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EBRD gives financial boost to 110-year-old Sarajevo Brewery
Only two years ago Sarajevo Brewery was the main supplier of water in the besieged town and used what it could to produce beer from scarce resources during wartime. Now, with the help of a DM 8 million (ECU 4.1 million) loan from the European Bank for Reconstruction and Development (EBRD), the company is recapturing its beer market and diversifying into soft drinks and mineral water. With foreign investment still scarce in Bosnia and Herzegovina the EBRD's loan, coupled with a similar loan from the International Finance Corporation (IFC), is the first financing of a successful private company on a commercial basis.
"Developed in close cooperation with the IFC, this is the EBRD's first corporate investment in Bosnia and Herzegovina. As well as demonstrating that private companies from this country are able to attract international financing, it also shows the success of market-led corporate transformation," said Jacques de Larosière, President of the EBRD, at the signing of the loan agreement in Sarajevo. "As a result of this financing, we expect foreign investors to take a closer look at Bosnia and Herzegovina and more local companies to undertake privatisation and restructuring programmes to access international funds and ensure future growth."
Having almost ground to a halt during the war, Sarajevo Brewery had already reached 20 per cent of its pre-war turnover in 1996 and expects to double that in 1997. The company enjoys a strong market presence in the region, having produced beer from the current location under the "Sarajevsko Pivo" brand for over 110 years. It introduced its soft drink and mineral water products in 1996. Sarajevo Brewery has already been successful in securing jobs for 400 employees.
Existing EBRD projects in Bosnia and Herzegovina comprise two infrastructure projects to rebuild the transport network (signed in December 1996) and restore power systems (also being signed today) plus three private sector investments in local banks (Hrvatska Banka signed in May 1997, Market Banka signed in November 1997 and the Microenterprise Bank which opened in November 1997). The EBRD is also investing US$ 5 million in an equity fund to strengthen the supply of equity capital to private small and medium-sized enterprises.
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