We were very active in delivering the support and demonstrating our commitment to WB in these difficult times. The EIB has strong pipeline of projects for this region estimated to €2.3 billion to support the long-term sustainable development, strengthening the SME sectors
The EIB has put its technical expertise and assistance at disposal to its partners in the Western Balkans, both from our own resources and EU grants. The aim is to help them reform the healthcare sectors in line with the best EU standards, enabling modern medical service accessible to all. In addition, we will provide extended eligibilities for healthcare and civil protection projects for Pandemic and Emergency Preparedness, and allow re-purposing of existing facilities to support healthcare and the private sector development.
The EIB Group has provided € 5.2 billion to non-EU countries as part of a broader set of measures to address the effects of the COVID-19 pandemic. Is the money already distributed to beneficiary countries?
As the EU Bank, the EIB has reacted promptly and announced the delivery of COVID-19 financial package worth €5.2 bn for the countries outside EU, out of which €1.7 bn is dedicated to the Western Balkan countries. This immediate support is provided to support social and economic recovery from the pandemic by addressing the most urgent deficits in the healthcare and SME sector.
Apart from this immediate support package, the EIB has strong pipeline of projects for this region estimated to €2.3 billion to support the long-term sustainable development, strengthening the SME sectors, reforms of the healthcare systems and modernisation of vital infrastructure. The goal is to create more resilient economies and societies in the Western Balkans with increased preparedness for future crises and emergencies.
Since introduction of these measures, we were very active in delivering the support and demonstrating our commitment to WB in these difficult times. In April, we have unlocked a €10 million loan for SMEs in Bosnia and Herzegovina, and €30 million for Montenegrin SMEs and Mid-Caps, in cooperation with the local banks. Those loans were dedicated to help private sector sustain liquidity and jobs, as well as the ability to undertake new financing in the future.
In addition, a new loan for BiH, Albania and Kosovo* aiming at promoting youth employment will be available soon. The European Investment Fund will also provide loan guarantees for Bosnian SMEs allowing easier access to finance for the affected companies by COVID -19 and faster economic recovery. We have recently signed a €11.8 mil grant for the construction of section on Corridor Vc in BiH as well.
The pandemic imposed a need for creation of more integrated and economically autonomous markets based on digitalization and green transition
What should the new government do to increase the level of capital investments in Serbia and thus encourage both the private and public sector?
The level of capital investments in Serbia is having a gradual upward tendency that is expected to encounter a setback due to the pandemic; nevertheless, some sectors were able to sustain business operations, such as the construction sector.
The crisis imposed new priorities such as building of stronger healthcare system with increased preparedness for future emergencies. The other issues that might impede economic stability in the years to come are weather-related natural disasters inflicting sever damage to property and crops. These factors require development of investment strategy that will lead to more resilient healthcare and private sectors, based on rehabilitated and modern vital infrastructure able to respond to these challenges. Development of modern transportation, energy and digital networks, as well as sewage, utility and flood protection systems is therefore essential for future economic growth and resilience.
According to the IMF’s estimate, Serbian GDP will decline by 3% this year. What is your assessment of Serbia’s position in relation to the countries of the region and the EU?
Until the pandemic, Serbia recorded a steady economic growth and improved macroeconomic stability. By introducing set of fiscal measures during the crises, it has diminished the economic fallout as many other countries have done. Economic recovery will largely depend on the ability to maintain business continuity and contain the pandemics during the autumn, when the highest peak is expected. Therefore, a maximum support to private and the healthcare sector should continue to be the priority until the crises ends. Apart from EIB’s financial and technical assistance for these two sectors, we will continue supporting local banks and municipalities that are also severely affected by this health crisis.
The EU has recently approved the budget by 2027, while Serbian government has adopted a new set of measures. What do you think of the measures implemented by the EU and Serbia?
The EU adopted a recovery budget supporting the EU countries to mitigate negative consequences of the pandemic. This unprecedented crisis required innovative and joint approach by all EU Member States and they have demonstrated solidarity and unity at these historically challenging times. What is especially important is that this budget will support transition to digital and green economy, which are the crucial areas for more cohesive and sustainable environment, society and economy development.
The EIB is the leading climate bank and financier of sustainable projects on a global scale and the first bank to adopt Energy Lending Policy in 2019. In this regard, we plan to support the countries in transition to the green economy by mobilizing at least €100 bn by 2027 to be invested into renewable, efficient and safe energy projects.
