Another form of European financing available to the Western Balkans

As part of the Western Balkans Conference organized by the Swedish Presidency of the European Union, the ‘Framework for Investment in the Western Balkans’ (WBIF) was signed. This is a new financing instrument primarily for infrastructure projects in the Western Balkans, conceived as a form of public-private partnership between the European Commission and several international financial institutions.

The ceremonial signing was attended by Carl Bildt, the Swedish Minister for Foreign Affairs, Olli Rehn, Commissioner for Enlargement, Dario Scannapieco, Vice President of the European Investment Bank, Varel Freeman, First Vice President of the European Bank for Reconstruction and Development, and Raphael Alomar, Governor of the Council of Europe Development Bank.

Considering the effects of the global crisis on the region, as well as its inherent economic potential, the European Union, in cooperation with the aforementioned banks, has developed a new financing program aimed at building infrastructure, increasing foreign direct investments, and strengthening the administrative capacities of the Western Balkan countries. The two goals of the Framework are to group grants, loans, and expertise for financing priority investment projects and to enhance the coherence and synergy of donor support to improve the positive impact and visibility of these priorities in the beneficiary countries.

For its part, the Commission has approximately 100 million euros available, while three European banks will jointly contribute a total of 30 million euros to the Joint Fund for the Western Balkans. However, the Framework is not designed as a closed system, meaning that EU member states (Sweden has already committed two million) and other banks will also participate in financing projects. The group of project financiers will be one of two key bodies that will assess and monitor requests and forward them for approval to the Steering Committee.

In the last two years, approved loans and grants to the region amounted to around 3 billion euros, with Serbia and Croatia benefiting the most, at 29% and 24% respectively, and the funds were most often directed towards transport and utility infrastructure. Projects are selected based on the needs of the region or country and in accordance with EU priorities, primarily in the areas of ecology, transport infrastructure, health, and education, but may also include small and medium-sized enterprises and the financial sector.

After the signing, Bildt emphasized Sweden’s and the Union’s commitment to further enlargement, which this project, prepared for a year, contributes to, and urged beneficiary countries to utilize this instrument, while Rehn added that infrastructure is a prerequisite for socio-economic development and called this a significant achievement, especially considering the global crisis.   (Vanja Figenwald)