investment opportunities in bosnia and herzegovina april 14th, 2009 eldin kajević consul general...

Investment Opportunities in Bosnia and Herzegovina

April 14th, 2009

Eldin KajevićConsul GeneralConsulate General of Bosnia and HerzegovinaIn Chicago

Agenda• General economic indicators

• Top investor countries

• Why invest in Bosnia and Herzegovina

• Attractive Economic Sectors– Energy– Agriculture– Tourism

Small Country, Huge Potential!

Strategic location (closest route from central Europe to

Adriatic)

Population: 4 million, crossroad of three

abrahamic religions

Possibility to export to about 600 mill. people market without customs andduties

GDP growth (5%)

Stable currencywith low inflation and stable

banking sector

Competitively priced and well educated labor force but high unemployment

General Economic Indicators

Value Added Tax: 17%

2004 2005 2006 2007 20082009

GDP (billion EUR) 8.1 8.7 9.8 11.1 12.6 12.2

GDP per capita (EUR) 2,101 2,279 2,562 2,896 3,287 3,187

Real GDP growth rate (%) 6.3 3.9 6.1 6.2 5.7 -3

Annual inflation rate (%) 0.4 3.8 6.1 1.5 7.4 -0.4

Average wages (EUR) 258 275 300 322 385 404

Annual unemployment rate (%) 43.2 43.0 31.0 29.0 23.4 24.1

Currency reserves (mill EUR) 1,779 2,160 2,787 3,425 3,219 3,176

Deposits of household (mill EUR) 1,273 1,629 2,079 2,641 2,6622,895

Top Investor Countries in B&H1994 - 2008 – Total amount 5.3 billion €

487

68

99

114

134

268

294

364

610

626

832

1.446

0 200 400 600 800 1.000 1.200 1.400 1.600

All other Countries

Turkey

USA

Italy

The Netherlands

Russia

Germany

Switzerland

Slovenia

Croatia

Serbia

Austria

Why Invest in B&H?• Up to 90% of investment protected

- Multilateral Investment Guarantee Agency [MIGA] and the Overseas Private Investment Corporation [OPIC]

• Stable financial sector - Foreign ownership at banking sector at 86%. “B2” by

Moody’s Agency, “B+” by S&P, both with stable outlook

• Favourable legislation- National treatment of foreign investors, - Right to freely employ foreign nationals

• $15 billion worth of projects presented at Sarajevo Business Forum April 6-7, 2010 (www.sarajevobusinessforum.com)

Energy Sector Opportunities

Utilization Coefficient 38,8%

1500 Water Flows

Energy Sector Opportunities• The first hydroelectric power plant was built 110 years ago

• High energy demand of the South Eastern Europe, currently at the deficit level of 22TWh provides outstanding market niches for investment opportunities in energy sector

• Enormous potential for investors in hydroelectric plant construction projects on Drina, Neretva, Bosna, Una, Trebisnica and Vrbas rivers

• Development of more than 200 small hydroelectric power plants on smaller rivers

Energy Sector Opportunities• Coal

– The coal reserve is estimated to be over 10 billion ton and the current consumption rate at 8 million per year

• Wind – 30% higher utility coefficient than the EU average and the

highest potential in the Balkan region

• Other renewable sources:– Geo-thermal– Solar– Bio-mass

Agriculture• Europe’s largest livestock producer prior to WWI

• Fertile land, high soil productivity, water, mild climate, cheap labor supply and lower cost

• Half of the land has never been cultivated

• Skilled and affordable labor - employment in agricultural sector forms 21 percent, its share in GDP is 7.4 percent

Tourism • 1984 Winter Olympic Games in Sarajevo

• Crossroad of three Abrahamic religions (Islam, Christianity and Judaism), signs are everywhere across the country, leaving open niches for religious tourism

• Rafting, hiking and extreme sports

• Eco -tourism and thermal springs

• To achieve higher visibility, focus on publicity campaigns and marketing activities

3 Things to Remember!• Small country blessed with

natural resources! 1500 water flows – clean water and clean energy, renewable energy sources

• Up to 90% of investment protected – MIGA and OPIC

• $15 billion worth of projects available for interested investors

Thank you! Hvala!

www.fipa.gov.ba

Consulate General of Bosnia and Herzegovina500 North Michigan, Suite 750

Chicago, IL 60611Ph: 312-951-1245

www.cgbhchicago.com