1. 5 th 5 th Vienna Economic Forum Role of the Investment Development Bank of the Republic of Srpska in the Economic Development of the Republic of Srpska Republic of Srpska RS Ministry of Finance 10-11 November 2008

2. Republic of Srpska Covers an area of 25.053 square kilometersCovers an area of 25.053 square kilometers The Republic of Srpska hasThe Republic of Srpska has a population of 1.471.529 Member of AssemblyMember of Assembly of European Region

3. Economic figures Gross Domestic Product (in nominal terms) in 2007 amounted to EUR 3.75 billionGross Domestic Product (in nominal terms) in 2007 amounted to EUR 3.75 billion 2007 GDP growth rate amounted to over 13.2% in nominal terms, 6.5% in real terms2007 GDP growth rate amounted to over 13.2% in nominal terms, 6.5% in real terms Expected GDP growth rate in 2008 of 11.7% in nominal terms and 7.2% in real terms (est.)Expected GDP growth rate in 2008 of 11.7% in nominal terms and 7.2% in real terms (est.) Profit tax 10%Profit tax 10% Income tax 10%Income tax 10% Health and social insurance contribution are 28% (gross)Health and social insurance contribution are 28% (gross)

4. Economic figures Share of public spending in GDP in the Republic of Srpska below 40%Share of public spending in GDP in the Republic of Srpska below 40% Causes : efficient budget policyefficient budget policy efficient public spending policyefficient public spending policy Share of debt (internal and foreign debt) in GDP in the Republic of Srpska below 40%Share of debt (internal and foreign debt) in GDP in the Republic of Srpska below 40% In last three years primary surplus amounted to 1.5% of GDPIn last three years primary surplus amounted to 1.5% of GDP Competitive advantagesCompetitive advantages AgricultureAgriculture Hydro potential-electric energy sectorHydro potential-electric energy sector

5. Activities in 2007 Successful privatization of Telekom Srpska –Total proceeds of Telekom privatization amount to EUR 644 million Adopted Development Program of the Republic of Srpska 2007-2011 –The Economic-Social Program EUR 303 million (47%) Socially-useful public investments. Grant funds - realization through the budget system o the RS –The Industrial-Development Program EUR 341.3 million (53%) Profitable public investments- realization through Investment- development banks and its Funds Founded Investment-development Bank of the RS

6. Investment Development Bank of the Republic of Srpska (RS IDB) The RS IDB is registered as a Joint Stock Company,The RS IDB is registered as a Joint Stock Company, 100% owned by the Republic of Srpska The RS IDB is not deposit bankThe RS IDB is not deposit bank Conducts business operations with all banks registeredConducts business operations with all banks registered at the territory of the Republic of Srpska –Provided availability of capital to commercial banks for credit lines –Commercial banks invest funds to end users in line with RS IDB credit lines The strategic objectives of the RSIDB are encouragement ofThe strategic objectives of the RSIDB are encouragement of investment and fostering of development in the Republic of Srpska

7. RS IDB Role Efficient and professional management of the Republic of Srpska assets formally and legally registered with six fundsEfficient and professional management of the Republic of Srpska assets formally and legally registered with six funds Providing of support to development and investment projects in the Republic of SrpskaProviding of support to development and investment projects in the Republic of Srpska Achievement of synergy effect in resource management of the Republic of SrpskaAchievement of synergy effect in resource management of the Republic of Srpska Support to the acceleration of reform processes and economic development of the Republic of Srpska (keeping in mind the social and environmental aspects)Support to the acceleration of reform processes and economic development of the Republic of Srpska (keeping in mind the social and environmental aspects)

8. Global Organization of RS IDB RSIDB Fund for Real Estate and Claims Management Share Fund Housing Fund Fund for Development of the Eastern part of the Republic of Srpska Restitution FundDevelopment and Employment Fund

9. Main Features of the RS IDB Highly professional financial institutionHighly professional financial institution Portfolio value – over EUR 1.3 billionPortfolio value – over EUR 1.3 billion Investment of over EUR 300 million over the next three yearsInvestment of over EUR 300 million over the next three years Active participation in capital marketActive participation in capital market Privatization of state capital in companiesPrivatization of state capital in companies

10. RS IDB Activities Credit linesCredit lines Trade in securitiesTrade in securities Privatization and restructuringPrivatization and restructuring Identification and promotion of investment potentials of the Republic of SrpskaIdentification and promotion of investment potentials of the Republic of Srpska

11. Credit Lines  Investment through commercial banks and microcredit companies: 1. For start-up activities 2. For micro-business in agriculture 3. For agriculture 4. For entrepreneurs and companies 5. Housing loans 6. For units of local self-governance Reduced interest rate for: projects implemented in the territory of underdeveloped and extremely underdeveloped municipalities; clusters; projects in the field of processing industry and energy production; tourism and exporters Interest on credits invested from funds managed by RS IDB to end users are 4,00-7,50 %

12. Trade in securities -Management of Bank portfolio -Portfolio restructuring -Maintenance and expansion of capital value -Significant participant in capital market

13. Privatization and restructuring -Acceleration of privatization process by means of sales in stock exchange -Active participation in financial restructuring of companies -Directing of sales revenues (further strengthening of companies and capital market) -Participation in corporate governance

14. Identification and promotion of investment potentials of the Republic of Srpska –Cooperation with International Financial Institutions (EBRD, WB, EIB) on support for credit lines –Willingness for joint financing of relevant projects for the RS –Attractive projects – companies being privatized; private companies (joint ventures); infrastructure; natural resources -Attractive locations – greenfield and brownfield investments (database of attractive locations in municipalities) -Business mediation – matchmaking between local and foreign investors -Support to investors – database for foreign investors “Invest in the RS”, business counsel, contact facilitation, financial support

15. Contact information Mladena Stojanovića 7 78000 Banja Luka Republic of Srpska www.irbrs.net Phone: +387 (0)51 334 751, +387 (0)51 334 706 Fax: +387 (0)51 347 090 www.irbrs.net

16. Republic of Srpska Welcomes You as a Place for Your Future Investments Republic of Srpska Welcomes You as a Place for Your Future Investments