BOSNIA AND HERZEGOVINA FEDERATION OF BOSNIA AND HERZEGOVINA G O V E R N M E N T PUBLIC INVESTMENT PROGRAMME IN THE FEDERATION OF BOSNIA AND HERZEGOVINA FOR THE 2006 -2008 PERIOD Sarajevo, March 2006 CONTENTS: v PUBLIC INVESTMENT PROGRAMME OF FBIH 2006-2008 INTRODUCTION 1-3 v PUBLIC INVESTMENT PROGRAMME OF FBIH 2006-2008 Table 1: General overview of the planned investment by financier and years 4 v PUBLIC INVESTMENT PROGRAMME OF FBIH 2006-2008 Table 2: Annual investments by financier, sectors and projects 6 - 77 v PUBLIC INVESTMENT PROGRAMME OF FBIH 2006-2008 Table 3: General overview of the foreign funds needed for 2006-2008 by sectors 78 v PUBLIC INVESTMENT PROGRAMME OF FBIH 2006-2008 Table 4: Overview of the foreign funds needed for 2006-2008 79 - 91 PUBLIC INVESTMENT PROGRAMME OF FBIH 2006-2008 FEDERATION OF BOSNIA AND HERZEGOVINA PUBLIC INVESTMENT PROGRAM FOR THE PERIOD 2006-2008 A) INTRODUCTION The Public investment program (hereinafter:PIP) for the period of 2006-2008 has been prepared through the updating of the previous PIP, and all in accordance with the Decree on the Establishing of the Coordination Mechanism for Management and Coordination of Development Funds in the Federation of BiH («Official Gazette of FBiH», number 48/03). Bosnia and Herzegovina's Development Strategy (PRSP) and the Budget Framework (Medium Term Expenditure Framework 2006-2008 ) were taken into consideration in preparing of the PIP 2006-2008, in order to implement polices and strategies these documents foresaw, as well as to plan in line with the financial restrictions regarding the new loan taking. B) PUBLIC INVESTMENT PROGRAM The Draft PIP 2006-2008 has been made based on the assessment and prioritization process. It contains the ongoing, completed, approved and nominated projects. It was analyzed by the PIP Commission, and afterwards submitted to the FBiH Government. Projects proposed to be included into PIP were submitted to the evaluation and prioritization processes within the Federation ministries and cantons, which delivered to the Federation Ministry of Finances, and the relevant Coordination Unit, the lists of the nominated projects with the priority rating. Criteria used in order to include the projects into PIP 2006-2008 were: - ranking at the priority list that the certain project proposed by the Federation ministry or the canton has; - its accordance with the PRSP; - the level of possible credit funds that the canton is able to sustain; - more balanced regional development; - financial limitations and priorities set out by the Medium Term Expenditure Framework in FBiH for 2006-2008. Total payments foreseen during the period 2006-2008 mount up to 1.334,7 mil KM. BAM 596,1 millions (44,7% %) of that amount refers to the ongoing projects, BAM 216,7 millions (16,2%) to the approved projects, BAM 48,4(3,6%) to the projects in preparation while BAM 473,5 millions (35,5%) represents the new financing agreements that have to be signed (BAM 438,6 millions out of that amount goes for high priority projects, 34,9 millions for medium priority projects ). It is estimated that the public investments from own sources in the medium term period will reach the amount of BAM 365,2 millions. That represents 27% of the total investments in the Federation of BiH. In addition estimates foresee some BAM 969,6 millions of foreign investments. The allocation of funds by sectors for the period 2006-2008 can be seen in the following table. PIP 2006-2008 includes the domestic and foreign funds, ongoing and approved projects and the projects proposed the financing of which yet has to be provided 1 Allocation of funds – sector-vise in a period 2006-2008: u 000 BAM Medium Projects High Total Ongoing Aproved priority Sector in priority PIP 2006- projects projects projects (%) preparation projects 2008. 1 2 3 4 5 Administration 594 594 Public safety 2.706 585 70 3.361 0,3 Demining 0 15.759 15.759 1,2 Education 21.159 2.020 2.345 25.524 1,9 Health 13.989 43.449 53.032 110.470 8,3 Social Protection 18.486 14.024 260 32.770 2,5 Agriculture 31.140 579 31.719 2,4 Water 39.022 45.046 500 156.864 15.500 256.932 19,1 Management Forestry 6.962 6.962 0,5 Culture, 13.446 3.473 16,919 1,3 Recreation, Religion and Sports Energy and 80.897 69.716 0 38.170 5.720 194.503 14,5 Mining Transport and 295.415 38.300 35.500 120.660 12.775 502.650 37,7 communications Industry 5.000 5.000 0,4 Entrepreneurship 6.524 6.524 0,5 Other sectors 23.595 44 1.400 23.790 48.829 3,7 Environment - 48.639 9.000 17680 900 76.219 5,7 Urban Planning TOTAL 596.050 216.743 48.420 438.629 34.895 1.334.738 100 Of which : Budget 140.231 64.110 3.000 104.856 3.135 315.332 23,6 Donation 19.232 41.747 0 3.716 0 64.695 4,8 Credits 393.027 109.145 45.420 325.465 31.760 904.817 67,8 Own 43.559 1.741 