EBRD activities in UK/US-Kosovo Trade & Investment Forum 2016 • Holger Muent, Regional Head Western Balkans Kosovo Economic Development – The EBRD Perspective

1. The EBRD in Kosovo

2. Kosovo Economic Overview

3. The EBRD Strategy for Kosovo What is the EBRD?

Net cumulative business investment • International financial institution, promotes transition to market economies in 35 12 110 105 11 100 countries from central to 95 10 90

central Asia and the Southern cumulative Net 85 9 80 and Eastern Mediterranean – 8 75 70 SEMED region) 7 65 60

6 55 business investment business

investment (ABI) 50 • Owned by 65 countries and two 5 45 40 inter-governmental institutions. 4 35 30 3 25 • 2 20

Capital base of €30 billion. 15 Annual business 1 10 5 • Invested over €86 billion in more 0 0 than 4,007 projects since 1991

Equity ABI Debt ABI Net Cumulative Business Investment

7 November, 2016 3 EBRD Investments in Kosovo

• Kosovo has been EBRD country of operations since 2012 • Total commitment of € 204 million in 49 projects • Largest share in infrastructure and energy; 21% of total commitments in the financial sector

Significant infrastructure projects: • North-South Railway Line • Road Rehabilitation • Transmission Network Strengthening • Municipal Transport in

7 November, 2016 4 Kosovo Economic Development – Fundamentals

• Prospective EU membership • Macro-economic stability • Strategic location • Low labour costs, young population • Regional Integration Kosovo Economic Overview

• GDP growth picked up in 2015 • EU Approximation has advanced • Improvements in Business Climate Reforms • National Development Strategy in place Kosovo – Financial Sector Overview

• Kosovo’s banking sector comprises of 10 active banks, all private, of which 8 majority foreign- owned • Liquidity and Capital Adequacy are high • Asset Quality remains very good • Lending Activity is recovering, but still low in regional context • Private Sector Loan Portfolio is divided between loans to households and loans to enterprises 35/65

Private sector credit, % GDP Private sector loans by sector, per cent share

20% YoY credit growth Households 10% 12% 0% Agriculture 2% Industry 56 54 35% 50 47 Construction 37 35 33% Wholesale and retail trade 3% 5% 10% Hotels and restaurants

BIH MNE MKD SRB ALB KOS Other services

Source: National central banks via CEIC Source:

7 November, 2016 7 The EBRD Strategy for Kosovo

• Close alignment with government priorities and EU approximation process • Key themes:

• Competitiveness of Private Sector

• Energy Security and Sustainability

• Connectivity and Regional Integration

Private Sector Competitiveness Key for Future Economic Growth

7 November, 2016 8 Private Sector Competitiveness • Investment

• Through financial intermediaries:

• Reaching smaller companies

• Specialised products, focussing on underserved segments and specific investments

• Direct Investments:

• FDI

• Larger Local Investors (not in competition with local banks!)

• Advisory

7 November, 2016 9 Contacts

•For all further enquiries, please contact:

• Holger Muent Director, Western Balkans Tel: + 44 207 338 7413 Email: [email protected] EBRD, One Exchange Square London, EC2A 2JN UK

• Elena Petrovska • Head of Office Rruga Prishtinë-Fushë Kosovë • 10060 Prishtina • Kosovo • Tel: +381 38 242 07000 • Email: [email protected] • www.ebrd.com 7 November, 2016 18