We were very active in delivering the support and demonstrating our resolve for WB during these difficult times. The EIB has strong pipeline of projects for this region estimated to EUR2.3 billion to aid the long-term sustainable development, strengthening the SME sectors
The EIB has put its technical expertise and assistance at disposal to the partners in the Western Balkans, both from your own resources and EU grants. The goal would be to enable them to reform the healthcare sectors in line with the best EU standards, enabling modern medical service available to all. In addition, we'll provide extended eligibilities for healthcare and civil protection projects for Pandemic and Emergency Preparedness, and permit re-purposing of existing facilities to aid healthcare and also the private sector development.
The EIB Group provides EUR 5.2 billion to non-EU countries included in a broader group of measures to deal with the results from the COVID-19 pandemic. May be the money already given to beneficiary countries?
As the EU Bank, the EIB has reacted promptly and announced the delivery of COVID-19 financial package worth EUR5.2 bn for that countries outside EU, of that EUR1.7 bn is dedicated towards the Western Balkan countries. This immediate support is supplied to support social and economic recovery from the pandemic by addressing probably 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 EUR2.3 billion to aid the long-term sustainable development, strengthening the SME sectors, reforms of the healthcare systems and modernisation of significant infrastructure. The aim is to create more resilient economies and societies in the Western Balkans with increased preparedness for future crises and emergencies.
Since introduction of those measures, i was very active in delivering the support and demonstrating our resolve for WB during these trying times. In April, we have unlocked a EUR10 million loan for SMEs in Bosnia and Herzegovina, and EUR30 million for Montenegrin SMEs and Mid-Caps, in cooperation using the local banks. Those loans were dedicated to help private sector sustain liquidity and jobs, as well as the capability to undertake new financing later on.
In addition, a brand new loan for BiH, Albania and Kosovo* aiming at promoting youth employment will be available soon. The European Investment Fund will even provide loan guarantees for Bosnian SMEs allowing easier access to finance for the affected companies by COVID -19 and faster economic recovery. We've recently signed a EUR11.8 mil grant for the construction of section on Corridor Vc in BiH too.
What should the new government do in order to increase the level of capital investments in Serbia and thus encourage both the private and public sector?
The degree of capital investments in Serbia is having a gradual upward tendency that's expected to encounter a setback because of the pandemic; nevertheless, some sectors could sustain business operations, like the construction sector.
The crisis imposed new priorities for example building of stronger healthcare system with an increase of preparedness for future emergencies. The other problems that might impede economic stability in the a long time are weather-related natural disasters inflicting sever property damage and crops. These factors require growth and development of investment strategy which will result in more resilient healthcare and private sectors, based on rehabilitated and modern vital infrastructure able to react 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's your assessment of Serbia’s position with regards to the countries of the region and also the EU?
Until the pandemic, Serbia recorded a stable economic growth and improved macroeconomic stability. By introducing set of fiscal measures throughout the crises, it's diminished the economic fallout as many other countries did. Economic recovery will largely depend on the ability to maintain business continuity and retain the pandemics throughout the autumn, once the highest peak is expected. Therefore, an optimum support to personal and also the healthcare sector should continue being the priority until the crises ends. Aside from EIB’s financial and technical assistance of these two sectors, we will continue supporting local banks and municipalities which are also severely affected by this health crisis.
The EU has approved the budget by 2027, while Serbian government has adopted a new set of measures. What is your opinion from the measures implemented by the EU and Serbia?
The EU adopted a recovery budget supporting the EU countries to mitigate negative consequences from 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's especially important is that this budget will support transition to digital and green economy, which are the crucial areas for additional 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 connection with this, we plan to support the countries in transition towards the green economy by mobilizing at least EUR100 bn by 2027 to become 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 with other countries, majority of companies haven't yet recovered in the first pandemic wave, whilst some of them continue to be operating in limited scope or are entirely out-of-business, like the entertainment industry. Therefore, support towards 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 much more about their environment, rather than relocating production towards 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 use of better healthcare increases their readiness all future emergences alike. It also demonstrated that relocation of production with other continents might be unsustainable, creating numerous disadvantages and dependencies during emergencies. As a result, chances are it will expect that markets worldwide will start to integrate within specific regions which are in geographical proximity and also at the same continent.
Thus, the connectivity will become a top priority as better road, digital and infrastructure facilitates trade flow, economic growth and new employment opportunities. In transportation infrastructure alone, the EIB has invested over EUR2 bn in the Western Balkans in the last decade building hundreds of kilometres of modern highways with improved road and rail safety and efficiency. The EIB continues investments in transportation network across the entire region as well as support new strategic projects in energy and digital infrastructure.
The EIB cooperates a lot with banks in Serbia on various projects and props up SME segment and entrepreneurship. Which ongoing projects do you want 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 EUR15 million loan with UniCredit Bank Serbia for SMEs that aim to improve their social impact. Under this innovative loan – the initial of this kind for EIB and Serbia, a set of goals is going to be agreed using the firms that aim to borrow funds. Based on the targets met, dollars will be distributed, encouraging these to employ people from vulnerable groups and ensure their long-term professional development and retention. The 2nd, EUR10 million worth loan was facilitated through the European Investment Fund, in cooperation with Opportunity Bank a.d. Novi Sad. Micro companies, entrepreneurs and producers from rural areas can access these funds for maintaining liquidity, jobs, production and business continuity.
Many large-scale projects have been implemented previously 2 yrs like science & technology parks, the Nis Clinical Centre, etc. Can you tell us what projects are planned in the coming period?
We are extremely proud to invest in this kind of important and strategic projects for Serbia. Within EUR200 million investment for the modernisation, redevelopment and extension of Serbia’s tertiary hospital services, Clinical Centre Nis was rehabilitated. This major medical centre within the South of Serbia has played a vital role during the pandemic by accommodating and treating large number of COVID-19 patients. In rehabilitation of 20 regional hospitals the EIB invested EUR50 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 EUR200 mil in research and development in Serbia, the EIB contributed to construction of science parks in Belgrade, Novi Sad and Nis. These innovation centres will end up a hub for the most advanced IT and innovative companies, encouraging their professional and market development. Particularly, Technology Park in Belgrade has proved its wider socio-economic role. During the pandemics, medical masks and other protective gear 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 from the Clinical Centre Serbia to be finished that is to become an important regional medical centre. We are looking to sign a task for that 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 type of development opportunities exist for that 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 within the innovative areas of science and industry should be continued, since these competences can propel Serbia to highly competitive global markets. Parallel for this, rehabilitation and modernization of healthcare sector should remain a priority, like a prerequisite for better preparedness for future emergencies. The EIB Group is able to offer the region in the growth and development of all these areas.
