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5th 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 Republic of Srpska • Covers an area of 25.053 square kilometers • The Republic of Srpska has a population of 1.471.529 • Member of Assembly of European Region Economic figures • Gross 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 terms • Expected GDP growth rate in 2008 of 11.7% in nominal terms and 7.2% in real terms (est.) • Profit tax 10% • Income tax 10% • Health and social insurance contribution are 28% (gross) Economic figures • Share of public spending in GDP in the Republic of Srpska below 40% Causes : • efficient budget policy • efficient public spending policy • 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 GDP • Competitive advantages • Agriculture • Hydro potential-electric energy sector 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 Investmentdevelopment banks and its Funds • Founded Investment-development Bank of the RS Investment Development Bank of the Republic of Srpska (RS IDB) • The RS IDB is registered as a Joint Stock Company, 100% owned by the Republic of Srpska • The RS IDB is not deposit bank • Conducts 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 of investment and fostering of development in the Republic of Srpska RS IDB Role • Efficient 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 Srpska • Achievement 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) Global Organization of RS IDB RSIDB Housing Fund Development and Employment Fund Share Fund Restitution Fund Fund for Real Estate and Claims Management Fund for Development of the Eastern part of the Republic of Srpska Main Features of the RS IDB • Highly professional financial institution • Portfolio value – over EUR 1.3 billion • Investment of over EUR 300 million over the next three years • Active participation in capital market • Privatization of state capital in companies RS IDB Activities • Credit lines • Trade in securities • Privatization and restructuring • Identification and promotion of investment potentials of the Republic of Srpska 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 % Trade in securities - Management of Bank portfolio - Portfolio restructuring - Maintenance and expansion of capital value - Significant participant in capital market 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 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 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 Republic of Srpska Welcomes You as a Place for Your Future Investments