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INTERVIEW-Kosovo FDI down, seeks privatisations-trade min

Published 11/24/2009, 09:07 AM
Updated 11/24/2009, 09:09 AM

* Kosvo plans three major privatisations from June 2010

* Kosovo FDI down 10 pct in first 9 mths from year ago

* Could blockade Serb exports, seeking amicable solution

By Carolyn Cohn

LONDON, Nov 24 (Reuters) - Kosovo is looking to carry out three major privatisations next year, as the Balkan country struggles with falling foreign direct investment and a Serb blockade on exports, the country's trade minister said on Tuesday.

"There are three main privatisations -- post and telecommunications, the airport and KEK energy," trade minister Lutfi Zharku told Reuters in an interview on the sidelines of a Kosovo investment forum.

"We have selected transactional advisers and we believe we will complete these projects from June next year up until the end of next year."

Foreign direct investment data for the first nine months of 2009 suggest a 10 percent fall, Zharku said, with full-year FDI totalling 360 million euros in 2008.

Lignite producer Kosovo has also suffered a 40 percent drop-off in exports and an 8 percent fall in remittances this year, Zharku added.

Kosovo declared independence from Serbia in 2008 and joined the International Monetary Fund and the World Bank in June.

Since the end of a 1998-99 conflict, Kosovo has received around 3 billion euros in aid and is expecting to receive another billion euros from international donors by 2011.

Kosovo is negotiating with the IMF for a loan of $200 to $300 million and hopes to conclude a deal soon, though Zharku declined to give more details.

Serbia prevents Kosovo from selling or sending goods through Serbia and Kosovan exporters have pushed for a similar blockade.

"That option is on the table, but we are still giving a chance to amicable solutions. We are trying, with the international community, to solve the problem," Zharku said.

He said capital expenditure on infrastructure should help Kosovo's growth outlook, with 470 million euros in this year's budget for capital expenditure, and 400 million euros allocated for next year.

Central bank governor Hashim Rexhepi earlier told the forum that Kosovo was looking to become a member of the European Bank for Reconstruction and Development by early next year, a development which should help investment in the private sector. ((carolyn.cohn@reuters.com; Reuters Messaging carolyn.cohn.reuters.com@reuters.net; +44 207 542 6320; editing by Chris Pizzey))

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