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EBRD in €1.25 million credit to BiH pellet producer
First direct loan in country supports low carbon heating systems
The EBRD is providing its first direct loan to a private company in Bosnia and Herzegovina to help a local entrepreneur finance a new business producing pellets for low-emission heating systems. The Bank is lending €1.25 million to the Herzegovina-based company Šujica Terni to support a greenfield investment for the production of wooden pellets.
The EBRD finance will be used to purchase pellets production equipment and set up a factory for the production of two tonnes of pellets per hour. Initially, the pellets will be fully exported to Italy, a growing market for such heating products.
Wood pellets are a type of wood fuel generally made from compacted sawdust. Pellet heating systems provide a low-net-CO2 solution, because the quantity of CO2 emitted during combustion is equal to the CO2 absorbed by the tree during its growth.
Šujica Terni is a joint venture involving a local entrepreneur, an Italian consortium and the Italian financial institution, Simest. The total value of the project is estimated at €2.5 million.
Giulio Moreno, EBRD Head of Office in Sarajevo, said this project demonstrates that even small, but profitable and well managed companies which show strong commitment to corporate governance can still benefit from EBRD financing.
The EBRD is providing the loan under the recently established EBRD-Italy Western Balkans Local Enterprise Facility (WB LEF) which provides individual investments in the range of €1-4 million.
WB LEF is an investment facility established by the EBRD with financial contributions and support from the Italian government. WB LEF is contributing to the economic recovery of selected Western Balkan countries (Albania, Bosnia and Herzegovina, FYR Macedonia, Serbia, Montenegro and Kosovo) through the provision of mainly equity and quasi equity financing to small and medium local enterprises.
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