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EBRD files suit to recover investment in Kosovo
The EBRD recently began legal proceedings against Medita, a kitchen assembly
plant in Kosovo, to recover funds relating to a €500,000 investment made by
the Kosovo Reconstruction Equity Fund.
The fund, known as KREF, was set up by the Bank and the Italian government in
2000 to promote entrepreneurship and to help kick-start private-sector growth
in Kosovo shortly after the war ended.
The EBRD has filed suit in the Pristina municipal court and considers this a
test case for the local judiciary system. The Bank is a firm believer that
creditors’ rights are crucial to the establishment of a strong investment
climate.
The EBRD was among the first international financial institutions to invest in
Kosovo’s private sector. KREF invested in several local enterprises at a time
when bank financing was either not available or lending was extremely
expensive. The Bank played – and continues to play – an important role in
helping to develop the Kosovar economy. Having recently signed a memorandum
with the United Nations Mission in Kosovo, the EBRD intends to increase its
business in the province.
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