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Nov 14, 2007 17:33 EEST
SARAJEVO (Bosnia and Herzegovina), November 14 (SeeNews) – The European Bank for Reconstruction and Development (EBRD) said on Wednesday it had lent 1.25 million euro ($1.83 million) to a Bosnian company to help it start greenfield production of wooden pellets.
“The EBRD is providing its first direct loan to a private company in western Bosnia and Herzegovina to help a local entrepreneur finance a new business. The Bank is lending 1.25 million euro to the Herzegovina-based company Sujica Terni to support a greenfield investment for the production of wooden pellets,” the EBRD said in a statement.
The EBRD finance will be used to buy pellet production equipment and set up a factory that will produce two tonnes of pellets per hour.
Initially, the produce will all be exported to Italy, a continuously growing market for such heating products. Wood pellets are a type of wood fuel, generally made from compacted sawdust, whose burning emits comparatively low quantities of CO2, the bank said.
Sujica Terni is a joint venture of a local entrepreneur, a consortium of Italian entrepreneurs and Italian financial institution Simest. The total value of the project is estimated at 2.5 million euro, the EBRD said.
Giulio Moreno, EBRD’s Head of Office in Sarajevo, said this project demonstrates that small, but profitable and well managed companies which show strong commitment to corporate governance can benefit from EBRD financing.
The EBRD is providing the loan under the recently established EBRD-Italy Western Balkans Local Enterprise Facility (WB LEF), which provides individual investments in the range of 1.0 to 4.0 million euro.
WB LEF is contributing to the economic recovery of selected Western Balkan countries - Albania, Bosnia and Herzegovina, Macedonia, Serbia, Montenegro and Kosovo - through the provision of mainly equity and quasi equity financing to small and medium local enterprises, the bank said.
($ = 0.6827 euro)
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