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EBRD helps Telekom Srpske prepare for privatisation
€30 million loan to make operator more attractive to private investors
A €30 million loan from the EBRD to Telekom Srpske, the state-owned telecoms operator in Republika Srpska, will help the company increase its number of fixed and mobile networks in the region, and generally improve its level of services. The government of Republika Srpska, one of two entities of Bosnia and Herzegovina, has at the same time re-affirmed its commitment to go ahead with the privatisation process.
The loan - the EBRD's first in Republika Srpska and the largest in BiH without a guarantee from the government - will also help the region's second-largest telecoms operator ensure that the steps leading up to the company's privatisation, are taken transparently and in accordance with international procurement practices.
Jean-Marc Peterschmitt, Director for the Western Balkans at the EBRD, said the loan is a direct response to the commitment of the Government of Republika Srpska to continue the country's privatisation process. He emphasised it will help the company become more attractive to foreign investors ahead of its privatisation, expected within two years, improving its competitiveness on the market and that the increased competition will benefit the whole sector, as well as telephone customers.
The loan builds on an €18 million loan signed in 1998 to support the reconstruction of three telecoms operators in Bosnia and Herzegovina, including Telekom Srpska, following the regional conflict in the early-1990s. That loan was supported by more than €15 million in donor funds from countries including Germany, Italy, Japan, Switzerland and the United Kingdom.
Dr. Mladen Ivanic, the Prime Minister of Republika Srpska, said the loan from the EBRD will push forward Telekom Srpske's privatisation, which will bring fresh capital to support other development projects that ultimately benefit many of the country's residents. Mr Ivanic added that the government is committed to go ahead with the privatisation of other infrastructure companies in the near future
Zeljko Jungic, General Manager of Telekom Srpske, emphasised that this support will help accelerate development plans that should enable Telekom Srpske to maintain a leading position in Republika Srpska and achieve a leading position in BiH. He said projects financed by this loan will offer new telecommunications services to the people of the region.
Telekom Srpske, founded in 1996, with its headquarters in Banja Luka, is 80 per cent owned by Republika Srpska and public funds. As a leading telecoms operator in the region, the company offers services to clients that include fixed and mobile telephony, and as of this year is also the national internet provider.
To date the Bank has invested €240 million in 27 projects in Bosnia and Herzegovina, and more than €1.7 billion in 64 projects in the telecoms sector across central and eastern Europe and the CIS.
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