The EBRD in Serbia

Date 18 March 2013

List of contents:

•EBRD’s activities

•EBRD in Serbia

•EBRD and Financial Institutions in Serbia

•Other financing instruments

•Small Business Support Programme

What is the EBRD?

• AAA rated international financial institution,

promotes transition to market economies in

34 countries from central Europe to central

Asia

• In 2011, the Bank expanded its operations to

include Egypt, Morocco, Tunisia, and

Jordan (Southern and Eastern

Mediterranean – SEMED region)

• Owned by 63 countries and two inter-

governmental institutions

• Capital base of €30 billion

0

10

20

30

40

50

60

70

80

90

'00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 '11 '12

€B

illio

nCumulative commitments of €79.5bn

EBRD finances diverse range of enterprises

Where we operate

EBRD Product Flexibility tailored to project needs

Senior, subordinated, convertible

LT (up to 10y or more) or

ST revolving

Floating/ Fixed rates

Choice of currencies (€, US$,

RUB etc.)

Loans

Common stock or preferred

Minority position only (up to 35%)

Mezzanine

Other

– guarantees

– currency swaps

Equity

List of contents:

•EBRD’s activities

•EBRD in Serbia

•EBRD and Financial Institutions in Serbia

•Other financing instruments

•Small Business Support Programme

EBRD in Serbia

• Country of operation since 2001

• Total cumulative commitments of € 3,18bn as of February 2013

- Private sector participates with 50% in total cumulative

commitments

• Total outstanding portfolio of € 2.36bn, comprised of 124 active

operations

• Team of 23 people in Resident Office in Belgrade

• Objectives: To promote a sound investment climate, good

corporate governance and stronger institutions

Serbia: Cumulative Commitments

Composition (€ m)

1,151 36%

887 28%

692 21.8%

451 14.2%

Infrastructure

Financial Institutions

Industry, Commerce and Agribusiness

Power and Energy

Serbia: Total Cumulative Commitments

Composition (No. of operations)

78

47%

22

13%

10

6%

57

34%

Investment instruments in Serbia

• Bank’s balance sheet

• Special programmes: - Local Enterprise Facility - LEF (for equity and quasi equity investments

of up to EUR 10 million)

- WeBSEDFF - Western Balkans Sustainable Energy Direct Financing

Facility (for investments in projects of renewable energy and energy

efficiency)

- TFP (Trade Facilitation Programme)

- SBS – Small Business Support Programme (technical assistance for

turnaround management companies)

• Syndication with other banks and co-investment with PE

funds or strategic investors

Bank’s major projects in Serbia

Public Sector:

Infrastructure € 1151M - Municipal Infrastructure Reconstruction Programme (Belgrade, Subotica,

Nis, Novi Sad, Kragujevac)

- Road Recovery and Belgrade to Novi Sad Motorway Project

- Belgrade Highway and Bypass Project

- Serbian Railways: Reconstruction and Rollingstock Projects

- Sava River Crossing

- Future Air Traffic Management Modernization & Upgrading System

- JSC Serbian Railways

- Serbia Railways EMUs

- K10

Power and Energy € 451M

- Electric power industry of Serbia (EPS)

- Srbijagas

- EPS Kolubara Environmental Improvement

- EPS Hydropower Plants

Bank’s major projects in Serbia

Private Sector:

Financial Institutions - € 887M

Komercijalna Banka, Raiffeisenbank, Societe Generale Bank, Procredit Bank, Volksbank, Metals Banka, Cacanska Banka, UniCredit Bank, Opportunity Banka, Privredna Banka Beograd, Banca Intesa, Unicredit Leasing, Societe Generale, Erste Bank

Industry, Commerce & Agribusiness- € 692M

Hemofarm, GTC Belgrade, Ball Packaging, Soko Stark, Nectar, Victoria Group, Frikom, SBB, Sevojno, Grand, Somboled, Mladost Sid, JKR Resource, IDEA, Forma Ideale, Galeb, MK Group, Orion, Alas holding, Nissal, Beohemija

List of contents:

•EBRD’s activities

•EBRD in Serbia

•EBRD and Financial Institutions in Serbia

•Other financing instruments

•Small Business Support Programme

Funding Financial Institutions

The key objectives of the EBRD’s role in the financial sector are to:

• Stimulate lending to the real economy

• Complete the crisis response activities and stimulate lending to the real

economy

• Help develop local capital markets and both funding and lending in local

currency

• Promote better governance, sustainable business models and improved risk

management of banks and non-bank institutions

• Support consolidation, privatisation and re-privatisation of the banking sector

• Support development of new regulatory frameworks in close coordination with

other IFIs, including in the area of cross-border regulation

Financial Institutions Portfolio in Serbia

A total of € 628 million

SME Financing Provided Through Credit

Lines to Local Banks

• Improve access to longer term finance for private enterprises for

urgent capital investments, as well as working capital

• Facilitate upgrades of SME operations towards EU production

standards

• Promote sustainability and competitiveness of the SME sector

through crisis and beyond

• Capacity building at the level of participating banks to assess and

finance environmental investments

Western Balkan Sustainable Energy

Financing Facility (WeBSEFF)

• In 2008, the EU and the EBRD established WeBSEFF, which has as its

objective the achievement of savings in energy consumption and reduction

of CO2 emissions

• WEBSEFF is fully committed to partner banks and the banks have already

on-lent EUR 36 million to 73 projects in the private sector

• In Serbia, the WeBSEFF investments amount to €32 million in support of 33

projects

• Under the new WeBSEFF II the scope of eligible project expanded to

include energy efficiency and small renewable energy projects in the

municipal/public sector

• Donor funded technical assistance from specialised consultants to Sub-

borrowers and Participating Banks

• Payment of investment incentives to end-borrowers from private and

municipal/public sector upon verification of successful project

implementation, based on the level of expected CO2 savings

Equity Financing For Local Banks

• Participation on supervisory boards allows the Bank to enhance corporate

governance

• Promote the development of institutional skills

• Work with management and shareholders to realise the banks’ potential

Equity participation enables the EBRD to play a key role in the

development of partner banks:

