By Benet Koleka
TIRANA, Jan 21 (Reuters) - The European Bank for Reconstruction and Development (EBRDm) plans to invest 800 million euros in the Balkans in 2009 to boost growth and ease the impact of the financial crisis, a top bank official said.
Claudio Viezzoli, the EBRD's Western Balkans chief, told Reuters in an interview on Tuesday the bank in 2008 had invested 655 million euros, mostly in the private sector and that the bank sees a further increase in 2009.
"We plan to invest 810 million euros ($1.05 billion) this year in regional infrastructure, banking and the corporate sector to ... boost growth in the real economy," Viezzoli said.
He said that foreign direct investments (FDI) in the region would likely see a slowdown in growth with investors preferring to wait and see developments over the next six to 10 months.
"We do not expect a major growth in FDIs. We are really seeing a drying up of liquidity in the banking system for the real economy ... and we are going to see as a consequence ... a reduction in GDP growth," Viezzoli told Reuters.
To fill investment holes and shore up confidence, the EBRD would focus on the private sector as that would aid reforms and bank lending. "We also want to increase our involvement with the financial institutions," he added.
Viezzoli said that many EU member states want to consolidate their financial instruments, mechanisms and resources at the European level to provide better service to Balkan countries.
Balkan countries want to join the 27-member European Union, and the prospect of membership, along with increasing regional cooperation, was pulling up the Balkan region, Viezzoli said.
"We are going to work over the next few months to create the right mechanism together with the European Commission, the European Investment Bank and the Council of Europe (Development) Bank to provide a better service for the availability of resources for key strategic infrastructure projects," he added.
Of the 810 million earmarked for the Balkans, around 250 million will be invested in transport, energy efficiency, renewables, agribusiness and the private sector in Serbia and Kosovo.
Croatia will borrow 150 million from the EBRD as the bank steps up involvement in the financial sector, including credit lines for lending to small and medium enterprises.
Bosnia, Albania, Montenegro and Macedonia will receive about 400 million for hydropower plants, transport, banking, agribusiness, wind farms and the private corporate sector.
Seeing small and medium enterprises as "the cornerstone of development", Viezzoli said the EBRD will keep investing either through credit lines by lending to banks or investment in equity in local enterprises.
"We believe they are good companies with the prospect of becoming regional players in the long term," he added. (Editing by Adam Tanner and Stephen Nisbet)