The Italian Ministry of Economy and Finance is providing €10.5mn to the European Bank for Reconstruction and Development (EBRD) to set up a risk-sharing facility, the first of its kind for Italy, to finance, alongside the bank, commercially viable private-sector projects across Serbia and Montenegro. This includes €2mn towards the Italian Technical Cooperation Fund established in 1992 to support, amongst other things, advisory services and training to help implement the facility.
The investment facility is a sub-account of the Italian Investment Special Fund (IISF), a fund established by the EBRD in 1998 with financial support from Italy to accelerate the modernisation, restructuring, expansion and development of small and medium-sized enterprises in central and eastern Europe.
Lorenzo Bini Smaghi, head of international financial relations at the Italian Ministry of the Economy and Finance and alternate governor for Italy at the EBRD, says that supporting the development of Serbia and Montenegro’s private sector is very important for the economy and the people of those countries. “The republics have come a long way since the conflict ended four years ago,” says Bini Smaghi. “But many challenges and obstacles still remain, and the international community must do more to help develop the private sector still further, as a key part in the country’s development.”
The sub-account is the fourth to which Italy has contributed under the IISF, including US$10mn to the Albanian Reconstruction Equity Fund in 1998, €2mn to the Kosovo Reconstruction Equity Fund and US$7.5mn to the SME Framework Facility for Bosnia and Herzegovina, both in 1999, all successfully supporting with success the development of SMEs.
Fabrizio Saccomanni, vice-president at the EBRD responsible for official cofinancing operations, says the funds provided by Italy are crucial in enabling the bank to help develop businesses in the region that promote the transition towards a market economy.