INVESTMENT POTENTIALS OF THE CITY OF

Siniša Mali, PhD, CFA Mayor of the City of Belgrade Belgrade – continuity in development Three pillars of development

• Infrastructure • Public-private partnerships (PPPs) • Public investment • Foreign direct investment • Brownfield • Greenfield • Privatization • Small & medium sized enterprises (SMEs) Belgrade – PPP center of excellence • Eight projects with est. value between 1.5 and 2bn EUR in the pipeline so far • Biggest municipal PPP portfolio in the region • Possibly the biggest municipal PPP portfolio in Europe (excluding UK and Poland) • Not including potential PPPs and self- initiated proposals (non-solicited bids) PPP project pipeline 1/2

• Two major projects currently being tendered out: • Vinca waste treatment and disposal with WtE/EfW component – est. capex around 250m EUR, up to 30 years • Public transport – 500m EUR of availability payment for 10 years PPP project pipeline 2/2

• Four more due for tendering in Q1 2016 • Kindergartens (DBFOT) • Replacement and maintenance of 6000 elevators • Five parking garages (DBFOT) • Public lightning for seven municipalities (ESCO) • Two large-scale PPP projects due in mid-2016 • Four WWTPs, est. capex around 150m EUR • New central bus station (Block 42) • Existing central bus and rail Total area of Block 42: station shall be relocated 18.24 ha due to the implementation of the Belgrade Waterfront GFA of the rail station project (including commercial • New bus station will be purposes): constructed under a PPP around 150k sqm scheme, possibly together with new rail station GFA of the bus station • Winning design has been (including commercial chosen on competition in purposes): 2014, and will be a around 180k sqm reference solution for the PPP Additional real estate • Winning bidder could available for commercial develop commercial real purposes: estate around 80k sqm • The largest PPP in public transport in the region Traffic infrastructure • Reconstruction of Slavija square, major square in the city center, due to start in March 2016, financed from EBRD loan • Reconstruction of the Tram Bridge, one of the central Belgrade bridges, and construction of tunnels beneath the city center, expected due to the implementation of the Belgrade Waterfront project in 2016 • Belgrade bypass/ring road planned to be completed in the following period Belgrade Metro • After many decades of planning, the project of Belgrade metro is now in its final stage of preparation • Following completion of SMARTPLAN (traffic master plan of the City of Belgrade) in 2015, new lines will be defined, leading to the project realization after 2016 • Estimated value under current assumptions is around 2bn EUR Water and sewerage infrastructure • Long-term investment plan of BVK, Belgrade water and sewerage company, includes 5 major WWTPs, refurbishment of existing WTPs, and completion of the interceptor system with est. value of 1.8bn EUR • Refurbishment of WTPs, funded from EBRD loan, will be tendered out next year • Along with other infrastructure projects implemented by the City, these represent significant opportunity for construction industry, heavily affected by the economic downturn

Sava Center brownfield • Reconstruction of Sava Center, one of the biggest congress centers in Europe completed in 1979, planned for 2016 • GFA around 69k sqm • Est. value of reconstruction around 25m EUR • Important synergies with air transport and hospitality industries Greenfield real estate projects • Booming hospitality industry • Crowne Plaza (December 2013) • Radisson Blu Old Mill (December 2014) • Mariott Courtyard (September 2015) • Hilton (construction to start in 2015) • New wave of shopping malls and retail parks • Park (May 2015) • Belgrade Plaza (in construction) • Rajiceva Shopping Centar (in construction) • Number of smaller residential projects Belgrade Waterfront • Biggest real estate project in the region, worth 3.5bn EUR, to be realized within next 30 years • Implemented under the bilateral treaty between the Republic of and UAE • Construction starting this week • After almost a century of planning, Belgrade is finally coming to its waterfront Economic and free zones

• City is actively supporting reindustrialization policy of the Government through formation of economic and free zones

• Five economic zones envisaged around Pan-European Corridor X, three more in the pipeline

• First free zone established in July 2015 in Obrenovac and Krnjaca, first agreement signed with Meita Group • Three more free zones planned in Mladenovac, Lazarevac and Grocka • Focus on economic development of suburban municipalities Privatization – the big picture

• Privatization process in its current form started in 2001 • City of Belgrade is supporting the efforts of the Government to finalize this process, under the auspices of the World Bank and IMF • City-wise, divestment of non-core activities and assets Privatization pipeline

• City-owned television Studio B successfully sold • PKB, a city-owned agricultural holding, about to be tendered out in mid-October • Numerous projects from the portfolio of the Privatization Agency located in Belgrade PKB privatisation basics

Asset sale: • Agricultural Land – 19k ha • Buildings • Basic herd (cattle, swine and goats) – over 30k heads • Equipment • Shares in four subsidiaries • inventory

Starting price: 187m EUR (51% of the estimated asset value)

Main covenants: social programme and business continuity SMEs

• Over 100k of SMEs registered on the territory of the City • SMEs are traditionally important part of urban fabric of Belgrade, and represent milestone of its economy just as is the case in the EU • City is implementing different measures of support in line with international best practices Important sinergies • Belgrade is quickly regaining its position of a regional hub • Planned concession over Belgrade airport as the airport reaches its capacities due to the increased number of passengers • Kick-started by Etihad acquiring 49% in the Serbian flag carrier, now re-branded as Air Serbia • Overall, number of visitors to Belgrade is steadily rising with double- digit increase Institutional support • City of Belgrade is working on a number of strategic documents, defining key development concepts that will be implemented in next decades • On the other hand, City administration is reaching out to investors • In order to help interested investors, the City has formed Project Development Office, as a way to increase efficiency and facilitate bureaucratic procedures • With adoption of the Law on Investment, the City hopes that the Project Development Office will grow into one-stop shop, becoming a single point of contact for all investors, and streamlining all procedures BELGRADE WELCOMES YOU!