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Western Balkans in 2020 – Overcoming the Economic Crisis and Developing Competitive Economies Sarajevo, 25 February 2010 Western Balkans Investment Framework (WBIF) – a new approach to financial support in the region MASSIMO CINGOLANI Deputy Head of Division – General Directorate for Lending in Europe 08/07/2015 European Investment Bank 1 Serbia decomposition of GDP growth in domestic and foreign components Source: 15.0% 12.5% 10.0% A. Brunet "A pertinent Analytic Method to Correctly Measure Contributions to Growth in Gross Domestic Product" Paneoeconomicus, 2009, 3, pp. 397-408 35% GDP DD GDP1 EX IM GDP1 GDP1 GDP1 GDP C I G EX IM DD FD 28% 21% 7.5% 14% 5.0% 7% 2.5% 0% 0.0% -7% -2.5% -14% -5.0% -21% -7.5% 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Real GDP 4.5% 4.8% 4.2% 2.5% 8.4% 6.2% 5.7% 7.5% 5.6% -3.0% 1.5% 3.0% 5.0% 5.5% 5.5% 5.0% Domestic demand 7.4% 7.5% 24.8% 20.7% 33.0% 25.8% 20.1% 25.7% 25.0% 9.2% 12.4% 12.0% 11.8% 10.9% 8.3% 5.6% Foreign demand -2.9% -12.9 -20.7 -18.8 -24.0 -15.4 -13.7 -18.2 -18.9 -11.5 -10.8 -8.4% -6.4% -5.0% -2.5% -0.4% Real GDP Domestic demand Foreign demand -28% Data source: Calculations on World Bank up to 2008 and IMF after 08/07/2015 European Investment Bank 2 EIB Products In the Western Balkans, the EIB operates primarily through: - Direct loans to final beneficiaries for projects with a cost above EUR 25 million - Intermediated loans channeled through intermediary banks, whereby the intermediary is obliged to transfer the financial benefits from EIB resources (lower interest rates and longer maturities) to SMEs and municipalities (projects have a cost between EUR 40.000 and EUR 25 million); intermediated loans to Mid-Caps (projects above EUR 50 million) - Framework loans to central and local public authorities for projects of up to EUR 50 million Currently, the existing credit lines in the region amount to EUR 2 billion, out of which more than half are yet to be disbursed In addition, in collaboration with the EU Commission, SMEs and public authorities can also benefit from a combination of EIB loans and Commission grants (SME Finance Facility, Municipal Finance Facility, Energy Efficiency Finance Facility) The EIB contributes to the European Fund for Southeast Europe (EFSE) that provides sustainable financing to micro and small enterprises and to the South East Europe Energy Efficiency Fund (SE4F) 08/07/2015 European Investment Bank 3 EIB Activity in Western Balkans & Croatia from 2004-2009 EIB Activity in the Western Balkans & Croatia 2750 2500 2250 2000 1750 1500 EUR M 1250 1000 750 500 250 0 Approvals Signatures EUR M 2004 EUR M Approvals Signatures Disbursements 08/07/2015 2004 556 460 190 Disbursements 2005 2005 702 459 264 2006 2007 2006 804 683 476 2008 2007 869 773 457 European Investment Bank 2009 2008 677 747 529 2009 2541 1671 586 Total 6149 4793 2502 4 2009 Activity In 2009, contracts signed in the Western Balkans and Croatia for EUR 1.68 billion (EUR 1.26 billion in WB). Signatures in all countries of the region apart from Kosovo (under UNSCR 1244). Strong increase in Loans to SMEs (EUR 700 million, through 14 operations) & public infrastructure. New sectors and new types of operations. Disbursements of EUR 586 million in 2009 from EUR 529 million in 2008 (EUR 370 m and EUR 315 m without Croatia). Launch of Western Balkans Investment Framework, and development of its activities together with EC, EBRD and CEB. Implementation of Western Balkans Facility (EIB provided EUR 1 million), contribution to launch of EC Facilities (IPF-TA and IPF-MW). 08/07/2015 European Investment Bank 5 RESPONSES TO THE FINANCIAL DOWNTURN 2009 EC approved IPA Multi-Beneficiary Crisis Response Package EIB involved in: Private Sector Support Facility & Energy Efficiency Fund EIB launch of Loan for SMEs product in the Western Balkans GLs + Loans for SMEs: 2500 2250 2000 1750 1500 EUR M 1250 1000 750 500 250 0 Approvals Signatures 2004 2005 2006 2007 2008 2009 Total Approvals 115 175 185 210 415 1265 2365 Signatures 45 145 155 160 385 1051 1941 Disbursements 33 25 86 171 182 236 733 Disbursements 2010 EIB proposals to package financial products addressing SMEs’ access to finance and the regional dimension of SMEs’ financing 08/07/2015 European Investment Bank 6 2010 Outlook Consolidation of the 2009 high level of activity Focus on SMEs, large transport networks (Trans-European corridors and infrastructure) Western Balkans Investment Framework: 2010 key year - managing the volume of operations - effective coordination and pooling of financial resources - assessment of results on the ground 08/07/2015 European Investment Bank 7 WESTERN BALKANS INVESTMENT FRAMEWORK OFFICIALLY LAUNCHED on 8-9 December 2009 KEY PLAYERS: Beneficiary countries (WB including Croatia); European Commission; Partner International Financial Institutions – IFIs (EIB, EBRD, CEB); EU Member States (including bilateral financial donors) OBJECTIVE: to pool financing resources (grants and loans) on regional priority projects COMPONENTS: A Joint Grant Facility (JGF) pooling grants from the European Commission, IFIs and bilateral donors; A Joint Lending Facility (JLF) based on loans provided by IFIs SECTORS: transport, energy, environment, social sectors, SMEs, energy efficiency INTEGRATED FINANCING PACKAGES: blending loans with grants; providing customised TC (e.g. identification, technical & management assistance, feasibility study, detailed design, assistance to tendering process, supervision of works, environmental impact assessment) INTEGRATED PROJECTS PIPELINE: Steering Committee in December '09 approved 26 projects for a total of EUR 26 million of grants and EUR 2.2 billion of loans WEBSITE: www.wbif.eu (platform) under development CONTACT: [email protected] 08/07/2015 European Investment Bank 8 WESTERN BALKANS INVESTMENT FRAMEWORK HOW TO SUBMIT PROJECTS National IPA Coordinator (NIPAC) Donor Coordination Offices Beneficiary PROJECT FINANCIERS’ GROUP UPCOMING MEETINGS 2010 II - March 24 III - May 26 IV - September 29 V - November 24 Identification of project Screening Project Financiers’ Group STEERING COMMITTEE UPCOMING MEETINGS 2010 II - June 28-29 (tbc) III - Last quarter (in a Financing approval Steering Committee beneficiary country) 08/07/2015 European Investment Bank 9 THANK YOU Massimo CINGOLANI Deputy Head of Division Western Balkans Investment Framework E-mail: [email protected] Tel.: (+352) 4379 87226 Fax: (+352) 4379 67487 [email protected] 08/07/2015 European Investment Bank 10