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1 April 2005.

GROWING INTEREST IN DANISH INVESTMENTS IN EASTERN EUROPE

The Investment Fund for Central and Eastern Europe (IØ) is experiencing a growing interest from Danish companies to invest in production in Eastern European countries, even though they are risk markets. At the same time authorities in the Eastern European countries welcome Danish investments, because Danish companies set much higher standards for occupational health and safety and environmental issues than the countries themselves.

“Many Danish companies invest in Eastern Europe to strengthen their competitiveness in foreign markets and to secure employment in Denmark, one of the reasons being that production abroad creates growth”, says Frank Norman Larsen, Deputy Managing Director of IØ.

Since 1989 the Fund has invested in Central and Eastern European countries in cooperation with Danish enterprises to create economic growth and development in those countries. 2004 was a successful year, as IØ was able to maintain a high number of new projects even though the Fund can no longer invest in new projects in the eight Central and Eastern European countries which became members of the EU on 1 May 2004. IØ invested a total of DKK 1.3bn in 15 new projects in cooperation with Danish companies.

“IØ’s investments in the new EU countries have contributed to the creation of jobs and to improved environmental conditions and growth; this has improved the possibilities for the countries to participate in the European community. We only invest in companies where our money and Danish knowledge can help improve local conditions. As a general rule greenfield projects have to comply with both local and Danish environmental requirements. When taking over existing companies the partners have to make sure that local environmental rules are complied with from the commencement of use, and at the same time a plan for reaching Danish standards has to be prepared. In Poland the environmental conditions have been significantly improved through IØ’s involvement”, says Frank Norman Larsen.

Investments in new projects moved further east in 2004 to Ukraine, Russia, Bulgaria, Romania and Serbia & Montenegro. The 15 new projects include production of freezers, steel plates, shoes, animal feed and pigs. The projects will create 2,000 new jobs in the countries of operation and exports from Denmark at a value of approx. DKK 800m. Furthermore, IØ made additional investments in five existing projects in 2004, and in total IØ invested DKK 539m in share capital and loans in Central and Eastern Europe in 2004.

“Most of the projects are made with small and medium-sized enterprises as partners. This means that 12 out of 15 projects were established in cooperation with Danish companies with less than 300 employees, and of all projects established until the end of 2004, 75% were made in cooperation with Danish SME partners”, says Frank Norman Larsen. IØ offers advice free of charge, when Danish companies wish to establish production in Central and Eastern Europe. Furthermore, IØ is involved in the project for up to ten years as a board member and financial partner.

IØ’s net result displayed a profit of approx. DKK 90m in 2004, which is approx. DKK 15m less than the year before. In 2004 the Fund transferred money back to the State for the first time, in total DKK 650m. As a consequence, IØ had to introduce a maximum amount for future investments. Furthermore, the Fund had to lay off staff and future profits will be smaller than they have been so far.

For further information, please contact Frank Norman Larsen, Deputy Managing Director, IØ,

Tel +45 33 63 75 00

IØ’s annual report may be ordered at www.ioe.dk

1 April 2005