Foreign investors focus on comparative advantages, safe environment
Bosnia and Herzegovina has excellent capacity for education in mathematics and science and the number of scientists and engineers on a global scale, said Gordan Milinić, director of the national Foreign Investments Promotion Agency (FIPA). In the context of attracting foreign capital and manufacturing systems, the country has all the profiles that are in demand; from PhD holders and technologists to technicians and skilled workers, he stated in an interview with Balkan Green Energy News.
The state official is in everyday contact with representatives of interested companies from abroad, but also with foreign investors who already operate in the domestic market. Potential investors focus mostly on project profitability, incentives and comparative advantages on the regional level, but they also take into account the feedback from existing investors on the investment environment and the time of return.
You have been a high-ranking diplomat. What do you look for in contacts with embassies of the countries that your investors come from?
Generally we have excellent cooperation with accredited embassies in FIPA’s field of activity. The cooperation concerns participation in events covering economy, ones that both sides organize with the aim to promote Bosnia and Herzegovina and the country that the ambassador presents, as well as their possibilities. Then we participate in particular projects organized by embassies, which aim to promote the country and attract foreign investors.
A number of foreign investors comes to BiH through an embassy or a body representing a country’s economy, where they send us the investors to give them necessary information and help in the implementation of an investment.
We ask embassies, basically, to send us all potential investors that are interested in any sector of economy in BiH. Their representatives also visit FIPA to report to them about how investors assess certain administrative obstacles, which the agency is working to eliminate together with responsible institutions.
What does it take to succeed in making a potential investor commit to a project in BiH in the area of green energy, utility services and sustainable development?
In the first place it is the quality of the prepared investment project, then a favourable environment for direct foreign investment and stimulative prices of electric power. The readiness of the administration in BiH and of responsible institutions won’t be an issue.
How much capacity does BiH have in engineering and skilled workers for services and development in the renewables segment and energy efficiency? The potential to adapt educational facilities and preparedness of the local workforce are some of the most important factors in attracting investment.
BiH has educated, skilled, innovative and competitive labour costs (in comparison with countries of the European Union). According to the World Economic Forum’s Global Competitiveness Report for 2013/14, it was ranked best in the region in the comparative analysis of the availability of scientists and engineers (at position 27 out of 148 countries) and the index of math and science education quality (thirteenth of 148 in total).
Which segment in the system has the priority for bolstering communication and cooperation with investors? Were there any recent improvements?
When it comes to promotion, it is direct contact with potential investors and embassies, presentation of investment projects on FIPA’s web page and investment conferences in the country and abroad (such as RENEXPO platform), and on international fairs.
In the framework of support to existing foreign investors, a programme of post-investment assistance (aftercare) was introduced in 2006, and within it we organize visits to foreign companies at least once a year with the aim to overcome possible problems in operations.
We also intensified contacts, secured support and connected all relevant institutions which work on the improvement of business environment in BiH. We made a change from the practice of bureaucratic approach towards foreign investors. We are proactive in the search for investors, in which we already made progress.
What kind of inquiries about environmental standards do you hear from representatives of overseas businesses? How do the rules compare to the surrounding countries?
Questions on environmental protection mainly concern the level of harmonization with norms and standards of the European Union in the area.
What kind of projects does Marubeni of Japan plan to launch?
Representatives of Japanese company Marubeni were interested in existing energy projects (thermal power plants, hydroelectric, wind power plants and the units which use waste, biomass and biogas for the production of power), as well as in projects in the sector of water management and environmental protection.
They were presented with accessible projects of public and private companies in BiH and given detailed information on the conditions for investment and the status of a foreign investor, which is equal in rights and obligations as a domestic investor.
What’s the status of the programme for cogeneration fuelled by wood waste and involving 40 municipalities in BiH? What is the position of Pyrox from Italy?
FIPA and company Alfa invest organized a presentation of project ‘Energy Efficiency by Application of Cogeneration from Biomass’ on July 19 in order to boost Italian investments and, accordingly, improve the economic situation in the country and enable the creation of jobs.
It is a project worth EUR 150 million that Italian company Pyrox is ready to invest in 40 municipalities in BiH which, according to the business plan, would each earn EUR 1 million per year and hire 25 workers.
What are the plans of investors from Hungary?
Hungary plans to invest EUR 61 million in BiH in 2016 in projects in the areas of environment, agriculture, tourism and energy. FIPA is expected to present investors with possibilities, especially projects in the said sectors, as well as to mobilize all institutions in BiH that participate, so that they can give potential investors full support and to help them launch operations.