Regarding new set of measures adopted in Serbia, they are designed to help retain employment and production capacities. As in other countries, majority of companies have not yet recovered from the first pandemic wave, whilst some of them are still operating in limited scope or are entirely out-of-business, such as the entertainment industry. Therefore, support to the SME sector through fiscal measures and additional favourable financing remains of crucial importance at this moment.
The COVID-19 pandemic has prompted countries to think more about their environment, instead of relocating production to the Far East. How do you think the crisis will affect the future distribution of production by world regions?
This crisis has taught the countries worldwide that resilient economy and access to better healthcare increases their readiness all future emergences alike. It also showed that relocation of production to other continents may be unsustainable, creating numerous disadvantages and dependencies during emergencies. As a result, it is likely to expect that markets worldwide will start to integrate within specific regions that are in geographical proximity and at the same continent.
Thus, the connectivity will become a top priority as better road, digital and energy infrastructure facilitates trade flow, economic growth and new employment opportunities. In transportation infrastructure alone, the EIB has invested over €2 bn in the Western Balkans in the previous decade building hundreds of kilometres of modern highways with improved road and rail safety and efficiency. The EIB will continue investments in transportation network across the entire region as well as support new strategic projects in energy and digital infrastructure.
We will continue investing into road, railway, waterway and air traffic infrastructure, as well into rehabilitation of utility and sewage system across Serbia
The EIB cooperates a lot with banks in Serbia on various projects and supports the SME segment and entrepreneurship. Which ongoing projects would you like to single out?
SMEs as are a backbone of local economies and EIB will continue supporting their recovery from the pandemics in the entire region. In Serbia, we have recently signed a very important €15 million loan with UniCredit Bank Serbia for SMEs that aim to increase their social impact. Under this innovative loan – the very first of this kind for EIB and Serbia, a set of goals will be agreed with the companies that aim to borrow funds. Based on the targets met, financial rewards will be distributed, encouraging them to employ people from vulnerable groups and ensure their long-term professional development and retention. The second, €10 million worth loan was facilitated by the European Investment Fund, in cooperation with Opportunity Bank a.d. Novi Sad. Micro companies, entrepreneurs and producers from rural areas will be able to access these funds for maintaining liquidity, jobs, production and business continuity.
Many large-scale projects have been implemented in the past two years like science & technology parks, the Niš Clinical Centre, etc. Can you tell us what projects are planned in the coming period?
We are very proud to finance such an important and strategic projects for Serbia. Within €200 million investment for the modernisation, redevelopment and extension of Serbia’s tertiary hospital services, Clinical Centre Niš was rehabilitated. This major medical centre in the South of Serbia has played a critical role during the pandemic by accommodating and treating large number of COVID-19 patients. In rehabilitation of 20 regional hospitals the EIB invested €50 million, including the Institute of Virology, Vaccine and Sera Torlak, where we supported modernization of vaccines production sector with EUR 3.6 million. Torlak became one of the leading institutions in containing pandemic in Serbia.
By investing another €200 mil in research and development in Serbia, the EIB contributed to construction of science and technology parks in Belgrade, Novi Sad and Niš. These innovation centres will become a hub for the most advanced IT and innovative companies, encouraging their professional and market development. In particular, Technology Park in Belgrade has already proved its wider socio-economic role. During the pandemics, medical masks and other protective equipment have been produced in this institution where the first Serbian medical ventilator has been developed as well.
In the upcoming period, we are expecting reconstruction of the Clinical Centre Serbia to be finished that is to become an important regional medical centre. We are expecting to sign a project for the digitalization of Serbian schools soon that is going to upgrade online learning equipment and platforms, as well as digital skills of 50 000 teacher across Serbia.
Development opportunities
What kind of development opportunities are there for the Western Balkans and Serbia?
Transition to green economy and renewable, efficient and safe energy supply chains should become part of national strategies towards cleaner environment and sustainable socio-economic development. Further encouraging innovation and progress in the most advanced areas of science and industry should be continued, because these competences can propel Serbia to highly competitive global markets. Parallel to this, rehabilitation and modernization of healthcare sector should remain a priority, as a prerequisite for better preparedness for future emergencies. The EIB Group is ready to support the region in the development of all these areas.