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