0 4.591 0 49.892 3,7 resources of companies External 412.259 150.892 45.420 329.182 31.760 969.514 27,3 Financing Local 183.791 65.851 3.000 109.447 3.135 365.224 72,7 Financing Within the macroeconomic restrictions, and according to the Medium Term Expenditure Framework in FBiH for 2006-2008, the total non-commercial foreign debt for investments, mounts up to BAM 360 mil. This foreign debt limit refers to all the sectors and it is very restrictive. Having in mind the financial restrictions regarding the possibility to obtain favorable funds for financing of development needs, projects at the cantonal and the Federation level have been prioritized. Appropriate allocation by sectors for the new, priority investments within the PIP 2006-2008 has been conducted based on that. Base on the sector allocation for new – proposed projects deriving from the requests made by cantonal and Federation ministries, we may conclude that the process followed the 2 recommendations of the PRSP and the Medium Term Expenditure Framework for the Federation of BiH – basic documents defining the Government policies for the forthcoming period. C) TABLES Following tables given in an attachment are an integral part of PIP. Table 1 gives a summary of the implementation plan for the projects in a period 2006- 2008, and that is, total – sector-vise, as well as the summary of the project implementation by sectors. A Tables 2 provides annual investments by financier, sectors and financijers. This overview includes the foreign financed ongoing projects with lokal countrapart, approved projects, projects in preparation and those completed. Table 3 provides and overview of planned high and middle priority nominated projects included into PIP. Table 4 gives overview of the foreign funds needed forr 2006-2008. Government of Federation and the cantonal governments are supposed to find the investors for the projects listed here. ---------------------- D) CONCLUSIONS 1. The FBiH Public Investment Programme 2006-2008 has been approved and submitted to the Ministry of Foreign Trade and Economic Relations with the objective of drafting Bosnia and Herzegovina’s 2006-2008 Public Investments Programme which is an integral part of the Bosnia and Herzegovina Development Strategy – PRSP. 2. The Government of the Federation and all the line ministries are under the obligation to use the 2006-2008 Public Investment Programme as a basis for aid mobilization (both in the form of grants and credits) in negotiations with external creditors / donors. 3. The Federal Ministry of Finance is under the obligation to submit the list of projects not covered by the Public Investment Programme to foreign donors/investors dealing with local infrastructure projects. 4. The all line ministries are under the obligation to direct revolving fonds and other development resources to the projects in Public Investment Programme. -------------------------------- 3 PUBLIC INVESTMENT PROGRAMME OF FBIH 2006-2008 Table 1: General overview of the planned investment by financier and years PUBLIC INVETMENT PROGRAMME OF FBIH 2006-2008 GENERAL OVERVIEW OF THE PLANNED INVESTMENTS BY FINANCIER AND YEARS Table 1 Curency KM Realized Plan for the amount by Planned investments 2006-2008 forthcoming Total project August 31, Unrealized Plan for TOTAL plan Plan for 2006 Plan for 2008 period State / Financier amount 2005 amount 2007 2006-2008 Austria Total 7,939,575 300,000 7,639,575 200,000 0 0 200,000 7,439,575 Belgium Total 6,719,736 1,387,228 5,332,508 5,243,421 0 0 5,243,421 89,087 Canada Total 1,478,750 0 1,478,750 430,000 0 0 430,000 1,048,750 Croatia Total 8,155,568 5,367,702 2,787,866 1,000,000 0 0 1,000,000 1,787,866 European Union Total 2,619,006 1,594,980 1,024,026 0 0 0 0 1,024,026 Germany Total 49,316,739 6,447,746 42,868,993 4,228,105 6,046,000 10,593,000 20,867,105 22,001,888 Great Britain Total 1,746,250 245,229 1,501,021 580,000 547,100 0 1,127,100 373,921 Greece Total 2,357,498 1,797,175 560,323 172,670 0 0 172,670 387,653 Hungary Total 11,356,703 0 11,356,703 11,343,814 0 0 11,343,814 12,889 Italy Total 18,835,935 11,407,390 7,428,544 6,347,163 0 0 6,347,163 1,081,382 Japan Total 62,097,947 46,869,949 15,227,998 8,377,920 0 0 8,377,920 6,850,078 Kuwait Total 69,865,661 68,368,251 1,497,410 771,777 0 0 771,777 725,633 Malaysia Total 1,167,853 900,000 267,853 0 0 0 0 267,853 Netherland Total 24,130,743 3,967,649 20,163,094 12,068,607 8,045,737 0 20,114,344 48,750 Norway Total 7,861,906 2,289,532 5,572,374 3,401,000 0 0 3,401,000 2,171,374 EBRD Total 325,753,832 23,182,486 302,571,346 58,013,217 65,884,694 51,959,237 175,857,148 126,714,198 EIB Total 249,243,090 40,099,640 209,143,450 22,998,742 20,044,000 20,367,000 63,409,742 145,733,708 European Development Bank Council Total 24,480,930