker Vedrana Jelusic-Kasic to the supervisory board of Tikves, was approved by the company's shareholders' meeting on 31 October.

"The EBRD is attracted to Tikves by its strong market position on the domestic market and in the neighbouring countries" said Elena Urumovska, head of EBRD's resident office in Skopje. "This is a particularly important project for the EBRD as it not only supports a successful privately owned Macedonian winery, but it also increases competition in the wine sector in the region which is famous for its vineyards."

"EBRD's decision to invest in Tikves is recognition of the process of modernisation and business restructuring, which were our key focus areas in the past four years. At the same time, EBRD's support will help the company to continue its development and to expand from a regional leader into a global market player" added Svetozar Janevski, president of Tikves management board.

The EUR6m equity investment is being arranged under the EBRD-Italy Western Balkans Local Enterprise Facility.