First Donors' Conference for Kosovo
Brussels, July 28, 1999

1. In its capacity as the EU’s financing institution, the European Investment Bank (EIB) expects to play a significant role in the reconstruction and development of south-eastern Europe and Kosovo in particular. The EIB has built up considerable technical and economic expertise in the region since it began financing infrastructure in Yugoslavia in the 1970s. We are now supporting projects in all countries in the region (i.e. including neighbouring countries) except Croatia and (of course) Yugoslavia itself.

2. The EIB has set up a special Task Force, which has already carried out its first mission on the ground in Kosovo as well as in neighbouring Albania and Macedonia. At a meeting between the President of the EIB, Sir Brian Unwin, and Bernard Kouchner, Special Representative of UNMIK in Pristina, the prospect of EIB assistance in the reconstruction effort was warmly welcomed. The EIB will cooperate closely with UNMIK in identifying appropriate projects in the fields of transport infrastructure, energy, water and telecommunications.

3. The EIB cannot provide support in the humanitarian/emergency or institutional areas, such as reconstruction of the housing stock. However, as soon as the initial emergency phase has been completed and the institutional framework established, the EIB will be able to provide finance for longer-term investment projects. We expect to lay sound foundations for formulating well-balanced financing plans for projects, including significant grant components.
   
   Initial investigations conducted by the EIB Task Force on the ground have shown war-related damage to infrastructure to be significant, although the consequences of 10 years of neglect of essential renewal and maintenance activities are equally serious. Programmes aimed at remedying these shortcomings and restoring adequate levels of service in the transport, electricity, water supply and telecommunications sectors are therefore urgent.

4. With regard to the nature of EIB lending, this will require financing on concessional terms in order to offer the very long-term loan maturities, extend grace periods and low interest rates necessary for take-up. Our experience in Gaza confirms this. A blend of EIB loans and budgetary support will therefore be essential – a matter which we will be discussing soon within the EU.