European Investment Bank Confindustria Italy Conference EIB Financial Instruments and Support to Investment Projects Belgrade, 15 April 2013 Andreas Beikos Head of Office European Investment Bank Western Balkans Representative Office in Belgrade Before starting, I would like to point out that the IFIs here present as well as the European Commission have a good track record of cooperation, not solely in the Western Balkans, but also in other regions of the world. In fact the IFIs are in many ways complementary to each other in terms of strategies and financial products and in many large ticket infrastructure projects IFIs tend to join forces to support projects through co-financing. This is certainly the case in the Western Balkans. 4/29/2019 European Investment Bank

European Investment Bank EIB Group: EIB : European Union’s financing institution Created by the Treaty of Rome in 1958 as the long-term lending bank of the EU Shareholders are the 27 Member States of the EU Policy driven Bank: raises funds on the capital markets which it lends on favourable terms to projects furthering EU policy objectives Operates on a non-profit maximising basis and lends at close to the cost of borrowing AAA rating EIF : EIB Group’s specialist vehicle for VC and SME guarantees Established in 1994 Shareholders are the EIB, European Union and commercial banks Acts as a “fund of funds” by acquiring holdings in venture capital funds (VCF) which take equity participations in SMEs Extends guarantees to the banking community to foster the provision of medium and long-term loans to SMEs 4/29/2019 European Investment Bank

European Investment Bank EIB Signatures 1958-2011 The outset of the financial crisis in 2008 meant a substantial increase in lending from EIB, rising to almost € 80 bn in 2009, € 72 bn in 2010 and going back to € 61 bn in 2011. 4/29/2019 European Investment Bank

Signatures and disbursements As a result of continuing financial and economic crisis in the EU, EIB is expected to increase its intermediation in the next 3 years with additional lending of € 20 bn per year on top of the usual € 50-60 bn annually. For this our Member State shareholders have approved recently a capital increase of € 10 bn. In addition, EIB Group, the World Bank Group and EBRD have initiated for the period 2013-2014 a new Joint Action Plan following the “Vienna Initiative” which aims at supporting economic recovery and growth in Central and South Eastern Europe. The Action Plan, which is a direct response to the continuing impact of Eurozone problems on the economies of emerging Europe, includes more than EUR 30 billion of joint commitments for the period 2013-2014. EIB is expected to contribute EUR 20 bn, WB 6.5 bn and EBRD EUR 4bn. 4 11/03/2013 European Investment Bank Group European Investment Bank Group 4

Lending (signatures) in 2012: EUR 52.2bn 10% of the total lending volume is earmarked for projects outside the EU, with pre-accession countries the largest beneficiaries. EIB has a global presence, with a balance sheet reaching about € 500 bn. (Of which EUR 671m in the Western Balkans) Pre-accession Countries include: Candidate Countries: Croatia, Iceland, the Former Yugoslav Republic of Macedonia, Montenegro, Serbia and Turkey. Potential Candidate Countries: Albania, Bosnia and Herzegovina, Kosovo. 5 11/03/2013 European Investment Bank Group European Investment Bank Group 5

European Investment Bank EIB Priority Objectives Outside the Union: Private sector development Infrastructure development Security of energy supply to EU Environmental sustainability (RE + EE) Western Balkans: EIB operates under the Pre-Accession EU Mandate (given by EC to EIB) and the Pre-Accession Facility (at EIB own risk) In line with IPA II funds for the period 2014-2020, EIB’s external Pre-Accession Mandate will be replenished accordingly. EIB is active in the Western Balkans since 1977. EIB is largest lender in Western Balkans and is committed and supports the Western Balkans’ closer integration with the EU. 4/29/2019 European Investment Bank

EIB group strategy in the Western Balkans Long term loans (public/private borrowers + SMEs) WBIF (Technical assistance and grant support) EDIF (Venture capital for SMEs) In this region, the Bank’s portfolio is mainly concentrated with the Public Sector and support to SMEs. Direct corporate risk is still difficult due to difficulty in enhancing credit worthiness to EIB credit policy standards. 11/03/2013 European Investment Bank Group

