Donor Co-Financing Assessment for New Country Strategy
4. Defining EBRD Country Strategy Priorities
What needs to change?
(Country Diagnostic)
No single economic space. High
decentralisation with different
business regulations and procedures
across the two entities.
• Low SME productivity, including due to
the lack of know-how and skills. Focus
on basic digital technologies. Lack of
awareness and IT skills.
• One of the most challenging labour
market situations in the region,
including high emigration and poor
inclusion of women and youth.
Limited forward and backward
linkages. Focus on low value added
activities in global value chains.
• Low efficiency of SOES and weak
capacity at local level.
Large, inefficient SOES with weak
corporate governance due to complex
and fragmented governance
framework, inadequate
responsibilities of the supervisory
boards, and weak internal audit
frameworks.
• Inadequate transport infrastructure;
ranks low on road connectivity and
non-road transport infrastructure.
Highest energy intensity in the region,
four times the EU average.
• Around 60 per cent of electricity is
generated from coal (lignite). High
level of air pollution.
•No bankable market-based support
mechanism for new renewable
projects.
• Significant climate change
vulnerabilities and high risk of
flooding.
•
.
Can it be changed?
(Political Economy)
Strengthening the rule of law and
aligning laws and regulations to those
in the EU is needed to facilitate the
EU accession process.
• Increased awareness and better IT
skills based on existing strengths
could lead to enhanced digitalisation.
Large and expanding diaspora may
support know-how and skill transfers.
Thanks to industrial heritage, the
country has relatively strong
manufacturing base.
• Weak financial performance of many
SOES could eventually be an impetus
for SOE reform and governance
improvements.
• Satisfaction with public services and
transport infrastructure is low,
supporting reforms linked to
infrastructure improvements needed
to align with EU transport acquis.
Completion of Corridor Vc motorway
continues to be top local and regional
transport priority.
EU and Energy Community Treaty
obligations require changes to the
energy system
• Potential carbon border tax adjustment
could significantly hurt industry and
manufacturing sector
Adopted an updated enhanced NDC;
need to deliver comprehensive and
Paris-aligned NECP and Just Transition
approach, that also addresses socio-
economic risks.
What can the Bank do?
(Institutional Capabilities)
• Focus on supporting the private
sector directly or indirectly through
the combination of investment,
policy engagement to enhance the
environment for business and
technical assistance, including
finance and advice for SMEs.
Support for the access to skills and
employment.
Comprehensive approach to
strengthening digital transition.
• Extensive experience with support
for privatisations and SOES reforms,
including corporate governance
improvements and public
procurement reform.
• Focus on regional integration
• Close cooperation with the EU and
other IFI on reform agenda,
governance reforms and
infrastructure investments.
•
Systematic and innovative approach
to identifying and investing in
sustainable (municipal)
infrastructure (Green Cities).
Support for the transition to a green,
low carbon and climate resilient
economy and NECP implementation
through the new GET Approach.
• Emphasis on a reduction in energy
intensity and the level of carbon
emissions while managing
adjustmentCcosts (Just Transition).
Strategic Priorities
(2022-2027)
Strengthen the
private sector role,
including through
upgrade of skills and
digitalisation
Close key
infrastructure gaps
pursuing
governance
improvements and
further regional
integration
Support energy
diversification away
from coal and
promote low carbon
transition
European Bank
for Reconstruction and Development
What We Want to see
(Key Objectives)
Enhance private sector
competitiveness and access to
finance, including support for
digitalisation and adoption of
improved products and processes
Improve business skills,
standards and business
sophistication; Enhance
vocational, digital and green skills
development and equal
opportunities
Support business and capital
markets environment, FDI
investment and integration of
local companies into value chains
Strengthen corporate and
economic governance practices;
increase efficiency of SOE
including at local level; enhance
legal, regulatory and institutional
frameworks
Improve quality and connectivity
of key infrastructure for economic
efficiency
Increase energy and resource
efficiency
.
Reduce GHG emissions,
promote climate resilience the
gradual energy transition;
reinforce networks to promote
energy resilience
12View entire presentation