Some 11 countries have agreed to provide a total €10mn in donor funds towards a new EBRD-driven initiative to boost private business investment and infrastructure development in the western Balkan countries – Albania, Bosnia and Herzegovina, FYR Macedonia, and Serbia and Montenegro, including Kosovo.

The Western Balkans Multi-Donor Fund will enable the EBRD to use donor funds to identify and prepare key projects that are vital to economic growth and regional cooperation.

Across a range of sectors, the fund will aim at narrowing the transition gap that has emerged between the western Balkans and neighbouring countries. The donor countries committed to supporting this initiative are Austria, Canada, Finland, Ireland, Luxembourg, Netherlands, Norway, Slovenia, Spain, Sweden, and UK. Other countries are expected to join soon, increasing the fund’s capital.

EBRD president, Jean Lemierre, speaking at a donor conference just ahead of the bank’s recent annual meeting in London, said key priorities in this region are growth in private sector investment and employment, and improved access to basic services such as clean water, reliable energy and transport. “We are very grateful to the donor countries in supporting this initiative, because their finance acts as a catalyst for the EBRD’s investments, which benefit the people of the region,” he said. “The bank has a pipeline of around €800mn of new investments under consideration over the next two years for the western Balkans.”

The fund builds on a similar EBRD initiative – the Early Transition Countries initiative – established in 2004 to encourage economic growth through private sector development in some of the bank’s least developed countries, mainly in the Caucasus and central Asia. To date donor funds alone have helped generate nearly 100 EBRD projects under this ETC programme.

Gerrit Zalm, minister of finance for the Netherlands, and chairman of the EBRD board of governors, says the benefits of combining donor financing with EBRD projects have been witnessed across the bank’s countries of operations, and play an important role in promoting development and reducing poverty.

“By marrying donor financing with EBRD expertise, we hope to help the western Balkan countries develop further. This is why The Netherlands was amongst the very first countries to commit grant resources to the fund,” he adds.

Leander Treppel, representative of the federal ministry of finance of Austria, which chairs the EU seat, says the new initiative for the western Balkans will benefit the peoples of the region, and is receiving full support from Austria under its presidency of the European Union.