KfW activities in Bosnia and Herzegovina Donor Coordination Forum Sarajevo, March 2012 Stephan Leudesdorff; Director KfW office Bosnia and Herzegovina

2 KfW Bankengruppe Financing with a Public Mission o Promotional Bank of the Federal Republic of Germany o Founded 1948 as Kreditanstalt für Wiederaufbau o Shareholders: 80% Federal Republic, 20% Federal States o Headquarters: Frankfurt am Main, Branches: Berlin and Bonn o Representative offices: about 60 offices and representatives worldwide o Balance sheet total at end 2010: EUR 442 billion o 4,530 employees (2010) o Rating: AAA/Aaa/AAA

3 A Bank with a wide array of functions

4 Focal areas in Bosnia and Herzegovina IFinancial Sector ● Strengthening of the trust in the reliability of financial markets ● Provide medium to long-term funding for micro, small and medium sized enterprises in urban and rural areas ● Support to the market consolidation of the micro finance sector ● Promotion of energy efficiency IIEnergy Sector ● Promotion of renewable energy ● Promotion of energy efficiency IIIMunicipal infrastructure ● Sustainable solutions for water supply problems ● Advancements in the field of waste water collection and treatment

5 Financing sources for Bosnia and Herzegovina IContributions of the German Funds for Financial Cooperation (ODA): ● Bilateral contributions of the German Government (grants, soft loans) ● International funds of the German Government ● KfW´s own funds IIAdditional sources of financing: ● European Commission (IPA funds) ● Other donors (e.g. Swiss Government, Danish Government) ● Funds of the Bosnian Government

6 KfW development bank in Bosnia and Herzegovina Commitment of funds in the sectors *Loans signed only; third party funds not included **For the financial sector only active loans included

Financial Sector I Objectives: ● Strengthening of the intermediaries for the promotion of economic development in Bosnia and Herzegovina II Funds: ● Guarantees and credit lines for local commercial banks and microfinance institutions ● Providing TA to the partner institutions

Overview of KfW‘s contribution to the financial sector in Bosnia and Herzegovina IEFBH (European Fund for Bosnia and Herzegovina) ● Virtual fund funded by various sources (e.g. Danish Government, BiH Government) Mother of all refinancing funds in Balkan ● Contributed amount: €19 million IICredit Guarantee Fund (CGF) ● Guarantee liabilities amounting to € 5.2 million III Energy efficiency credit line ● Contributed amount: €12 million

Energy Sector I Objective: ● Rehabilitation & construction of power generation facilities with the objective of ensuring reliable, affordable and sustainable energy supply II Funds: ● Development loans for wind parks & HPPs ● Grant funds for the preparation of studies for the construction of new generation facilities ● TA

KfW’s energy projects in Bosnia and Herzegovina IRehabilitation of Hydro Power Plants (HPP) ● HPP Trebinje (3x57 MW), phase 1 (€2 m) ● HPP Trebinje (3x57 MW), phase 2 (€5 m) ● HPP Rama (2x80 MW) (€17 m) IINew Hydro Power Plants ● Run-of-river HPP Cijevna III (13 MW) on river Bosna (€ 50 m loan plus € 5 m IPA funds) ● Pump storage power Plant Vrilo under preparation ( 64 MW) (up to € 100 m loan) ● Run-of river HPP Janjici (app. 12 MW) on river Bosnia; FS under preparation (up to € 50 m loan) III Energy Efficiency ● Distribution SCADA system (€17 m)

KfW’s energy projects in Bosnia and Herzegovina IVWind parks ● Establishment of first wind atlas for BiH in 2009 ● Wind park Mesihovina (close to Tomislavgrad) (44 MW), € 71 m loan, € 1m grant (TA) ● Under preparation: Wind park south part of RS, up to € 50 Mio loan

Municipal infrastructure: Water & wastewater I Objectives: ● Enabling financially and ecologically sustainable supply of potable water as well as wastewater collection and treatment ● Improving living standard of citizens ● Protecting natural resources II Funds: ● Development loans and grants for the municipalities ● Support in the area of structural changes (accomp. measures) ● Grants for the development of feasibility studies ● Harmonization of the activities with local and external donor agencies  Joint preparations and co-financing projects with EC and other donors, in particular Swiss and Austrian Government

KfW’s water projects in Bosnia and Herzegovina I. Kakanj ● Rehabilitation of urban water supply, € 4.3 m; project completed II. Program „Rehabilitation of Urban Water Supply and Sewerage Systems BiH I) ● Participating municipalities: Kakanj, Bihac, Derventa and Kostajnica; € 14 m; project completed III. Bihac ● Waste water treatment plant, € 17.5 m IV. Banja Luka ● Urban water supply and sewage systems; € 14m plus € 4.5 m EU contribution V. Program „Rehabilitation of Urban Water Supply and Sewerage Systems BiH II“ ● Under preparation; participating municipalities: Tuzla, Zenica, Travnik; up to € 19.5 m plus a contribution from the Swiss government

Thank you for your attention! Stephan Leudesdorff Director KfW Office in Bosnia and Herzegovina Phone: Mailto: