EBRD Approves €4 Million Financing to Boost Green Housing and Support Entrepreneurs in Bosnia and Herzegovina

The European Bank for Reconstruction and Development (EBRD) has taken a significant step toward the financial and social development of Bosnia and Herzegovina by giving a green light to a €4 million financing plan for Intesa Sanpaolo Banka. The main goal of this funding is to speed up the process of building environmentally friendly houses, creating financial opportunities for young entrepreneurs, and supporting women-led businesses in a country where many still find it hard to get capital.

This financing consists of three different loans put together as a single package instead of just one loan. Each loan part is aimed at a specific area where the economy of Bosnia and Herzegovina requires assistance. The largest part of this package is a €2 million loan which is given under the Western Balkans Green Economy Financing Facility (GEFF) and is mainly focused on the residential sector. It will enable homeowners and residential developers to invest in energy-efficient modifications and technologies.

If we take, for example, better insulation, we will have more efficient heating and cooling systems, plus renewable energy installations for both houses and apartments. In the case of the energy savings made possible by such upgrades, the residents will also benefit in the long run as they would collectively be contributing to the cutting of emissions by the long-term environmental goals of their locality.

The second loan of €1 million, which is under the Western Balkans Youth in Business programme, targets young entrepreneurs. Business owners and founders who are younger in age in Bosnia and Herzegovina still face a lot of difficulties in obtaining capital. One of the reasons might be that they do not have the required collateral or their business history is not as long as that required by traditional banks. This loan will undoubtedly create a pathway through which more young business owners will be able to expand their micro, small, and medium-sized enterprises (MSMEs). The reason why this is very important is that youth entrepreneurship is a source of innovation and thus, a long-term economic growth driver.

EBRD’s support consists of three components, one of which is women-led businesses. Women entrepreneurs are exposed to similar financial difficulties as young owners and besides that, they have to face cultural and systemic barriers that make it even tougher for them to get capital. EBRD and Intesa Sanpaolo Banka intend to support this economically backward segment by employing part of the €4 million for loans for women business owners.

This is very important for the reason that women-led businesses are being supported, which in turn leads to an inclusive economy. The moment women are granted access to capital, they will put it into their families and communities. This will, in turn, create a demand for the local market and consequently, participation in the formal economy will be widened. Therefore, this financing initiative is in line with the overall objective of sustainable and inclusive development.

The officials from both parties have reiterated the importance of this initiative. Stela Melnic, the EBRD Director for Bosnia and Herzegovina, noted that loans are a move towards more inclusive growth and a greener future. In the same way, the head of Intesa Sanpaolo Banka pointed out that this support would help enrich the variety of financial solutions proposed to the customers who would otherwise find it hard to get credit.

Intesa Sanpaolo Banka is the largest bank in Bosnia and Herzegovina, besides that it operates a very wide network of branches in the country. The extensive geographic range of this bank is another reason why this loan project is perceived as very friendly and approachable. It means that these loans will, in the majority of cases, be issued to all kinds of communities no matter their size, urban or rural, thus allowing more people and businesses to benefit from the loan project.

The loan, on the one hand, is in line with the EBRD’s aspirations for a Western Balkans region that enjoys sustainable and inclusive economic development while, on the other hand, it continues to show the trend of international financial institutions filling the gap left by the private sector in credit markets. This support can be a part of a more than strong and a wider range of an economy in a country like Bosnia and Herzegovina.

This €4 million financing package is perfectly aligned with the current development agendas where there is a growing concern for the climate and economic inequality, thus it is already a significant step toward solving the mentioned issues. The package not only addresses the problem of eco-friendly but also expensive home improvements for young and women entrepreneurs by making them loans and giving them access through those loans to a wider range of materials. The dual focus therefore not only contributes to climate change but also provides the people with a practical blueprint for how the development finance can make a tangible impact in people’s lives.

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