Annual Report 2018 | 1 WB EDIF is an EU-funded initiative aimed WB EDIF at improving access to finance for small business owners in the 7 economies of the Western Balkans. WB EDIF leverages upon the expertise of 27 international, regional and local market Western Balkans players including representation from the economies themselves. Enterprise WB EDIF is mobilising approximately EUR 650m of financing and support for Development and small and medium sized enterprises (SMEs). Innovation Facility Annual Report Data as of 31 December 2018 WB EDIF Western Balkans Enterprise Development and Innovation Facility 2 | Annual Report 2018 Foreword A new edition of the Western Balkans Enterprise Development and We also worked substantially on visibility and communication, A credible enlargement Innovation Facility (WB EDIF) Annual Report is now available. I am especially via a revamped website. perspective for and enhanced EU engagement with the delighted to share the main achievements. Via WB EDIF, since 2012 we 7 Western Balkans have succeeded to sustain more than 78 000 jobs, and to provide 2018 saw also a number of other important events on the political stage. financial or technical support to more than 4 000 SMEs in the region. These included: During 2018 the following highlights stand out for me: • The February European Commission Communication “A credible enlargement perspective for and enhanced EU engagement with the The financial instruments roll-out is well on track: the Western Balkans”, setting out a reinforced approach by the EU to the Competitiveness Programme (lending), launched in January, has region. 1 good market uptake. Two loan agreements were signed in Bosnia • The EU-Western Balkans Summit in Sofia on 17 May, organised by and Herzegovina. The Western Balkans companies will benefit from the Bulgarian Presidency of the Council, providing a vital impetus to Colin Wolfe the EUR 1.5m grant investment incentives to be offered in 2019. perspectives for the region, and also to the platform. Head of Unit, Western Balkans Regional Cooperation The EUR 20m EU contribution to the Guarantee Facility for Serbia In summary, 2018 EDIF activities substantially increased the economic European Commission Directorate General for has achieved higher leverage than expected. We will translate prospects of the region. We worked successfully together to improve the Neighbourhood & Enlargement 2 this at least EUR 180m of loans, to serve a much higher number of business environment. We promoted entrepreneurship, innovation and Negotiations (DG NEAR) SMEs than initially targeted. regional inter-connectivity. We took significant steps to address youth unemployment. With the two equity Funds, pioneers in the region, we have now over 30 companies from seed and start-up to expansion In achieving all this, I would like to thank all the WB EDIF beneficiaries, the 3 stage. Our equity finance, which totals ca. EUR 138m, supports, financing partners and the donors for their continued hard work during for example, the first private pension fund in Bosnia and 2018. Together, let’s keep the ambitions high for the years to come. Herzegovina. We have also facilitated the expansion of the largest pharmaceutical distributor in Kosovo*. The equity funds are also behind innovations such as an analysis platform for drone operators and farmers, and a unique speech- 4 to-text converter for Slavic languages. We are in addition bringing people back to the region, building on techno-transfer operations and using the innovation and the entrepreneurial capacity of the diaspora. We staged more than 30 international and regional events, covering all target groups: policy makers, practitioners, business 5 owners, industry representatives, investors. In June, the first WB EDIF Business Forum took place, in Belgrade. It brought together 150 participants from the region. This 6 dedicated business-to-finance event enabled SMEs to meet the finance and support services providers. We thus provided a *This designation, used throughout this publication, is without prejudice to positions unique opportunity to pitch business ideas, and to understand on status, and is in line with UNSCR 1244/1999 and the ICJ Opinion on the Kosovo what the platform has to offer. Its success means that we are declaration of independence. transforming the forum into an annual event. Photo from the WB EDIF Business Forum 2018 Mission Contents WB EDIF was launched in 2012 with the purpose of providing financing and business 03 04 05 support to SMEs in the Western Balkans. Partners WB EDIF: Key Figures By supporting SMEs and the infrastructure and Investors The Platform surrounding them, WB EDIF contributes to the Approach overall growth and development of the Western Balkans economies themselves. Pillars WB EDIF leverages upon the expertise and capabilities of its partners, each of which offers 11 19 25 27 key know-how and experience in the region. Pillar 1 Pillar 2 Pillar 3 Pillar 4 Equity Guarantees Lending Support Services Case studies 41 18 29 33 Beneficiary APM Own EU-Reparis Overview