KfW activities in Bosnia and Herzegovina

Donor Coordination ForumSarajevo, March 2012Stephan Leudesdorff; Director KfW office Bosnia and Herzegovina

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KfW BankengruppeFinancing with a Public Mission

o Promotional Bank of the Federal Republic of Germany

o Founded 1948 as Kreditanstalt für Wiederaufbau

o Shareholders: 80% Federal Republic, 20% Federal States

o Headquarters: Frankfurt am Main,Branches: Berlin and Bonn

o Representative offices: about 60 offices and representatives worldwide

o Balance sheet total at end 2010: EUR 442 billion

o 4,530 employees (2010)o Rating: AAA/Aaa/AAA

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A Bank with a wide array of functions

Domestic promotional activities

Promotion ofhousing, education,infrastructure and

social development

Promotion of SMEs,entrepreneurs,

environmental and climate protectionbusiness start-ups

Financing of municipal

infrastructure projects and promotion in

Europe

Promotion ofdeveloping and

transition countries

Internationalproject and

export finance

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Focal areas in Bosnia and Herzegovina

I Financial Sector● Strengthening of the trust in the reliability of financial markets ● Provide medium to long-term funding for micro, small and medium sized

enterprises in urban and rural areas ● Support to the market consolidation of the micro finance sector● Promotion of energy efficiency

II Energy Sector● Promotion of renewable energy● Promotion of energy efficiency

III Municipal infrastructure● Sustainable solutions for water supply problems ● Advancements in the field of waste water collection and treatment

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Financing sources for Bosnia and Herzegovina

I Contributions of the German Funds for Financial Cooperation (ODA):● Bilateral contributions of the German Government (grants, soft loans)● International funds of the German Government ● KfW´s own funds

II Additional sources of financing:● European Commission (IPA funds)● Other donors (e.g. Swiss Government, Danish Government)● Funds of the Bosnian Government

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KfW development bank in Bosnia and HerzegovinaCommitment of funds in the sectors

*Loans signed only; third party funds not included**For the financial sector only active loans included

Commitment of funds in the sectors (accumulated)

0

20

40

60

80

100

120

140

160

180

2007 2008 2009 2010 2011

in M

io. E

UR Water/ waste water

Energy

Financial sector**

Financial Sector

I Objectives:● Strengthening of the intermediaries for the promotion of economic development in Bosnia and Herzegovina

II Funds:● Guarantees and credit lines for local commercial banks and microfinance institutions● Providing TA to the partner institutions

Overview of KfW‘s contribution to the financial sector in Bosnia and Herzegovina

I EFBH (European Fund for Bosnia and Herzegovina)● Virtual fund funded by various sources (e.g. Danish Government, BiH Government)

Mother of all refinancing funds in Balkan● Contributed amount: €19 million

II Credit Guarantee Fund (CGF)● Guarantee liabilities amounting to € 5.2 million

III Energy efficiency credit line● Contributed amount: €12 million

Energy Sector

I Objective:● Rehabilitation & construction of power generation facilities with the objective of ensuring reliable, affordable and sustainable energy supply

II Funds:● Development loans for wind parks & HPPs● Grant funds for the preparation of studies for the construction of new generation facilities● TA

KfW’s energy projects in Bosnia and Herzegovina

I Rehabilitation of Hydro Power Plants (HPP)● HPP Trebinje (3x57 MW), phase 1 (€2 m) ● HPP Trebinje (3x57 MW), phase 2 (€5 m)● HPP Rama (2x80 MW) (€17 m)

II New Hydro Power Plants● Run-of-river HPP Cijevna III (13 MW) on river Bosna (€ 50 m loan plus € 5 m IPA

funds)● Pump storage power Plant Vrilo under preparation ( 64 MW) (up to € 100 m loan)● Run-of river HPP Janjici (app. 12 MW) on river Bosnia; FS under preparation (up to €

50 m loan)

III Energy Efficiency● Distribution SCADA system (€17 m)

KfW’s energy projects in Bosnia and Herzegovina

IV Wind parks● Establishment of first wind atlas for BiH in 2009● Wind park Mesihovina (close to Tomislavgrad) (44 MW), € 71 m loan, € 1m grant

(TA)● Under preparation: Wind park south part of RS, up to € 50 Mio loan

Municipal infrastructure: Water & wastewater

I Objectives:● Enabling financially and ecologically sustainable supply of potable water as well as wastewater collection and treatment ● Improving living standard of citizens ● Protecting natural resources

II Funds:● Development loans and grants for the municipalities● Support in the area of structural changes (accomp. measures) ● Grants for the development of feasibility studies● Harmonization of the activities with local and external donor agencies

Joint preparations and co-financing projects with EC and other donors, in particular Swiss and Austrian Government

KfW’s water projects in Bosnia and Herzegovina

I. Kakanj● Rehabilitation of urban water supply, € 4.3 m; project completed

II. Program „Rehabilitation of Urban Water Supply and Sewerage Systems BiH I)● Participating municipalities: Kakanj, Bihac, Derventa and Kostajnica; € 14 m; project

completed

III. Bihac● Waste water treatment plant, € 17.5 m

IV. Banja Luka● Urban water supply and sewage systems; € 14m plus € 4.5 m EU contribution

V. Program „Rehabilitation of Urban Water Supply and Sewerage Systems BiH II“● Under preparation; participating municipalities: Tuzla, Zenica, Travnik; up to € 19.5 m

plus a contribution from the Swiss government

Thank you for your attention!

Stephan LeudesdorffDirector KfW Office in Bosnia and HerzegovinaPhone: + 387 33 590 409Mailto: stephan.leudesdorff@kfw.de