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EBRD considers first direct investments in Kosovo
The European Bank for Reconstruction and Development is considering investments amounting to several million euros as it prepares to commit its own money for the first time in Kosovo, Olivier Descamps, the EBRD's Business Group Director for Southeastern Europe said at the end of a two-day visit to the province. The EBRD opened a local office in Pristina in February.
Mr Descamps met with Ibrahim Rugova, leader of the Democratic League of Kosovo, and Andrew Bearpark, head of Pillar II at UNMIK, the UN's Kosovo administration, as well as senior officials from the European Agency for Reconstruction (EAR) and other agencies. The meetings, said Mr Descamps, were focused on getting a better understanding of the investment climate in Kosovo, hearing what the economic priorities are ahead and discussing how the EBRD can broaden its support.
Until January, when the Federal Republic of Yugoslavia became a member of the EBRD, the Bank had been playing an indirect role in Kosovo, mobilising grant and bilateral funds as well as extending the operations of existing EBRD projects in neighbouring countries into the province. The EBRD backed the establishment of the Micro Enterprise Bank Kosovo, through the Micro Enterprise Bank Bosnia. It also sponsored the extension of operations of the Albanian Reconstruction Equity Fund (AREF), which provides finance to medium-sized private sector companies. "The EBRD has taken the lead in micro and SME financing in Kosovo and we aim to build on this," Mr Descamps said.
Mr Descamps said the equity fund had recently finalised two investments in Kosovo, together amounting to €1 million. The projects - one a maker of plastic products in Pristina, the other a pro-ducer of building materials in Peja - are important because they support medium-sized manufacturing enterprises, employing 20 people or more. The fund has further projects under consideration. "While it is important to provide commercial finance to the small-business community via initiatives like the Micro Enterprise Bank, it is equally important that the EBRD target larger companies, which offer more jobs and manufacture products. That really helps boost long-term economic growth," he said.
The new investments under consideration by the EBRD, said Mr Descamps, will feature in a forthcoming action plan. While it is too early to discuss the plan in detail, he said, it will focus on key operations the Bank can support to promote investment in Kosovo. Mr Descamps added that further investment opportunities in Kosovo would be likely to materialise when the outstanding issue of ownership rights is resolved and a clear privatisation programme implemented. He said: "Privatisation is a key prerequisite for economic growth."
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