Instanton effects in N=1 brane models and the Kahler metric of twisted matter

We consider locally consistent systems of magnetized D9 branes on an orbifolded six-torus which support N=1 gauge theories. In such realizations, the matter multiplets arise from "twisted" strings connecting different stacks of branes. The introduction of Euclidean 5 branes (E5) wrapped on the six-dimensional compact space leads to instanton effects. For instance, if the system is engineered so as to yield SQCD, a single E5 brane may account for the ADS/TVY superpotential. We discuss the subtle interplay that exists between the annuli diagrams with an E5 boundary and the holomorphicity properties of the effective low-energy action of the N=1 theory. The consistency of this picture allows to obtain information on the Kahler metric of the chiral matter multiplets arising from twisted strings.