European Investment Bank Group Serbia: the main beneficiary of EIB loans in the Western Balkan Region circa EUR 4.0 bn   Signatures in 2009-2010 are now translating into higher levels of disbursement meaning that at last some of the projects are in the phase of implementation. Still there is a wide backlog of operations outstanding in Serbia of about EUR 1.6 bn. EUR M 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Total Approvals 66 267 198 215 239 290 220 150 1359 835 335 135 4309 Signatures 162 190 149 250 134 170 893 690 711 275 3957 Disbursements 57 65 85 136 148 98 169 317 576 539 2256 11/03/2013 European Investment Bank Group 8

European Investment Bank EIB Products In the Western Balkans, the EIB operates primarily through: Direct loans to projects generally with a cost above EUR 25 million Intermediated loans channeled through intermediary banks (credit lines to banks), whereby intermediaries are obliged to transfer the financial benefits from EIB resources to SMEs and municipalities - Currently, existing credit lines for SMEs and municipalities in the region amount to EUR 2 billion - Framework loans to central and local public authorities for projects of up to EUR 50 million - The EIB contributes to the European Fund for Southeast Europe (EFSE - www.efse.lu) that provides sustainable financing to micro and small enterprises and to the Green for Growth Fund South East Europe (for RE and EE - www.ggf.lu) Direct loans: large tickets mainly to public sector operators Intermediary loans: bilateral lines of credit with local international banks Framework loans: to public sector, examples are to support infrastructure for municipalities, research and development infrastructure, school modernisation, refurbishing of judicial buildings and clinical centres Largest exposure to transport sector, (Corridor X, Belgrade by pass, railways modernisation and landmark bridges (i.e. Gazela and Sava) 9 4/29/2019 European Investment Bank

SME financing: A key priority for the EIB SME financing has been reinforced as one of the priority objectives of the EIB Group since 2005 The role of the EIB Group is to facilitate access to finance for SMEs at better financial conditions: channel increased funding sources and intensifying our partnership with the banking sector provide and develop a wider range of products SMEs can find the list of EIB financial intermediaries in Western Balkans, including contact details, on EIB website. www.eib.org/about/news/the-intermediary-banks-and-financing-institutions-for-credit-lines.htm Contact details for SME bank intermediaries in all countries of operation are on our website. Roughly 30-40% of EIB portfolio is bank intermediated. 4/29/2019 European Investment Bank

Favorable interest rate loans European Investment Bank EIB Loan for SMEs EIB Loan For SMEs Financial Intermediary (lending to SMEs) Loans to SMEs can also include tranches for Small MidCaps (total project cost of up to € 25m) where 100% EIB financing is available and MidCaps (total project of between € 25m and € 50m) where 50% EIB financing is available. Favorable interest rate loans SME SME SME SME SME SME 4/29/2019 European Investment Bank

European Investment Bank Group WBIF Innovative blending instrument developed jointly by the EIB, European Commission, EBRD, CEB and other donors. Blends grants and loans for preparation and financing of priority projects in the framework of the EU Pre-Accession process. Since December 2009, 280 million Euros grants for 138 projects. EUR 7.7 bn of loans committed, of which EUR 2.3 bn signed. Of these, 27 projects were supported in Serbia, benefitting from EUR 34 million grants. In 2012, 31 projects approved, providing EUR 59 m grants (EUR 27 m from the Commission. EUR 1.4 bn of loans were committed. In 2012 in Serbia 3 projects were approved for 3.2 million. The Western Balkans Investment Framework (WBIF) is an innovative blending instrument developed jointly by the EIB with the European Commission, the EBRD, the CEB and other multilateral and bilateral institutions as well as EU Member States and Norway It blends available grants and loans from its stakeholders to support priority projects for the region facilitating the preparation and the financing of priority projects in the framework of the EU Pre-Accession process. Since December 2009, it approved grants for 280 million Euros, for 138 projects, for which EUR 7.7 bn of loans have been committed by IFIs, of which EUR 2.3 bn were signed. Today there are 40 on-going WBIF grants under implementation for EIB projects in the Western Balkans region. In 2012, the WBIF approved 31 projects for which EUR 59 m grants, were committed, of which EUR 27 m from the Commission, EUR 25 m from donors to the European Western Balkans Joint Fund, and EUR 6.6 m from EBRD and CEB. WBIF grants were blended with some EUR 1.4 bn of loans from the Partner IFIs and KfW. 11/03/2013 European Investment Bank Group

