Launch of Western Balkans Investment Framework

BRUSSELS, Dec 9נA high-level Western Balkans conference “Overcoming the economic crisis – from regional cooperation to EU membership” was held in Brussels on Wednesday, organized by the Swedish EU Presidency and the European Commission, in cooperation with the Regional Cooperation Council (RCC).
As the successor of the Stability Pact for South Eastern Europe, the RCC fosters regional cooperation and supports European and Euro-Atlantic integration in South East Europe. Its work focuses on six priority areas: economic and social development, infrastructure and energy, justice and home affairs, security cooperation, building human capital, and parliamentary cooperation as an overarching theme.
“The EU enlargement process must continue to be based upon the principle of fulfillment of accession criteria, on one hand, and on full confirmation of the European perspective for all countries of South East Europe, on the other”, said Hido Biscevic, RCC Secretary General.
Since the 2003 European Council of Thessaloniki the countries of the Western Balkans have experienced sustained economic growth and achieved real political and economic reforms as they move closer to the EU. Like other countries around the world they have been severely affected by the economic crisis.
The region benefits from increased economic cooperation with the Union and financial institutions but the main responsibility for addressing current challenges lies with the partners themselves. Regional cooperation has a key role to play in important areas such as energy, transport and trade. This conference aimed to contribute to charting a path towards recovery from the present crisis for the Western Balkans.
The conference focused on the financial and economic situation in South East Europe and discussed the importance of regional cooperation in overcoming the economic crisis.
EU Commissioner Rehn underlined that the EU perspective and improved regional cooperation are essential to help pull the countries of the Western Balkans out of a negative economic spiral of the global economic crisis.
“The regional cooperation should not only be seen in terms of export markets, but also as a chance to combine inputs and know-how from the region in order to succeed on global markets. Therefore, the countries of the region are well advised to accelerate labour and product market reforms, to enhance the quality of public spending and to improve the business climate. Those reforms will improve the attractiveness of the Western Balkans to foreign investors, support the recovery phase and promote growth,” Rehn said
The participants signed a declaration on the establishment of the Western Balkans Investment Framework, to address the region’s investment needs. It consists of two key components: Joint Grant Facility, which will pool grants from the EC budget, international financial institutions (IFIs) and bilateral donors; and Joint Lending Facility, based on the loans provided by IFIs – the European Investment Bank, the European Bank for Reconstruction and Development and the Council of Europe Development Bank.
Swedish Foreign Minister Carl Bildt highlighted the importance of regional cooperation, both in itself and in terms of advancing the European agenda.
The projects are expected to attract 2.2 billion euro ($3.2 billion) of loans from international financial institutions, the lenders said in a joint statement.
The objective of the Western Balkans Investment Framework (WBIF) “is to pool and coordinate different sources of finance and leverage loans with grants for priority projects in the countries of the Western Balkans,” the statement said.
“An initial focus on infrastructure sectors, including social infrastructure, will be expanded to include support to small and medium-sized enterprises (SMEs), energy efficiency and other investment sectors.”
The first meeting of the WBIF steering committee has decided to allocate 26 million euro in grants for technical assistance support to 26 projects across the region in various sectors.
“In turbulent times, the EU’s enlargement process provides an anchor of stability to the countries of the Western Balkans. The EU stands by the region to help it alleviate the impact of the economic crisis. The Western Balkan Investment Framework is a tangible demonstration of this joint effort to support the integration and the economic recovery of the region as it will pool together resources for priority infrastructure projects.” European Commissioner for Enlargement Olli Rehn said in the statement.
EIB Vice President Dario Scannapieco said: “The decisions taken today show the effective commitment of all donors to improve and increase their interventions in the region. This coordination and better pooling of grants and loans has the potential to substantially improve the impact of donors’ aid in the Western Balkans and EIB will continue to strengthen its activities in this framework of cooperation.”
EBRD First Vice-President Varel Freeman said: “The Western Balkans Investment Framework, created jointly by our institutions, is an innovative and efficient tool of pooling financial resources which is aimed at helping beneficiary countries gain more access to finance for priority projects and improving the impact of these investments for the region as a whole.”
Council of Europe Development Bank Governor Raphael Alomar said: “We are strongly committed to investing in social cohesion and stability, in cooperation with our European peers and partners in the Western Balkan region. To date, CEB has helped finance some 10 billion euros worth of projects in Central and South-Eastern European countries. Against the prospect of growing vulnerability, CEB will further strengthen its action to support the public social infrastructure in the region”.
The WBIF consists of a joint grant facility and a joint lending facility to finance priority projects in the Western Balkans, the statement said.
“The joint grant facility will contribute to financing the preparation and implementation of priority projects in Albania, Bosnia Herzegovina, Croatia, Former Yugoslav Republic of Macedonia, Kosovo (under UNSCR 1244), Montenegro and Serbia. Good preparation and a strong implementation framework are essential for projects to receive loan financing and to successfully contribute to economic growth in the Western Balkans in the context of the accession process.”
The European Commission has so far allocated some 110 million euro to support the financing of municipal infrastructure projects and technical assistance projects in the region. The EIB, EBRD and CEB have each pledged 10 million euro for technical assistance or other grant support, in accordance with their respective internal procedures. EU member states and other donors are also invited to make grant contributions via a European Western Balkans Joint Fund co-managed by the EIB and EBRD, which is built around the pre-existing EBRD Western Balkan Fund and benefits from its experience. All these different sources of funding are now pooled together in the Joint Grant Facility, the statement said.
The WBIF creates a single entry point for project submission by beneficiary countries and screening by contributors and financiers. The project selection will ensure consistency with the countries’ needs and will support EU accession priorities.
The joint lending facility will complement the grant facility. The EIB and EBRD have committed themselves to making available 1.0 billion euro in loans. Likewise, CEB is set to enhance its lending to the region for social projects.