Total EBRD’s equity portfolio has investments in 52 universal banks and 9

microfinance banks across 26 countries for over €1.4 billion

Currently the EBRD’s equity portfolio in Serbia has investments in 3 banks

for €145 million

20

Trade Facilitation Programme (TFP)

for importers and exporters

If you sell to, or buy from, any of the EBRD's countries of operations, TFP can help you

secure payment or performance from your clients or suppliers;

The EBRD guarantees payment under trade finance instruments issued or

guaranteed by local issuing banks to international confirming banks.

Trade finance instruments include letters of credit, payment and other types of

guarantees, bills of exchange or promissory notes, performance bonds and bid bonds.

The EBRD takes the commercial and political risk of non-payment by issuing banks.

Issuing banks take the risk of local companies. The final beneficiaries of the

programme are importers and exporters.

To benefit from the EBRD’s Trade Facilitation programme, please:

– Confirm your issuing bank is one of the TFP participants

– Discuss the transaction with a confirming bank of your choice;

– Ensure that the goods you are importing or exporting are not on the EBRD Exclusion list or

Environmental Exclusion list.

List of contents:

•EBRD’s activities

•EBRD in Serbia

•EBRD and Financial Institutions in Serbia

•Other financing instruments

•Small Business Support Programme

LEF Snapshot

• €400m of capital provided jointly by the EBRD (€380m) and the

Italian government (€20m)

• Total cumulative commitment of €252.8m in 103 projects up to date

Total Project Composition

(No. of Deals)

Number of LEF Deals in 2006-2012 Period

LEF Investment Criteria

• Eligible investments: expansion, restructuring or acquisitions of

existing private businesses

• Eligible sectors: a wide range of sectors, with only few exceptions

(weapons, liquors and tobacco). All investments must be in line with

sound environmental principles

• Size of investments: LEF individual investment could amount up to

€10m. Minimal individual investment is €1m

• Target Stake: Minority stake, preferably in the range of 20% to 35%

of the capital of the company

• Time horizon: a period from 3 up to 8 years

24

Western Balkan Sustainable Energy Direct

Financing Facility- WeBSEDFF

• EUR 50 million credit facility supporting green-field investment in Renewable energy projects up to 10MW installed power as well as industrial energy efficiency projects. Review of projects performed by a technical consultants financed by EBRD.

• Investment parameters:

Loan amounts between EUR 2 million and EUR 6 million;

Maturity up to 8 years for industrial energy efficiency projects and up to 12 years for renewable energy projects; grace period of up to 2 years

Commercial interest rates depending on the risk of the project;

• Subsidy element financed by the EU grant money: write off of up to 10% of loan principal upon successful project completion (subject to verification by a technical consultant).

25

Western Balkan Sustainable Energy Direct

Financing Facility - WeBSEDFF

• Eligibility criteria:

• Locally incorporated SMEs;

• Ability to put sufficient amount of start up capital in green-field Renewable Energy projects; (minimum 40%)

• Sufficient creditworthiness for companies carrying out energy efficiency projects;

• Acceptable technology (list available) + minimum utilization rate must be achieved;

List of contents:

•EBRD’s activities

•EBRD in Serbia

•EBRD and Financial Institutions in Serbia

•Other financing instruments

•Small Business Support Programme

27

EBRD Small Business Support Team

Enterprise Growth Programme

• Enterprise Growth Programme (EGP, formally known as TAM) is a donor funded programme operated by EBRD;

• Brings industry specific management expertise directly to individual SMEs usually up to 500 employees (project duration 12-18 months);

• Assists enterprises to increase competitiveness and develop new business skills at the senior management level;

• Mentoring/coaching support provided by Senior Industrial Advisors with relevant sector experience as senior executive;

• Cost sharing mechanism to ensure commitment – at least 10% for the 1st project and 50% for a follow up .

Enterprise Growth Programme (EGP) formally known as TAM in Serbia:

• TAM Serbia active since 2001 with €9.51 million of donor funding from the EU and bilateral donors;

• 184 projects initiated (average size 55000 Euro) / 9 ongoing projects;

• Areas of assistance: strategy development/long-term plans, financial management, organization restructuring, new markets, energy efficiency and foreign partners match-making.

• Impact: on average, assisted enterprises reported 67% increase in turnover, 57% increase in productivity and 48% increase in pre-tax profit.

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• BAS (Business Advisory Services) is a donor funded programme operated by EBRD and has carried out

more than 11,350 projects with small enterprises in the countries of EBRD operation;

• Works with SMEs to address their concrete development needs and improve their competitiveness by

involving local business consultants;

• Supports broad range of projects (enterprise restructuring and improvement of management organisation,

feasibility and engineering studies, development of marketing and export strategies);

• Grants range 25-75% of the total net project cost to a maximum of € 10,000

• In Serbia since 2006 BAS has supported 275 projects of direct assistance to local companies utilizing €3

million (average grant in Serbia €5300)

• In the next period focus will be on projects aimed to improvement of EE, environment protection and

enhancing export capacities.

EBRD - BAS

Contact Information

European Bank for Reconstruction and Development

Bulevar Zorana Djindjica 64a

11070 Novi Beograd

Serbia

Tel: +381 11 21 20 530

Fax: +381 11 212 0534