World Bank projects $750 million for BiH from 2016 to 2020

The Board of Executive Directors of the World Bank Group today approved a new Country Partnership Framework (CPF) for the 2016-2020 period to support faster implementation of reforms in Bosnia and Herzegovina. The strategic framework builds on the twenty-year strong partnership between Bosnia and Herzegovina and the World Bank Group, reports the BH News Agency Patria.

The Country Partnership Framework comes at a critical moment for Bosnia and Herzegovina, as the Council of Ministers, the Government of Republika Srpska, and the Government of the Federation of Bosnia and Herzegovina have launched the implementation of the jointly agreed Reform Agenda. Last year, BiH began making progress again towards EU accession, which serves as a natural basis for consolidated support from the international community.

- The consensus on the priorities of the Reform Agenda provides a solid foundation for the implementation of structural reforms - said Ellen Goldstein, World Bank Director for the Western Balkans.

- The World Bank Group's new Country Partnership Framework will include analyses, advice, and financing to accelerate reforms aimed at restoring economic growth.

Through the strategic framework, the World Bank Group will provide support for reforms in three areas: (1) increasing the efficiency and effectiveness of the public sector; (2) creating conditions for accelerated private sector growth; and (3) increasing resilience to natural disasters. A common theme runs through the entire framework – inclusion – which will be taken into account when selecting and preparing specific interventions within the strategy, to ensure that reforms are socially sustainable, and to ensure that vulnerable groups are not left behind as new opportunities emerge.

- The overall goal of this new strategy is to support Bosnia and Herzegovina on the path to achieving higher growth, and to support job creation in the private sector - said Tatiana Proskuryakova, Head of the World Bank Office in Bosnia and Herzegovina and lead author of the CPF.  

- We will work closely with the authorities to create conditions in which the entrepreneurial talents of the country's citizens can be a driver of growth and prosperity.

The framework envisages around $750 million in new loans from the World Bank over the next four years, depending on the scope and progress of reform implementation. Private investors in Bosnia and Herzegovina can also receive financing from the International Finance Corporation (IFC) ranging from $70-120 million, depending on demand and market conditions, as well as guarantees from the Multilateral Investment Guarantee Agency (MIGA).

- IFC will continue to support the private sector through investments and advisory activities to stimulate economic growth and job creation in Bosnia and Herzegovina - said Thomas Lubeck, IFC Regional Head for the Western Balkans.

- IFC will engage in activities to improve the business environment, attract private sector participation in infrastructure projects, and help improve access to finance and resolve non-performing loans.

The new Country Partnership Framework was prepared based on extensive consultations with a wide range of stakeholders at all levels of government and from civil society, academia, the private sector, and the international community. The prepared framework reflects the consensus of all stakeholders on the reform process and common views on the development priorities and challenges facing the country. For long-term growth and improved living standards, Bosnia and Herzegovina must become more competitive and export more products. The reforms supported by this framework contribute to this goal by maintaining a stable macroeconomic environment, reducing the size of the public sector, and providing support for achieving conditions for private sector growth, which will stimulate economic growth, exports, and job creation.

The World Bank's existing portfolio in BiH includes 12 projects worth $576 million; IFC has eight private investments with a total undisbursed portfolio of $69 million; MIGA currently supports six projects with a gross exposure of $285 million.