'We have led the way on investment in the Western Balkans'

EBRD President calls on investors to boost Western Balkans’ economic potential

Prime Ministers, Lord Maude, Government Members, representatives of the business world, ladies and gentlemen - welcome to the EBRD!

It gives me great pleasure to open the second Western Balkans Summit here at our headquarters.

Special thanks to the newly elected Prime Minister of Croatia for taking part and his country’s continuing support for its neighbouring region.

Some of you were here for the historic Summit in this same format, which took place in this same auditorium - with all regional Prime Ministers present - two years ago.

Back then I promised the Prime Ministers that that first summit would not be a one-off. 

That we would reconvene here in London in two years’ time.

Well, here we are again.

The last two years

Now is a good time to take stock of what we have achieved in the last two years. 

The 2014 Summit effectively launched the “Western Balkans Six” process at the level of Prime Ministers.

That then benefited from the strongest possible boost at the Western Balkans Summit in a similar format hosted by Chancellor Merkel in Berlin in August 2014.

Followed by the Summit hosted by Chancellor Faymann in Vienna last August.

We look forward to the process receiving even more momentum in Paris this summer.

Regional cooperation in this new format is now a tangible reality.

And that sends a strong message to the rest of the world: that this region has reached new heights of maturity and stability.

Indeed, I would argue that such intensifying cooperation is one of the region’s greatest achievements of recent times.

And it is especially important given the memories of its turbulent past.

Such cooperation is also a testament to the vision of its leaders.

So we should also listen carefully to the Prime Ministers when they present their countries’ priorities for regional projects. 

I have every confidence that convergence will be a major theme of their plans.

Progress in coordination between the Western Balkans countries has been matched by better cooperation with and between international donors, the European Commission and the international financial institutions.  EBRD has been central to that improved cooperation.

The result is a visible strengthening of the way we pool resources in support of regional projects, first of all under the Western Balkans Investment Framework.

Under the leadership of the European Commission, better coordination has allowed a number of important regional transport and energy projects to be prioritised.

You will hear more about the connectivity agenda for the Western Balkans during today’s discussions at the Panels. 

The EBRD has done its bit by delivering several cross-border infrastructure projects that will increase the free flow of commerce, competitiveness and opportunities for export growth.

Among those projects signed by EBRD recently was the rehabilitation of the Route 10 Railway, the upgrading of the line which runs through Kosovo and connects with Macedonia - a project we worked on closely with the EIB.

Together with KfW, we also approved and signed funding for the Macedonian-Albanian electricity transmission line, part of wider efforts to establish an East-West electricity corridor connecting Sofia, Skopje, Tirana, Podgorica and Italy.

Today, on the margins of this Summit, we will sign a grant agreement with the European Commission and a separate agreement with Macedonia’s electricity transmission company on this project.

We are looking into opportunities to finance power interconnectors between other countries in the region, such as Montenegro, Bosnia and Herzegovina and Serbia.

We are working, together with the EIB, on the feasibility study for the Highway Nis-Pristina-Durres – or, as Prime Minister Vucic calls it – the “Peace Highway”.

We have also agreed to be the lead international financial institution for another critical regional transport route: the Adriatic Highway.

You will hear about both of these major projects more during today’s discussions.

But there is more to regional integration than physical infrastructure alone.

Today, in this very room, we will be launching the “SEE Link” – the regional electronic platform bringing together South Eastern Europe stock exchanges.

This is a truly innovative project launched by the Sofia, Skopje and Zagreb stock exchanges, with our support and the goal of creating regional infrastructure for the trading of securities.

The project is expanding and will today be joined by the Serbian and Slovenian stock exchanges.

Looking ahead

Ladies and gentlemen, the region’s great potential for investment is there for all to see.

It enjoys a stable macroeconomic climate, favourable tax regime, competitive labour force, and the clear prospect of integration into the European Union, itself a key stabilising factor and a significant influence promoting reforms.

The region’s people are well educated, highly skilled and many of them are talented entrepreneurs.

I’ve noticed that myself on my numerous visits as EBRD President to all countries of the Western Balkans.

We are encouraged by the fact that all of the region’s economies grew last year.

And our economists expect growth to rise further in most Western Balkans countries in 2016, albeit still at levels below their potential.

We are ourselves one of the largest institutional investors in the region.

As such, we see many ways of doing an even better job of helping the region to realise its potential.   

For now the biggest obstacle to doing so is the financing gap.

Even the Western Balkans Investment Framework, the most effective tool for pooling resources that we have at our disposal, cannot today fill that gap.

We need, in the best interests of the Western Balkans, to engage with the growing number of Chinese and other non-European investors in the region, as well as with new development banks.

One of the most important events for the EBRD so far this year has been the formal admission of our latest shareholder: China.

So I am particularly heartened to hear that we have representatives of some major Chinese companies in the audience with us today.  

Critically, we also need to combine our funding with private investment sources. 

So we have been working with other international financial institutions and the European Commission to develop ways of doing exactly that, not least for major regional infrastructure projects.

Together with the private sector, we have to address such challenges as budget constraints, value for money concerns and the perceptions of high risk.   

We must make some progress on those fronts today. 

And some of you may have a chance to discuss them further at a conference called “Supporting local enterprises and SMEs along China’s Belt and Road Initiative in South Eastern Europe,” organised jointly with our long-standing partner and that pioneer of regional cooperation, the Central European Initiative, in Trieste in May.

We are doing everything we can to unlock more investment in the region.

But investment on its own is not the whole story.  There is a reform momentum across the region - from Montenegro advancing in EU approximation, to Serbia implementing ambitious programme of ‎ privatisation and restructuring of its public companies, to Albania continuing comprehensive programme of modernisation, to Bosnia and Herzegovina which has started implementing the Reform Agenda prepared with the help of EC and IFIs.

But we can attract much more of investment  – and when we do, it will be that much more effective – if, at the same time, we can also advance the cause of structural reforms.

We are stepping up our efforts on policy engagement throughout the EBRD regions. Such reforms represent one of the most reliable ways of reenergising growth and transition.

And the Western Balkans is very much a priority in this regard.

We offer country-specific policy support to our Western Balkans partners. Only last year we helped set up an Investors Council in Albania with a view to facilitating dialogue between the business community and the government and improving the business climate.

We also signed a Memorandum of Understanding on cooperation in governance and the business environment with the Government of Serbia.

Of course, some policy dialogue initiatives will only succeed if pursued across the region as a whole.

So we are working to enhance efficiency and transparency by expanding the Western Balkans Regional Business Registry Portal.

Sum up

Ladies and gentlemen, later this spring we at the EBRD will celebrate 25 years of investing in changing lives.

Western Balkans countries have been part of the EBRD’s success story almost since it began.

Some joined us earlier, some later in our history.

But whenever they joined the EBRD family, our record provides vivid proof of our belief in this region.

We have led the way on investment in the Western Balkans and are determined to continue – and to help create the climate and conditions whereby we and others can commit still more.

Today’s forum is another opportunity for us, together, to showcase the region’s many strengths – and to invite investors the world over to join us in realising its potential.

Thank you very much.

Full video coverage of the Summit is available on demand on the EBRD YouTube channel. For updates, follow us on Twitter @EBRD #EBRDwb.

Summit video coverage