Western Balkans Enterprise Development & Innovation Facility (EDIF) Joint initiative of EC, EIF and EBRD within the context of Western Balkans Investment Framework WB Beneficiaries, IFIs and Donors are also participating An initial EUR 142m to utilise innovative financial instruments for SME Access to Finance Facility Pillars Two Equity funds to pursue equity investments in innovative and high growth SMEs A Guarantee Facility to guarantee SME loans Technical Assistance component for regulatory reforms aiming at SME access to finance The Western Balkan Enterprise Development and Innovation Facility (EDIF) launched on December 2012: new complementary measure for improving access to finance for SMEs and helping economic development in the region. This platform is coordinated by the EIF, the EIB’s arm specialised in supporting Europe’s micro, small and medium sized businesses (SMEs), was created with the aim to promote the emergence and growth of innovative and high-potential SMEs, to foster the development of a regional Venture Capital market. The initial Capital is EUR 142 m, coming from the EU, IFIs, beneficiaries and bilateral donors. This amount will effectively translate into over EUR 300 m of direct financing for high-growth and innovative SMEs in the region. The EDIF will complete the supporting activity of the EIB in the WB (lending with traditional loans, assistance with WBIF and private equity and venture capital with EDIF) and thus support the development of the WB’s economic base. 11/03/2013 European Investment Bank Group

European Investment Bank Group Perspectives 2013 Serbia New APEX Loan for SMEs operation through RoS (EUR 500m requested) Road rehabilitation and safety (EUR 100m) (EIB/EBRD/WB co-financing) SMEs (Crédit Agricole EUR 50 m) FYROM SMEs (Macedonian Bank for Development Promotion – amount tbc). BiH Motorways (Banja Luka-Doboj EUR 100m) (EIB/EBRD co-financed) SMEs (EUR 60m) Electricity Distribution (EUR 60 m). Montenegro SMEs (SocGen EUR 20 m) Road rehabilitation and By-passes (EUR 30m). Albania Vlore By Pass (EUR 18m). (EIB/EBRD/IPA co-financed) Most other infrastructure projects have been pushed back to 2014/15 due to the Government budgetary restructuring in 2013. 11/03/2013 European Investment Bank Group 14

Operations signed since 2001(excluding financial institutions) Name of project Date signed Amount in EUR M Urgent Transport Rehabilitation Dec-01 66 Railways Rehabilitation Mar-02 85 Road Rehabilitation Jul-02 95 Power Sector Reconstruction Nov-02 67 Belgrade Urban Renewal Jun-03 90 Emergency Health Oct-03 50 EPS – Power System Control 22 European Roads Project – B May-04 120 Municipal Water Jun-04 25 Schools upgrading May-05 Air Traffic Control Jun-05 34 Clinical Centres Dec-06 80 Railways Rehabilitation II – A Roads and Bridges Rehabilitation B2 Jul-07 33 Gazela Bridge Rehabilitation Belgrade by-pass Oct-07 60 European Fund for South East Europe Nov-07 7.7 Municipal and Regional Infrastructure Dec-08 Clinical Centers / B 70 EMS Network Upgrading Jun-09 24.5 Municipal Infrastructure B Corridor X E 75 Motorway Oct-09 314 Belgrade City Sava Bridge Dec-09 Public Sector R&D Mar-10 200 School Modernisation Programme Jun-10 Belgrade bypass B Sept-10 40 Corridor X (E-80) Motorway Phase I Nov-10 265 EPS Electronic Meters Belgrade City Sava Bridge /B Fiat Small Cars Serbia May-11 500 Upgrading Judiciary Buildings Oct-11 15 FIAT key project where bank has lended EUR 500 m; this investment is having considerable macro-economic impact and value-added investments on automotive suppliers which have invested in Serbia recently. And part of our € 250 m APEX loan through the Republic of Serbia also supported many of the investments linked to the FIAT investment. 4/29/2019 European Investment Bank

THANK YOU Andréas Beikos Head of Representative Office for the Western Balkans European Investment Bank E-mail: a.beikos@eib.org Tel: +381 11 312 1756 Contact details for larger size projects and for EIF products. 16 4/29/2019 European Investment Bank