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EBRD – Transport & Energy in Serbia

April, 2013

Aleksandar Nikcevic, Principal BankerAleksandar Nikcevic, Principal Banker

The European Bank for Reconstruction and Development

• An international financial institution promoting transition to market economies by investing mainly in private sector development and entrepreneurship

• Established in 1991. Headquartered in London, the Bank has 34 regional offices

• Owned by 64 countries and 2 intergovernmental institutions (AAA rated)

• Largest single investor in the region (34 countries from Central Europe to Central Asia): €80.9bn in more than 3,679 projects since 1991

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EBRD in Serbia

• Country of operation since 2001

• Total cumulative commitments of € 3.183bn as of April 2013

- Private sector participates with 44% in total cumulative commitments

• Total outstanding portfolio of € 2.346bn, comprised of 124 active operations

• In 2012, invested € 270 million in 20 projects

• In 2013, plan to invest € 300 million in 20 projects or more

• Team of 22 people in Resident Office in Belgrade

• Objectives: To promote a sound investment climate, good corporate governance and

stronger institutions

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Serbia: Commitments by sector

Cumulative commitments € 3,183 M

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Transport Sector

Total Portfolio of € 823M (27%) in 10 projects: roads (€ 378M in 4 projects), railways (€ 412M in 5 projects), and air navigation (€ 33 M in 1 project)

Sovereign guaranteed

Emphasis on regional dimension and key transport routes, primarily Corridor X

Strong focus on policy dialogue & sector reform

Close co-operation with other IFIs (EIB, WB, EU)

Reliance on donor funds to support project preparation & implementation

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Road Sector Projects

Road Recovery Project (2002) – € 76 million to finance a programme of rehabilitation on sections of Corridor X.

Belgrade to Novi Sad Motorway Project (2005) – € 72 million for financing rehabilitation and upgrading of the road from Belgrade to Novi Sad, together with the construction of a new Beska bridge.

Belgrade Highway and Bypass Project (2007) – € 80 million to finance rehabilitation of the highway through the City of Belgrade and construction of section A of the Belgrade Bypass.

K10 (2009) – € 150 million sovereign loan to finance road construction on Corridor X from Nis to Dimitrovgrad.

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Railway Sector Projects

ZTP Reconstruction Project (2001) – € 57 M to finance labour restructuring, track machinery and the refurbishment of electric locomotives.

Rollingstock Project (2006) – € 60 M for the purchase of new freight wagons and a wheel lathe.

EMU Project (2009) – € 100 M for the purchase of Electrical Multiple Units to improve passenger service.

Corridor X Project (2010) – € 100 M for electric locomotives to improve service quality and for track rehabilitation to reduce bottlenecks on the network.

JSCSR Track Rehab (Jan 2012) – € 95 M for track rehabilitation and modernization of key sections along Corridor X including Belgrade-Rakovica-Resnik.

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Primary objectives in the energy sector

Support sector reforms that enable energy sectors to function according to market principles (e.g. increased competition, market liberalization and private ownership)

Strengthen frameworks for regionalisation (trans-border transmission lines, energy trading)

Prioritise environmental, energy efficiency and renewable energy investments

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Investing in Serbia’s power sector - 1

Total Portfolio of € 265 M (14%) in 5 projects

EPS I (2001) - € 39.6 M for the power sector reconstruction and upgrade.

EPS II (2003) - € 60 M for further reconstruction and modernisation of power system.

EPS Smart Metering (2010) - € 40 M for purchase and installation of smart electricity meters (together with € 40 million from EIB)

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Investing in Serbia’s power sector

EPS Kolubara Environmental Improvement Project (2011) - € 80 M to fund the procurement of mining equipment as part of a project to establish a coal quality management system for the Kolubara mining basin.

EPS Small Hydro Power Plants (2011) – € 45 M for the rehabilitation of 15 small hydro power plants, together with the construction of 7 new small hydro power plants on existing dams.

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Future projects

A vital role together with other IFIs in developing transport and energy infrastructure:

Transport Sector – Program of rehabilitation and upgrade of roads in Serbia, to be financed jointly by WB, EIB and EBRD (2013), and further development of railway network on Corridor X.

Energy Sector – Possible financing for major new investments in power generation, renewable energy, regional transmission links, and further support for power distribution modernisation.

Procurement

The EBRD's Procurement Policies and Rules are based on the fundamental principles of non-discrimination, fairness and transparency.

Dedicated in-team Procurement Specialist Unit to support infrastructure procurement and ensure competition.

Published information about procurement opportunities and contract awards: http://www.ebrd.com/pages/workingwithus/procurement.shtml

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Challenges and Opportunities

Challenges:

•Project proposals are not at an adequate stage of project preparation

•Implementation capacity is being fully utilized on existing projects, backlog is emerging

Opportunities:

•Large investment needs in infrastructure sector

•Increased emphasis on energy efficiency and renewables

•Progress on PPPs

•Potential to work with international sponsors on private sector transactions

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EBRD in Serbia: Contact

Mr. Matteo Patrone, Director for Serbia

Belgrade Resident Office

Bulevar Dr Zorana Djindjica 64a

Tel. +381 11 2120 530; +381 2120 710

Fax. +381 11 2120 534

Web page: http://www.ebrd.com/pages/country/serbia.shtml