Ministerial Conference Building the future of SMEs Interviews in the Western 23 37 Interview with Interview with Balkans Alessandro Marzena Tappi Kisielewska 1 | Annual Report 2018 Annual Report 2018 | 2 Partners WB EDIF brings together WB EDIF: The Platform Approach and Investors key market players to create a platform for dialogue and a toolbox of instruments. Pillars Western SME equity Balkans SME loan financing 1 beneficiaries 2 guarantees ENIF + ENEF GF I, GF II, GF Serbia & Youth EU, EIF, EBRD, EU, EIF European World Bank KfW, DEG, OeEB, Commission Group Western Balkan Albania European Western Balkans beneficiaries & Investment Fund Investment Framework private investors Bosnia & Herzegovina Croatia European Bank European for Reconstruction Investment Bank and Development Italian OECD Republic Kosovo* AIDA Austrian Development Bank SME The Republic of Support lending 3 North Macedonia 4 Services Competitiveness Triple Helix, VC-IR, Programme Montenegro ASB, SME Policy KfW Index, EU Reparis Development Simest Bank & SBA Serbia EU, EBRD EU, EIB, EBRD, World Bank, OECD KfW DEG Republic of Serbia Innovation Fund Bosnia and CDP Herzegovina WB EDIF was conceived as a platform upon which to This mixture gave rise to the WB EDIF ‘Platform’ or Croatia Hamag Bicro launch both financial products as well as capacity ‘Umbrella’ as further illustrated above. Montenegro Kosovo Investment and Enterprise building measures to crucially target SMEs at all Support Agency Kosovo* stages of development, from pre-seed and seed all the way to more developed SMEs seeking expansion Since WB EDIF is a platform, it can evolve over capital. time and easily adapt to new market conditions or thematic areas of focus, whereby instruments In launching such an ambitious project, it was vital and support measures can be approved jointly Serbia The Republic of North Macedonia to involve a multitude of International Financial by the representative partners for inclusion under Albania Institutions (IFIs), as well as bilateral partners to build the umbrella, where these are considered to be of on their expertise, as well as to bring in the local strategic importance. and regional perspective by sharing ownership with representation from the economies themselves. 3 | Annual Report 2018 Annual Report 2018 | 4 Key Figures WB EDIF Progress as at at a glance 31 December Total funding 2018* 275M€ resources resulting in 264M€ Total deployed currently via the financial instruments Potential available financing to SMEs via WB 715M€ EDIF’s financial instruments SMEs financed SMEs to be supported in the 2805 4 600 Western Balkans Dozens of workshops, conferences, 4 022 500 Support seminars and competitions organised for the benefit of Projects hundreds of SMEs, policy makers, SMEs providing trainers, consultants and other supported complementary soft market players measures ENIF, ENEF Jobs GF supported Competitiveness 7 27 Programme 78 032 Beneficiary WB EDIF Financial economies Partners Instruments 5 | Annual Report 2018 *SMEs and jobs supported include the estimates under the support services programmes Annual Report 2018 | 6 6 years of WB EDIF DEC APR MAR MAR 2012 2013 2013 2014 2014 2015 Launch of the WB EDIF financing platform First round of SME Policy index Launch of EU First closing of Second closing bringing in also various the Guarantee and Triple Helix REPARIS and ENEF at 38.5m of ENEF at technical assistance Facility launched, Programmes Venture Capital EUR 48.5m programmes EUR 21.9m launched & Investment Readiness programmes SEP First closing of ENIF 2015 at EUR 25m DEC EBRD’s Advice for Small Businesses is launched 2015 under the WB EDIF APR MAR 2017 2016 2016 Launch of the Second Second round of Competitiveness closing of ENIF the Guarantee (lending) programme at EUR 40m Facility launched, EUR 17.5m NOV EDIF holds its 5th anniversary 2017 event in Sarajevo Replenishment of Guarantee Future plans Facility with EUR 20m, dedicated 2018 to Serbia and EUR 10m for regional Guarantee Facility to support Youth Employment JUN DEC 2018 2018 2019 2019 2020 PAG** and first Launch of Launch of phase Launch of a proof WB EDIF Business Phase II of the phase II II Advice for Small of concept Grant forum for the first Venture Capital of the EU Businesses scheme time in the region and Investment REPARIS Readiness Programme **Platform Advisory Group 7 | Annual Report 2018 Annual Report 2018 | 8 Pillars 9 | Annual Report 2018 Annual Report 2018 | 10 Pillar Equity The Enterprise Innovation Fund 01 The Enterprise Expansion Fund Stage focus Geographical focus ENIF ENIF invests in companies from early stage to later ENIF focuses on the Western Balkans economies, i.e.: The Enterprise stage across a spectrum, from very early revenue Albania, Bosnia & Herzegovina, North Macedonia, through companies with established revenues and Kosovo*, Montenegro, Serbia and Croatia. All of the Innovation Fund close to profitability. ENIF also has a dedicated Fund’s investments will be in SMEs. seed pocket for investments in the most promising seed stage, pre-revenue companies.