A general problem for investments of this nature is a lack of awareness by SMEs of the applicable regulations and compliance standards, coupled with limitations of access to suitable medium/long term financing. In order to overcome the various barriers to such upgrade investments by SMEs, EBRD is providing credit lines to Partner Banks ("PBs") in Bosnia and Herzegovina for on-lending to SMEs (the "sub-borrowers") for eligible investments (the "Project").

EBRD is expected to provide financing of EUR 20 million to three local PBs. The maximum sub-project size under the Facility is EUR 1,000,000 but a lower average is anticipated.

Ian Brown, EBRD Head of Bosnia and Herzegovina, says: “We are very proud of this important programme which allows us to address key issues facing local businesses in a targeted and focused way. It demonstrates what the EU and EBRD can do working together and will set standards in easily accessible support in areas where it is much needed.”

One of the benefiting SMEs is Omorika – a PET packaging producer from Doboj, in the north of the country. Omorika received a relatively small loan and technical cooperation support to upgrade their health and safety, environmental protection and product quality measures – all in line with EU standards.

At Omorika they manufacture preforms and plastic packaging made from PET, a material best known as clear plastic. Then they sell their preforms and containers to various clients, who use them for bottling drinks, oils and chemical products.

PET is one of the most widely used plastic materials in the world. Manufacturers like it because it’s safe, strong, clear and versatile. Customers choose it for its safety, lightness, shatter-resistance and recyclability.

“The extensive EBRD experience in large scale regional initiatives, combined with hands on knowledge of EU SME Policy seeks to create maximum benefits for SMEs in Bosnia and Herzegovina,” said Melvin Asin, Head of Cooperation, EU Delegation to Bosnia and Herzegovina.

“It also furthers synergies with relevant EU policies, by facilitating the introduction of EU standards through the provision of adequate advisory services as well as better access to loan finance.”

Omorika is modernising its facilities to meet EU requirements so they will be ready once the country joins the EU.

Thanks to the loan, they were able to purchase two pieces of equipment – a water chiller and PET drier. Both are energy-efficient. Omorika’s staff also received training on how to operate them safely.

With these new machines, the production process is more stable, and the final products are of higher quality. In terms of environmental compliance, the new drier doesn’t emit gases contributing to ozone depletion.

Bokan Dušan, the owner of Omorika, said: “The EBRD provided us with strong support. They made it possible for us to purchase modern and new equipment, allowing us to make savings in energy. Also they helped us train our production employees, and we’ve managed to become a lot more competitive in the European market, when it comes to our products, their delivery and sales.”

Meeting EU market requirements is not the only incentive for Omorika to improve its production systems. Conservation of natural resources and the environment, reduction of plastic waste pollution and raising employment are also important to the owners.

“Our company tries to raise awareness among local community about collecting PET packaging for recycling in order to keep our environment clean“, said Mr Dušan.

Thanks to this joint EBRD/EU programme, not only local economy is boosted, but also the environment is preserved.

Source: europa.ba