INTERVIEW - Islamic Development Bank Sets up Investment Firm in Bosnia

The Islamic Development Bank is setting up a company in Bosnia that will probe investment opportunities in the country and the region, a senior bank official said.

“This is meant to be an international entry point for investors who are coming not only from our member countries, the Middle East and North Africa - Islamic countries in general, but from all over (we have today an investor from Germany who wants to participate), as well as from other parts of Europe,” said Khaled Al-Aboodi, CEO and General Manager of the Islamic Corporation for the Development of the Private Sector (ICD), which is part of Saudi Arabia-based Islamic Development Bank (IDB).

“This is meant to be an international vehicle for investment in Bosnia and Herzegovina and the region,” he told SeeNews on the sidelines of the Sarajevo Business Forum 2011 organised by Bosnia Bank International and the IDB earlier this month.

Al-Aboodi said the new company would have a start-up capital of $10 million (7.0 million euro).

The most attractive sectors investors backed by IDB are looking at are hydro energy, tourism, agriculture and health and rehabilitation but they are also open to any other areas.

Al-Aboodi said that following last year’s edition of the Sarajevo forum global investors had approached the IDB asking it to assess the possibility of creating a vehicle for investment in the region of Southeast Europe. A feasibility study was concluded in August of last year and investors agreed to set up a company in Sarajevo that will address the whole region.

“The idea is that this company will work business opportunities, shape them up, do the feasibility studies. If there are requirements for licensing, for example, the company would get the licensing for these particular projects and then offer them again to investors - to the shareholders of this company or to other investors.”

Al-Aboodi said hydro power projects are among those that could generate long-term return. “Maybe the return is not so high but it is very sustainable.”

Bosnia, which is a net exporter of electricity, has been using only some 30% of its hydro power potential. Bosnia's three power utilities have prepared many projects for the construction of new small and large hydro power capacities, some of them in cooperation with its eastern neighbour Serbia.

“In the area of tourism we see great potential in the region and especially here in Bosnia. So I think we will see a lot of investment in the tourism sector.”

Another sector of big potential is the agribusiness, said Al-Aboodi.

“The focus on the agribusiness should be in very high value crops rather than mass production of wheat, or rice, which is probably difficult to do here because of the size of the lands.”

The health and rehabilitation sector in Bosnia is also set to boom because of the country’s clean environment, Al-Aboodi said.

“Bosnia is one of the best areas in Europe in terms of purity and cleanliness of the environment. I would say that we expect to see a lot of investment on establishing health resorts, rehabilitation centres where people would recover after a surgery or similar.”

Al-Aboodi said the investment company is in a process of registration and its management has already been identified. It is expected to start operations within two to three months and promote at least two projects to investors by the end of the year.

“We are starting here in Bosnia, at our base, and then we will try to cover the rest of the region,” Al-Aboodi said.

($=0.7004 euro)

Choose your newsletter by Renewables Now. Join for free!