1. European Investment Bank
Confindustria Italy Conference EIB Financial Instruments and Support to Investment Projects Belgrade, 15 April 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.
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European Investment Bank

2. 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
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European Investment Bank

3. European Investment Bank
EIB Signatures
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 and going back to € 61 bn in 2011.
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European Investment Bank

4. 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 € 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 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 EIB is expected to contribute EUR 20 bn, WB 6.5 bn and EBRD EUR 4bn. 4
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European Investment Bank Group
European Investment Bank Group 4

5. 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
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European Investment Bank Group
European Investment Bank Group 5

6. 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 , 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.
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European Investment Bank

7. 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.
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European Investment Bank Group

8. European Investment Bank Group
Serbia: the main beneficiary of EIB loans in the Western Balkan Region circa EUR 4.0 bn  
Signatures in 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
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European Investment Bank Group 8

9. 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 - that provides sustainable financing to micro and small enterprises and to the Green for Growth Fund South East Europe (for RE and EE -
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
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European Investment Bank

10. 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.
Contact details for SME bank intermediaries in all countries of operation are on our website.
Roughly 30-40% of EIB portfolio is bank intermediated.
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European Investment Bank

11. 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
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European Investment Bank

12. 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.
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European Investment Bank Group

13. 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.
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European Investment Bank Group

14. 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.
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European Investment Bank Group 14

15. 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.
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European Investment Bank

16. THANK YOU Andréas Beikos
Head of Representative Office for the Western Balkans
European Investment Bank
Tel:
Contact details for larger size projects and for EIF products. 16
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European Investment Bank