Bosnian exports rebounding

For the first time since they started dropping in January 2009 (yoy), exports have rebounded and grown for two consecutive months in January and February.

Jan-Feb exports were up 17% (yoy), but they are still 9% below where they were during the same months in 2008. By industrial groupings, export growth was strongest in the energy sector (33%), intermediate goods (32%) and durable consumer goods (22%). On the other hand, exports of capital and non-durable consumer goods were down 16% and 2% respectively. Export growth is observed across all traditional BH industries: electric power, steel, aluminum, furniture, as well as primary agricultural products.

Imports continued dropping, reflecting tight credit and indicating still weak investment. Jan-Feb imports dropped 6% (yoy) and they were 28% lower than during the same months in 2008.

Sarajevo Waste Water Project gets funding

The World Bank’s Board of Executive Directors today approved Sarajevo Waste Water Project.

The objective of the Sarajevo Waste Water Project for Bosnia and Herzegovina is to improve the living conditions of populations in the areas covered by the Sarajevo Water and Waste Water Company and in downstream riverside communities by: (a) reducing the populations' exposure to, and reliance on highly polluted water from the Miljacka and Bosna rivers; and (b) improving the efficiency of the waste water collection network in the Sarajevo Canton. There are three components to the project. Component A is high priority infrastructure rehabilitation. This component will finance priority investments for rehabilitation of waste water infrastructure in the Sarajevo Canton. Component B is the institutional development support. This component will finance technical assistance (TA) to the Sarajevo Water and Waste Water Company (VIK) for capacity building and institutional strengthening. Component C is the project management. This component will support project implementation by the Project Management Team (PMT) and Project Implementing Team (PIT).

IBRD Loan: US$35 million

Terms: Maturity = 25 years; Grace Period = 5 years

Project ID: P090675


€25 million investment in Sarajevo International Airport upgrade to meet growing traffic

The EBRD is supporting the modernisation of Sarajevo International Airport with a €25 million loan to expand the airport's infrastructure and help it address capacity constraints. The loan is extended directly to Sarajevo International Airport and is guaranteed by the state of Bosnia and Herzegovina.

Sarajevo International Airport is the main gateway to Bosnia and Herzegovina, handling the majority of the international traffic flow. In recent years passenger traffic at the airport has increased significantly and continues to grow.

The EBRD loan will be used to finance the expansion of the passenger terminal, to build a new rapid runway and to expand the aircraft parking apron. The project will add close to 7,000 square meters to the current area of the passenger terminal of 10,000 square meters.

The expansion is supported by grant financing from the Dutch government, the Western Balkans Fund and EBRD Shareholder Special Fund of nearly €1 million. The grants will be used for tasks including preparation of the final design of the expanded passenger terminal and updating the corporate plan outlining the airport's future strategy.

The project will support greater commercialisation of the airport's activities and will facilitate implementation of the EU's Single European Sky initiative in Bosnia and Herzegovina, which involves gradual liberalisation of air traffic.

"We are pleased to support the expansion of the main airport in Bosnia and Herzegovina at a time when investment sources remain scarce. The upgrade of Sarajevo International Airport will improve the quality of air traffic movement stimulating further growth in passenger flow," said Sue Barrett, Director of the EBRD Transport Team.

Dragan Vrankic, Minister of Finance and Treasury of Bosnia and Herzegovina, added: "I am glad that this project relies primarily on the creditworthiness of the company for repayment of the loan. The project will also help us to test the new legal structure for financing of public utilities whereby, through direct loan agreement with international financial institutions, the utilities assume much more accountability and responsibility for all aspects of project implementation."

"This project is a result of the long-standing co-operation between the EBRD and Sarajevo International Airport. In addition to solving the airport's needs in light of the future growth, the expanded terminal building will provide much higher quality of services to the passengers, while improving the image of the country by offering it a modern gateway", said Bakir Karahasanovic, General Manager of Sarajevo International Airport.

Since the beginning of its activities in Bosnia and Herzegovina, the EBRD has committed over €1 billion to the country's economy, of which over a third has been in the infrastructure sector.