A new production financing fund for Central and Eastern Europe has been established with the aim of raising $40m towards developing the region's film-making activities.

Bianca Bezdek, an international media attorney with Linklaters in New York, and Andrew Stear, head of Bucharest-based Stray Dogs Productions, have teamed to raise capital from investors for the fund, called Silver Bullet. With Stear as the main investor, Silver Bullet claims to have already raised $10 million.

However, Bezdek says she will have trouble capping the fund without further changes to the Czech tax system. She is lobbying Prague officials for amendments that would attract more film investment to the region, along the lines of the Canadian and Australian incentive schemes.

"The film fund would be modelled on the mutual-fund concept to invest in motion picture development and production," said Bezdek.

Recent Hollywood productions shot in Prague such as this year's Blade 2 and From Hell have highlighted the Czech capital as an emerging film location, but industry insiders here are worried that financial savings maybe a one-trick pony unless the system is improved.

Bezdek says her aim is to help transform Central Europe from "solely a below-the-line production service provider to a creative haven where literary properties are developed and deals are struck."

The arrival of more feature films would generate positive press for the Czech Republic at a time when the country's reputation is suffering due to media investor Ron Lauder's dispute with the country's largest TV station, TV Nova. "The country must be well aware that it desperately needs to repair its international image in order to recover the faith of foreign investors. This platform is just what the country needs," says Bezdek.