UPDATE 1-IFC backs Kyrgyzstan's first institutional private equity fund

* Highland Capital closes first round of fundraising

* Has $15 mln, aims to double by Aug. 2019

* IFC’s Colbert hopes to spur creation of local market (Adds detail about fund, quotes, background)

LONDON, Sept 11 (Reuters) - Bishkek-based Highland Capital has won backing from the World Bank’s International Finance Corporation for its debut fund, the first institutional private equity fund to focus on Kyrgyzstan.

The fund would look to help expand access to finance for small and medium-sized enterprises in the country, providing equity and equity-like financing to businesses in areas including services, healthcare, education and media, Highland said.

Kyrgyzstan’s economy depends heavily on remittances from migrant labourers, most of whom work in Russia, with which the Bishkek government maintains close economic and political ties.

The mountainous nation of 6 million has attracted little foreign investment since becoming independent in 1991 outside of its gold mining sector which is dominated by a joint venture controlled by Canada’s Centerra Gold.

Highland raised an initial $15 million for its Highland Private Equity & Mezzanine Fund, of which $8 million came from the IFC, the largest development institution focused on the private sector in emerging markets, it said.

Highland said it would seek to raise a total of $30 million and expects to have closed fundraising by August 2019. IFC Country Officer Martin Naegele told Reuters he expected several institutional investors to take part.

Among other early investors in the fund were Gregory Serrurier, chief investment officer at U.S. investment firm Redwood Grove Capital and previously of Dodge & Cox, as well as local businessman Emil Umetaliev, Highland said.

The fund would make investments ranging in size from $800,000 to $5 million, Highland added.

“IFC’s investment is part of our broader efforts to foster investments in SMEs while spurring the creation of a local private equity market,” said Cassandra Colbert, IFC Regional Manager for Central Asia.

“By supporting the country’s first local private equity fund, we hope to send a strong signal to other investors thinking of entering the Kyrgyz private equity market.”

Highland is run by Cholpon Jumashukurov, previously an analyst at Farallon Capital, and Eldan Usubakunov, who has previously worked in corporate finance at East Star Capital.

“Our investment approach fits the local market very well as it addresses the huge deficit of risk capital,” Jumashukurov said.

“We see a large number of compelling investment opportunities and we favour investments where our team can add significant value beyond capital provision,” he added, including improving management systems and corporate governance. (Additional reporting by Olzhas Auyezov in Almaty; editing by Maiya Keidan and Kirsten Donovan)