The European Investment Bank (EIB) has announced today the signature of three separate loan contracts for a total amount of EUR 110 million aimed at boosting the economy of Bosnia and Herzegovina and supporting the country’s economic recovery efforts.
- EUR 50 million via Intesa Sanpaolo Banka for small and medium sized enterprises (SMEs) and priority projects
- EUR 50 million via IRBRS-Republic of Srpska Investment-Development Bank for SMEs and local infrastructure projects
- EUR 10 million via LOK Microfinance for small and micro-enterprises, including start-ups
These three operations constitute a major contribution to the development of projects in those economic sectors not adequately supported by financial services and also to making funds available to a vast platform of small and micro-sized enterprises to the benefit of an important section of the local economy.
The first two loans were signed on the occasion of the official visit to Bosnia and Herzegovina of Dario Scannapieco, the EIB Vice-President responsible for operations in Italy, Malta and the Western Balkans, while the loan to a microfinance foundation had already been signed in October. Mr Scannapieco met with Bosnia and Herzegovina’s Minister of Finance and Treasury, Dragan Vrankic and Mr Vjekoslav Bevanda, Minister of Finance of the BiH Federation.
"We are very proud to be able to support the economic recovery of the country, both through traditional operations in favour of local SMEs and innovative loans such as the one in favour of microcredit " said Dario Scannapieco, EIB Vice-President responsible for operations in Italy, Malta and the Western Balkans. "The EIB is already the leading international financial institution in Bosnia and Herzegovina and the Western Balkans region. The willingness shown today by the authorities will allow a further strengthening of this role, with the aim of helping the country along its path towards the European Union.”
The main features of the new operations can be summarised as follows:
Intesa Sanpaolo Banka
A EUR 50 million loan for the financing of small and medium-scale projects promoted by SMEs or local authorities in the fields of the knowledge economy, energy and environmental protection throughout the country. A minimum of 70% of the loan will be allocated to SME projects.
EIB financing could cover up to 100% of the total cost of the investment for SME projects with a ceiling of EUR 12.5 million per project, whereas all other projects will be co-financed up to 50% in partnership with Intesa Sanpaolo Banka (subsidiary of the Italian banking group Intesa Sanpaolo). The Minister of Finance and Treasury Dragan Vrankic attended the signing ceremony.
IRBRS –Development Bank Republika Srpska
A EUR 50 million loan with a similar structure to the above-mentioned one. IRBRS manages a number of public funds on behalf of the Government of Republika Srpska with the purpose of supporting the development of the economy of its territory. At the request of the Government of Bosnia and Herzegovina and Republika Srpska, the EIB loan would provide much needed additional funds for lending to the SME sector as well as to public projects, especially in poor areas.
LOK Microfinance
This is an innovative facility of EUR 10 million in favour of projects undertaken by small and very small businesses in the sectors of agriculture, trade, manufacturing and services. The facility aims at supporting economic development, contributing towards job creation and poverty alleviation and supporting entrepreneurship development.
Microcredit Foundation LOK is a non-depository financial organisation whose core business activity is the provision of micro-loans in accordance with the Law on Microcredit Organisations in order to improve the material status of the microloan users.
EIB and Bosnia and Herzegovina
The European Investment Bank (EIB), the long-term financing institution of the European Union, supports viable capital investment projects furthering the policy objectives of the Union.
In the countries of the Western Balkans, the financing operations of the EIB contribute to facilitating the integration process with the European Union.
Total EIB financing in Bosnia and Herzegovina over the period 2001-2009 amounts to EUR 1.023 million. The EIB’s activity in the country so far has concentrated on financing projects in the transport, energy and environment sectors and projects undertaken by SMEs.