PORTS in the REPUBLIC of SERBIA The Potential for Investments Port Governance Agency February 2016

Port Governance Agency Republic of Serbia - facts Capital city: Belgrade, population more than 1,600,000 Geographic location: Southeastern and Central Europe, Balkan Peninsula, Western Balkans Area: 88,509 km 2 Climate: moderate continental Longest river: Danube, Serbian section, 588 km Population: millions Official language: Serbian Religion: 85% Eastern Orthodox Christian, 5.5% Roman Catholic Christian, 3.2% Muslim, 6,3 % other. Time zone: central European, CET (GMT + 1 hour) Water from public mains: Safe to drink GDP: $42.65 billion Official currency: the dinar (RSD)

Port Governance Agency Waterway resources in the Republic of Serbia Of the 36,000 km of water networks in Europe, 1,680 km of internal waterways belong to the Republic of Serbia.

Port Governance Agency International rivers in the RS The Tisa river E km-granted the status of an international waterway The Danube river E bis km-international waterway with free navigation for all flags. The Sava River E km- international waterway with free navigation for all flags. The geographical position of the RS provides natural advantages for the intensive waterborne transport thanks to rivers Danube, Sava and Tisa

Port Governance Agency Cargo ports in the Republic of Serbia

Port Governance Agency Cargo ports in the Republic of Serbia Following locations are recognized as the existing or potential ports: Apatin, Bogojevo, Backa Palanka, Beočin, Novi Sad, Belgrade, Pančevo, Smederevo, and Prahovo on the Danube River and Senta on the Tisa River.

1.Port of BELGRADE, greenfield investment 2.Port of NOVI SAD, brownfield investment 3. Port of PRAHOVO, brownfield investment Port Governance Agency Proposals for investment Proposal for investment

1 2 3 Port Governance Agency Proposals for investment Proposal for investment

Greenfield investment Zemun - Borča location Port Governance Agency New Port of Belgrade

Port Governance Agency Proposals for investment Port of Belgrade New Port of Belgrade The proposed New Port of Belgrade would allow multimodal traffic and would help concentrate the cargo handling activity and enable the development of wider back-of- port areas.

Greenfield investment Zemun - Borča Port Governance Agency Proposals for investment Port of Belgrade Location in a vicinity of the new bridge Mihajlo Pupin offers affordable and competitive transport and financial-economic conditions for the construction of the port direct connection with the most important regional road traffic arteries (highways E-75 and E-70), as well as direct access to the Pancevo road; industrial railway which connects PKB with regional railway Belgrade-Pancevo is located on less than 3 kilometers from this location; vicinity to the airport "Nikola Tesla“; existing location includes 600 hectares of state owned land, of which 300 hectares can be planned for construction of five inland port terminals (container, ro-ro, liquid cargo, bulk cargo, Hucke-Pack), while the remaining 300 hectares can be used for construction of the Free Zone Belgrade; Proposal for investment

Port Governance Agency Proposals for investment Port of Belgrade Proposal for investment New Port of Belgrade The port is planned to have capacity of 170,000 TEU, 2.3 million tonnes of bulk cargo and 380,000 tonnes of liquid cargo (Phase I). And capacity to 400,000 TEU, 4 million tonnes of bulk cargo and 750,000 tonnes of liquid cargo (Phase II) The project would require capital expenditure of: EUR 227 million in Phase I EUR 256 million in Phase II The Government of Serbia would invest 600 ha of land

2 Port Governance Agency Proposals for investment Port of Novi Sad Proposal for investment Port of Novi Sad

Brownfield investment - Option 1 location of extended Port zone Port Governance Agency Proposals for investment Port of Novi Sad Proposal for investment Port of Novi Sad

Advantages of locations during the constructing of terminal: Buying companies in stage of bankruptcy. Space for container terminal has an area of ​​about 5 ha. The space is not in use and can be quickly bring in function. Using the benefits Free Zone regime Novi Sad (8 ha). Immediate vicinity of the international highway of the road E-75. Easily established rail link with the main rail routes. The possibility of expanding in the function of the Free Zone. It is possible use of infrastructure capacity and hydraulic structures of Port of Novi Sad a.d. Brownfield investment - Option 1 location of extended Port zone Port Governance Agency Proposals for investment Port of Novi Sad

BUYING COMPANIE IN BANKRUPTCY REGISTERING PORT OPERATORS IN PORT GOVERNANCE AGENCY REGISTER DETERMINATION OF THE PORT AREA BY THE GOVERNMENT OF RS PUBLIC INVITATION FOR ISSUANCE OF LICENCE FOR PORT OPERATOR PHASES IN PROJECTS Port Governance Agency Proposals for investment Port of Novi Sad

