BOSNIA AND HERZEGOVINA

Presented by Alma ŠabetaHead of the Investor Support Unit

INVESTMENT OPPORTUNITIESBosnia and Herzegovina

In cooperation with:In cooperation with:

A small country with huge potential

Strategic location

The fastest

growth of GDP

The most stable currency in SEE

Competitively priced labor force

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

Population 3.4 million

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*FIPASource: CB BiH, Agency for Statistics of BiH,*FIPA

Indicators 2000 2001 2002 2003 2004 2005 2006 2007 2008

Nominal GDP (billion EUR) 5.5 5.9 6.6 7.4 8.1 8.7 9.8 11.1 12.5*

GDP per capita (EUR) 1,660 1,786 1,958 2,214 2,388 2,561 2,873 3,254 3,648*

Real GDP growth rate (%) 5.5 4.5 5.5 3.0 6.3 3.9 6.7 6.8 7.1*

Industrial production growth rate (%) 8.8 12.2 9.2 4.8 9.0 10.0 11.0 10.0 9.2

Average net wages (EUR) 190 209 228 247 258 275 300 322 385*

Annual inflation rate (%) 4.8 3.1 0.4 0.6 0.4 3.7 6.1 1.5 6.5

Annual unemployment rate (%) 39.7 40.3 40.9 42.0 43.2 43.0 31.0 29.0 23.4

Currency reserves (mill EUR) 522 1,379 1,270 1,428 1,779 2,160 2,787 3,425 3,184

Trade balance (billion EUR) - 3.00 - 3.31 - 3.52 - 3.67 - 3.68 - 4.01 - 3.41 - 4.14 - 4.52

Total FDI (mill EUR) 159 133 282 338 567 478 564 1,628 701*

FDI contribution to GDP (%) 2.9 2.2 4.3 4.6 7.0 5.5 5.8 14.7 5.6*

Deposits of households in Commercial Banks, mill EUR 267 740 829 985 1,273 1,629 2,097 2,641 2,565

Population (in million) 3.30 3.32 3.35 3.35 3.38 3.38 3.40 3.40 3.44

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Investment potentials – Attractive economic sectors

• Energy Sector

• Agriculture and Food Processing Industry

• Infrastructure and Construction Sector

ENERGY SECTOR

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OVERVIEW:• One of the most powerful and prospective sectors in BiH with a long tradition • Actual capacity of all power plants in BiH is app. 4.000 MW (56% in thermal and 46% in hydropower plants) • Presently there are a four distribution Companies, with18 system distribution regions (they serve approximately 1.2 million of consumers, distribution losses remain at the 10% level)• Generation and Consumption of energy mix in 2008 (GWh):

Generation 13 942.00

Hydro PP 4 818.00

Thermal PP 8 933.00

Small PP 191.00

Consumption 12 241.00

AVAILABILITY OF RE SOURCES

Small-scale hydro power plants (up to 5 MW):•Planned installed power 286 MW•Expected annual generation 963 GWh•Installed power in operation 37,7 MW

• Wind – total estimated power is cca 2.000 MW• Solar energy – use potential cca 70,5 GWh• Geothermal energy – potential cca 90.2 MWt• Biomass – firewood and charcoal are currently growing energy source in BiH

COMPETENT AUTHORITIES (C.P.)• The Energy Policy, Laws and Regulations, and Strategy Development - the State Ministry • Production and transmission of Energy Laws and Regulations - Entity Ministries • Transmission of Electricity and International Trade - the State Electricity Regulatory Commission• Licensing, Tariffs and Technical Conditions - Entities Regulatory Commissions•Transmission and Market Development - A single transmission company

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AGRICULTURE AND FOOD PROCESSING INDUSTRY

OVERVIEW:• Land

~ 1.2 million ha of arable land: ~ 100,000 ha of orchards and vineyards; ~ 500,000 ha of improved grazing land; ~ 850,000 ha of mountain pastures• Climate ~ predominantly moderate continental (Central BiH); ~ predominantly continental (Northern BiH); ~ Sub-Mediterranean (South BiH)• Rural Development ~ focus of all governmental institutions in BiH; ~ essential to increase the volume of agricultural production, employment opportunities, incomes and living standards of rural population, to improve environmental protection; ~ 81% of the total land area and 61% of the population classified as rural in BiH• Labor ~ considering the presence of the rural unemployment and the fact that agriculture employs about 15% of the labor force agricultural labor is abundant and cheap; all categories of experienced workforce (engineers, technicians, skilled workers) require in food processing industry are available under competitive prices

DEVELOPMENT AND INVESTMENT POTENTIAL SUBSECTORS• Field Crops• Medicinal and Aromatic Herbs• Fruit, Vegetable and Wine Growing• Livestock and Forage Production e.g. Company Sigma Prom doo Novi Grad, goat raising & breeding farm •Food Processing e.g. Agropodrinje Gorazde, construction of storage and the installation of primary treatment, conservation and packing of dry fruit, medical herbs, etc.

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INFRASTRUCTURE AND CONSTRUCTION SECTORS

BUSINESS CONDITIONS:~Long standing tradition and reputation, in-country and abroad; ~State-of-the art solutions in architecture and civil engineering; ~Price competitive, qualified work force; ~All elements of construction (design, high quality construction, building materials)

NEEDS:~Creation of consortiums required for large scale projects; ~Substantial investments needed, generally and in the equipment and machinery.

PROJECTS:• Infrastructure projects - Construction of highway V-c Corridor Budapest – Sarajevo – Ploče

as a part of the EU’s TEN Network (priority) - The railway reconstruction as a part of Vc Corridor - Two ports on river Sava – reconstruction and improvement of

waterway transport : Brčko and Šamac (connection to Danube)• Projects as per development plans of mayor cities• Building material production projects • Joint-venture projects:

- Business Zone Gračanica – ŠIRBEGOVIĆ Group - Commercial and Business Centre BELIRA – Energoplan d.o.o.

- Production of Construction Material – MS ŠAMOT-RS, Sokolac

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• FDI Law

• National treatment of foreign investors• Repatriation of profits• Protection against nationalization, expropriation or similar measures• Right to freely employ foreign nationals, subject to the labor and immigration laws in BiH

• Trade and export agreements and regimes• Central European Free Trade Agreement • Free Trade Agreement with Turkey• Preferential export regime with EU and others• 39 Agreements on Promotion and Protection of

Investment (Greece included)• 32 Agreements on Avoidance of Double Taxation

(Greece included)

Favorable Legislation

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INVEST IN BOSNIA AND HERZEGOVINA

YOUR NEW OPPORTUNITY

THANK YOU FOR YOUR ATTENTION

Sarajevo OfficeBranilaca Sarajeva 21Phone: ++387 33 278 080Fax: ++387 33 278 081E-mail: fipa@fipa.gov.ba

Banja Luka Office

Ðure Daničića 1/III Phone/ Fax: : ++387 51 226 180 E-mail: banjaluka@fipa.gov.ba

Mostar OfficeRade Bitange 30Phone /Fax: ++387 36 558 815E-mail: mostar@fipa.gov.ba

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Bosnia and Herzegovina

In cooperation with:In cooperation with: