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The Government of the Republic of Serbia

In the service of citizens

Larger foreign investments in Serbia expected in autumn

Belgrade, 25 July 2005

Serbian Minister of International Economic Relations Milan Parivodic said today that larger foreign investments in Serbia are expected this autumn.

At a press conference, at which a seven-month report on the work of the Ministry of International Economic Relations was presented, Parivodic said that the largest portion of direct foreign investments will be allocated to infrastructure development, especially that of oil, gas, telecommunications and roads in Serbia.

He said that the Turkish Enka company is interested in constructing a gas pipeline across Bulgaria to Nis. Another major Greek company is interested in building gas pipelines and power plants.

Parivodic said leading international companies, such as Hellenic Petroleum, Mol, Lukoil, Shell and OMV, have shown interest to invest in the oil sector.

He added that the leading international telecommunications company Vodaphone is interested in investing in the mobile phone network in Serbia.

Parivodic stated that around 90 percent of goals set by the Ministry have been achieved since the beginning of the year, adding that the improved image of Serbia is expected to result in an investment boost that should begin in September and October. However, its effects will be best felt in 2006.

Deputy Minister Vlatko Sekulovic said the Serbian parliament will adopt a bill on industrial parks at its first autumn session, with the aim of facilitating red tape for both foreign and home investors. The bill envisages tax reliefs and subsidies in certain economy sectors.

He added that in the past seven months there has been a considerable upsurge in export, which is not an “ad hoc” occurrence but a trend that will last and substantially reduce Serbia’s foreign trade deficit.

The key product for export improvement will be sugar, now controlled by the Ministry with the aim of keeping the quota for privileged exports to the EU market after June 2006, Sekulovic concluded.

Assistant Minister Dragan Penezic said he expects the government to approve a tender for a section of the Horgos-Pozega highway to be called, and another one for a section of the Nis-Dimitrovgrad highway, the latter being the last uncovered section of the international Corridor 10.

Penezic pointed out that tenders for four concession projects in mining have been completed. Eleven leading international companies have submitted tenders for ore exploration on Crni Vrh and in Bor. Their offers will be opened in early September, and these four projects are expected to yield a €250 million investment income, Penezic concluded.

Assistant Minister of International Economic Relations Gordana Lazarevic said that between €660 and 700 million in foreign donations for economic reforms in Serbia are expected by the year’s end, out of which amount €460 million have so far been received, she concluded.