Brownfield investment - Option 2 location of Port zone Port Governance Agency Proposals for investment Port of Novi Sad Proposal for investment Port of Novi Sad

Advantages of locations during the constructing of terminal: The space is not in use and can be quickly bring to function. Using the benefits of Free Zone regime Novi Sad (8 ha). Immediate vicinity of the international highway of the road E-75. Easily established rail link with the main rail routes. The possibility of expanding in the function of the Free Zone. It is possible use of infrastructure capacity and hydraulic structures of Port Novi Sad a.d. Brown Field investment - Option 2 location of Port zone Port Governance Agency Proposals for investment Port of Novi Sad Proposal for investment Port of Novi Sad

3 Port Governance Agency Proposals for investment Port of Prahovo Proposal for investment Port of Prahovo

Brown Field investment location of Port of Prahovo Port Governance Agency Proposals for investment Port of Prahovo Proposal for investment

Advantages of location Port of Prahovo during the constructing of terminal : Port of Prahovo and port operator are 100% owned by the Republic of Serbia The possibility of rapid introduction of new operators in the port area of ​​ Port of Prahovo The possibility of expanding primarily by adjusting the unused. Industrial railway track length of 971 m is associated with the national railway network Limitations of location : Investments in bringing new purpose unused space winter storage arrangement and construction of bank stabilization. Brownfield investment location of Port of Prahovo Port Governance Agency Proposals for investment Port of Prahovo Proposal for investment

Port Governance Agency Proposals for investment Port of Prahovo PHASES IN PROJECTS DETERMINATION OF PORT AREA BY THE GOVERNMENT OF RS NEGOTIATING WITH A POTENTIAL INVESTOR PUBLIC INVITATION FOR ISSUANCE OF LICENCE FOR PORT OPERATOR Port of Prahovo REGISTERING PORT OPERATOR IN PORT GOVERNANCE AGENCY REGISTER

In the Republic of Serbia, under the laws, there are two possibilities for investment in port and port activities, including: 1)Based on the approval for the performance of port activities, which is a contractual model of public-private partnerships Interested port operators submit to Port Governance Agency following documents: - Letter of intention - Plan of activities for the approved project time; - Financial Feasibility Study for the project. Approval may be granted a maximum for a period of 25 years. Deadline validity of the approval given depends on the type of port activities for which authorization is requested as well as investments in infrastructure and / or superstructure facilities that port operator intends to build. Port Governance Agency Performing project trough Public-Private partnership

2) On the basis of obtaining a port concession Threshold for awarding the port concessions shall be the value of public works for construction and use of the port, or the value of port services, in an amount exceeding of million euros. Port concession may be: - service concession with the right to exploit a specific service, when the concession is granted for port services; - concessions for public works, when the concession is given for the construction of port structures and facilities. Port Governance Agency Performing project trough Public-Private partnership

The period for which will be given to the port concession depends on the type of concession, but no longer : 1) service concessions, when the concession is granted for port services: a) for nautical services to 5 years, b) for transport services up to 15 years. 2) concessions for public works, when the concession is given for the construction of port structures and facilities, according to public-private partnerships with the elements of the concession - up to 30 years. Port Governance Agency Performing project trough Public-Private partnership Performing project trough Public-Private partnership

The Republic of Serbia offers a number of possibilities that makes it interesting for investors : Financial incentives for investors Favorable tax system with the corporate lowest tax among the lowest rate in Europe by 15% Duty-free exports to the countries of South Eastern Europe, Russia, Belarus, Kazakhstan Exemption from payment of corporate income tax for investments of more than 7 million or if it employs at least 100 new workers. Educated workforce that is available at competitive prices The tax credit amounting to 80% of the committed investment Exemption from customs duty on import of equipment and materials under certain conditions Loans and facilities for greenfield investments Port Governance Agency What Serbia offers to investors?

Financial incentives are most reflected in the program of the Government of the Republic of Serbia on the award of grants The amount of funds that can be allocated to large enterprises is determined up to 50% of eligible costs for implementation of the investment project The amount of funds allocated for investments over EUR 50 million can not be greater than 25% of the eligible investment costs, and the investment of over 100 million, this percentage can not be greater than 17% For investments that exceed the total amount of 200 million euros and create at least 1,000 new jobs, resources are determined in the amount of 25% of the total investment For investments in excess of 50 million euros and create at least 300 new jobs, resources are determined in the amount of 20% of the total investment Port Governance Agency rbia offers to foreign investors What Serbia offers to investors?

Vuk Perović General Manager Nemanjina Belgrade The Republic of Serbia url: THANK YOU FOR YOUR ATTENTION