DEG interested in strengthening its presence in Serbian market – German development organization taking part in Cibuk wind farm project as well

The German Investment Corporation (DEG) has recently included the investment in the Cibuk wind farm, one of the biggest renewable energy projects in the Balkans, in its portfolio in Serbia. The portfolio of this member of the KfW group and one of the biggest global private sector financiers, currently amounts to around EUR 80 million in Serbia, and DEG plans to further increase its presence in the local market.

DEG has been present in Serbia since the early 2000s and provides a wide range of services tailored to the respective investment. For each investment, a carefully planned, plausible financing is worked out including long-term loans, equity capital, mezzanine finance and guarantees. Recently, they organized another presentation of their services in Belgrade, in cooperation with the Chamber of Commerce of Serbia.

We talked to representatives of this company about their latest projects in the country and their plans for the year ahead. Their portfolio in Serbia encompasses different sectors of the economy, including financial institutions, agriculture and manufacturing, and now they are active in the energy sector as well.

Investments in RES

DEG stepped into the Serbian market in 2002 by purchasing shares in Exim Bank. After the sale of these shares, DEG`s portfolio in Serbia mostly consisted of credit lines for financing small and medium companies through commercial banks. DEG has also taken part in the development of Klas, the crediting of rubber footwear plant Tigar etc.

– We have refinanced local commercial banks in Serbia in the last few years in order to facilitate access to investment capital for small and medium-sized enterprises. One of our customers we provided with a long-term loan is the agri-industrial MK Group, one of the leading agricultural groups in Southeast Europe. The financing was used to invest in new equipment to produce sugar by extraction from molasses and in the modernization of existing and purchase of new irrigation systems – DEG says for eKapija.

Most recently, they have signed an agreement with Cibuk Wind Holding regarding the acquisition of a minority interest in the Cibuk wind farm.

– Alongside DEG, the Finnish private investment company and experienced wind farm operator Taaleri becomes shareholder in the project. The majority shareholding is with Abu Dhabi’s renewable energy company Masdar – DEG reminds.

Cibuk will be the largest wind project in the Western Balkans.

– With an installed capacity of 158 MW, when completed, the wind farm will produce an annual total of more than 468 GWh of electricity. We are thereby contributing to ensuring that Serbia exploits its huge wind power potential. The wind farm provides an additional source of energy to meet the increasing demand. More than 120,000 people will be supplied with energy. This is an important step towards an environmentally and climate-friendly energy production in future and enables Serbia to be less dependent on lignite resources – DEG says, emphasizing the important plans for the upcoming period.

– DEG plans to increase its presence on the local market as we find Serbia to be interesting ground for DEG as a long term financing partner and advisor to corporates. We provide financing not only for manufacturers and project developers investing in infrastructure projects, but also for financial institutions – our interviewees remind.

– We promote the development of the financial sector while strengthening local capital markets in order to facilitate reliable access to investment financing on the ground, especially for small and medium-sized enterprises. By doing so, we contribute to additional growth effects – they add.

Along with financial help, they also offer technical help in preparing and monitoring projects within investment endeavors.

– We offer companies more than the right long-term financing for their investments in developing and emerging-market countries, we also offer solution packages which are tailored to their needs. We advise our customers and provide intensive support to help them shape their investments even more professionally, efficiently and sustainably – DEG adds.

These activities also contribute to the German-Serbian Initiative for Sustainable Growth and Employment, initiated by the governments of these two countries in 2015.

(Photo: Romolo Tavani/shutterstock)

Financing investments in over 80 countries

DEG finances investments by private companies in developing and emerging countries. The organization, whose founding capital originates in state funds, provides capital for long-term investments under market conditions and invests in cost-effective projects with a positive effect on development in all sectors of the economy, as well as the financial sector. They are only active in projects supporting development processes, contributing to preservation of the environment and social justice. They also have an Exclusion List which lists activities and areas in which DEG does not invest as a matter of principle.

What today is called DEG was founded as the "German Association for Economic Cooperation" in 1962. The idea of the founders was to support developing countries in building the private sector and to assist German medium-sized companies to move into foreign markets. Initially, the focus was on Africa, and the company is now active in Asia, East Europe and Latin America. In total, DEG finances investments in around 80 countries.

Since 2001, DEG has been a member of the German promotional bank KfW and is thus an integral part of its international project activities such as exports finance and financial cooperation with developing countries. It has thirteen representative offices and more than 500 employees around the globe. Its current portfolio amounts to EUR 8.6 billion.

M.M.

DEG Deutsche Investitions- und Entwicklungsgesellschaft mbH Köln Predstavništvo Beograd

KfW kancelarija Beograd

Beogradska pekarska industrija - BPI Beograd

Tigar a.d. Pirot

MK Group d.o.o. Beograd

Privredna komora Srbije

Vetroelektrane Balkana Beograd

German Investment Corporation

DEG

KfW

Cibuk wind farm

wind farm Cibuk

wind farms in Serbia

wind energy

wind turbines

renewable energy sources

RES

mezzanine financing

equity capital

new forms of finance

financing private companies

Exim Bank

SME sector

Klas baking company

rubber footwear plant Tigar

Tigar Pirot

MK Group

molasses

agricultural industry

food industry

food sector

Cibuk Wind Holding

Tesla Wind

Masdar Abu Dhabi

Taaleri Finland

Taaleri

German Association for Economic Development

German Serbian Initiative for Sustainable Growth and Employment

Chamber of Commerce of Serbia

CCIS

financing small and medium companies