Home Business EBRD green finance supports Kosovo’s bottled water producer Uje Rugove

EBRD green finance supports Kosovo’s bottled water producer Uje Rugove

by Paul Morgan

Uje Rugove, Kosovo’s leading producer of bottled water, is set to receive a €6 million sustainability-linked loan from the European Bank for Reconstruction and Development (EBRD) and the Enterprise Expansion Fund II Western Balkans (ENEF II). The loan aims to support Uje Rugove in improving its competitiveness and expanding its operations.

The funds will be used by Uje Rugove to purchase a new facility and install high-capacity production lines, enabling the company to introduce new product categories in sustainable packaging. This move will help the company expand its product range and become more competitive in both the domestic and export markets.

This loan is a significant milestone for Kosovo as it represents the first example of a green financing instrument in the country. It integrates climate and environmental, social, and governance (ESG) standards and risk considerations into the financing structure.

The sustainability-linked loan comes with three environmental targets for Uje Rugove to achieve. These targets include reducing water losses during production, minimizing packaging waste during production, and incorporating at least 50% recycled polyethylene into its packaging films and labels.

Furthermore, Uje Rugove is committed to implementing higher environmental, health, and safety standards as part of this project.

The Head of Kosovo at the EBRD, Sergiy Maslichenko, expressed his satisfaction in supporting the agribusiness sector in Kosovo, particularly through an innovative ESG-linked financing agreement. This agreement with a market leader, Uje Rugove, is expected to make a positive impact on the industry.

Visar Kelmendi, Chair of the Board of Directors of Uje Rugove, highlighted the significance of this sustainability-linked loan for both the company and Kosovo as a whole. It demonstrates Uje Rugove’s dedication to reducing water consumption, minimizing packaging waste, and incorporating sustainable and recycled materials into its packaging. The company aims to set a standard for sustainability in the industry, showcasing how economic growth and environmental responsibility can go hand in hand.

ENEF II, supported by the European Union and bilateral donors, is part of the Western Balkans Investment Framework. It provides investment capital to high-growth companies committed to improving their ESG performance in the six Western Balkans economies.

The EBRD has provided €19 million to ENEF II, which is advised and managed by the bank. The fund aims to support small and medium-sized enterprises and mid-caps in the Western Balkans, and it has already raised €57 million in capital commitments from various investors, including the EU, Cassa Depositi e Prestiti development bank, and KfW development bank.

Kosovo’s agribusiness sector has great potential for growth, with sub-sectors such as the beverage industry already producing competitive quality products at a regional level. The EBRD has shown its commitment to Kosovo’s development by investing a total of €629 million in the country so far.

With the support of the EBRD and ENEF II, Uje Rugove is well-positioned to expand its operations, introduce new sustainable packaging solutions, and further enhance its environmental performance. This partnership sets an example for the industry and highlights the importance of sustainability in business growth.

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