According to the ambassadors in Denmark of the eight Central and Eastern European countries which will become members of the EU on 1 May 2004, the Investment Fund for Central and Eastern Europe (IØ) has played a huge part in the development of their countries. At the same time they all agree that IØ will have a very important task to fulfil in future when it comes to supporting the development in the EU’s new neighbouring countries.
Among the issues emphasised by the ambassadors in eight interviews in IØ’s Annual Report, published on 25 March, are the following:
- IØ has created jobs in Eastern Europe in areas outside the major cities, where unemployment rates are high.
- IØ has in particular promoted investments in environmental projects, which is urgently required.
- IØ’s investments have promoted development in otherwise overlooked sectors, e.g. infrastructure.
- IØ has helped many small Danish enterprises – which would not have risked it otherwise – to invest in the countries in question.
- IØ’s investments in the new neighbouring countries are important from an economic as well as a political point of view – as expressed by the Latvian ambassador, “we do not wish to build a new Berlin Wall”.
2003 was the last year of IØ participation in investments in the eight countries, as they have entered into an agreement about accession to the EU. The existing projects in the countries in question will, however, go on and continue to be monitored by the Fund’s investment officers, but new investments will have to be made further south and east, outside the EU area. For that reason IØ has employed advisers in Bulgaria and Ukraine in 2003, and the office in Moscow, which the Fund opened in 2002, is now well-functioning.
IØ participated in the financing of 25 new projects in 2003, of which 17 were in the new EU member countries. The remaining eight were distributed on Croatia, Romania, Russia and Ukraine. IØ’s total investments in 2003 amounted to DKK 510m compared to DKK 412m in 2002. The investments were made in 11 different countries and have created around 1,770 local jobs.
IØ’s accounts for 2003 showed a record profit of DKK 104.6m compared to a profit for 2002 of DKK 77.4m. The good result is primarily due to project dividends and positive value adjustments in IØ’s project portfolio, partly as a consequence of the switch to new accounting principles.
The profit will – as always – be reinvested, even though IØ’s activities will be subject to a number of limitations in the years to come as a consequence of the Danish government’s decision that the Fund must repay DKK 650m of its equity to the Danish State.
For further information, please contact:
Sven Riskær, Managing Director, tel +45 33 63 75 00