One of the largest Western investors in Eastern Europe -- the Danish Investment Fund for Central and Eastern Europe -- released its annual report this week (Tuesday). The report shows the fund is still growing, and that it is embarking on some new ventures. RFE/RL correspondent Anthony Georgieff reports from Copenhagen.
Copemhagen, 21 April 2000 (RFE/RL) -- The Danish Investment Fund for Central and Eastern Europe says it invested in 27 new projects last year, with the biggest investment going to Poland. Other leading investment sites include Russia, the Baltic states, Slovakia, and the Czech Republic.
Over the 10 years of its existence, the fund has invested in hundreds of projects in 16 countries. Total investment since the fund was established approaches $2.3 billion.
Sven Riskaer is the fund's managing director. He says economic developments in Eastern Europe have encouraged Danish and other Nordic companies to invest.
"I would say that the economic development in Eastern Europe has been very, very encouraging, and consequently we have felt that also. The fund has been very active during the past 10 years."
The fund, which was established by the Danish government after the fall of the Berlin Wall in 1989, creates joint ventures between Danish or Scandinavian companies and Eastern European investors. Over the last 10 years, its activities in the region have resulted in the creation of more than 25,000 local jobs. Most of the projects involve sectors in which Danish industry has traditionally been strong, such as medicine, telecommunications, and environmental projects.
But Riskaer says that as the economy in Eastern Europe has developed, the investors and the kinds of projects they are interested in have changed.
"There is a clear tendency towards more greenfield projects, and not so many rehabilitation projects. There are larger and larger investments. In the beginning, many small businessmen from the West came to the Eastern European countries expecting they could find some nice opportunities. They found some, but mostly nowadays you see larger, well-established Western companies moving eastwards."
Four years ago, the Danish Investment Fund received extra government funds to create a separate investment facility for environmental projects. Operating on a budget of about $30 million, it has already started up more than 250 environmental projects. They include a pig-breeding farm in Poland that meets EU standards for environmental protection, and a project in Lithuania to filter smoke from an asphalt production plant.
Riskaer says the philosophy behind the fund's activities is a mixture of idealism and pragmatism. Through its investments in eastern Europe, Denmark is directly promoting the development of a free market and democratic institutions. And once the market economy becomes solidly rooted in the region, the Danish economy will benefit from increasing exports and further investment.
After 10 years in operation, Riskaer says, the fund hopes to expand its horizons. Although the number of projects in countries it already does business in will probably remain stable, it plans to invest more in each project. And although it has always focused on countries in Central and Northeastern Europe, Riskaer says the fund has started to look for opportunities in the Balkans and the Commonwealth of Independent States.
"The other trend that you see is that the easternmost parts of the region, which is basically the CIS states, are becoming more interesting. I would say that there have been certain setbacks in this trend because of the chaotic affairs in Russia. Hopefully, with [Russian] President [-elect Vladimir} Putin, this could change. We all need a strong and well-developed Russia, and I think that privatization, private capital, could make a big difference."
The Danish fund already has three investment projects in Belarus, and one each in Georgia and Ukraine. Riskaer says new ventures will only be set up in countries undergoing genuine political and economic reform. Companies seeking investment must send proposals in writing, either to the fund's headquarters in Copenhagen or to its offices in Warsaw. Once approved, loans are granted for up to five years.