BREZOVICA AT A GLANCE

The last great opportunity in the Balkans

Vienna, October 2007

Investment Promotion Agency of Kosovo - IPAK Economic Initiative for Kosova - ECIKS ZVR-Zahl 516893686 Nussdorfer Strasse 20/23, A 1090 Wien, Tel.: +43 (01) 890 50 26 Fax: +43 (01) 890 50 26 26 Web: http://www.eciks.org, http://www.ipak-vienna.org, E-Mail: info@eciks.org, info@ipak-vienna.org

Brezovica at a Glance

ECIKS/IPAK

Kosovo a general overview

Tremendous progress has been achieved in Kosovo in all fields since the end of the conflict in 1999. With assistance of international community, including United Nations, USA and European Union, Kosovars have built their democratic institutions and have set the basis for sustainable economic development. Kosovos legal system was built on a completely new basis and is the only one in the region to be EU-compatible. The Kosovo of today has modern business support institutions, a sound banking system, a simple and straightforward tax system, a liberal trade regime, and a well skilled labour force. With its main asset the young, multilingual and highly educated population with high entrepreneurial spirit Kosovo is increasingly becoming very attractive to foreign investors. The 1999 conflict has left Kosovos economy in disarray. After the conflict, Kosovo was put under United Nations Administration (United Nations Interim Mission in Kosovo - UNMIK) and has grown to be a stable and predictable democracy. The UNMIK mission is concentrated in four pillars: police and justice, civil administration, democratisation and institution building and reconstruction and economic development. During the recent years, most of the competencies in all fields have been taken over by Kosovo Government and its institutions. With the final status of Kosovo to be resolved very soon, the last obstacle for the economic development and the continuous inflow of foreign investments is removed. Kosovo offers today great investment opportunities. National Treatment for foreign investors, the Euro as official currency, a central position in the region and the already mentioned young, educated and dynamic population, are only few of many reasons to consider investing in Kosovo. Many known international companies, such as Raiffeisen, Uniqa, Wiener Stdtische, Xella, Telekom Slovenija, Holcim, Nova Ljubljanska Banka, Strabag, etc. have already invested and are making profits in Kosovo. The Kosovo of today is completely different from the one you might remember from media coverage of the conflicts of last decade. We invite you to learn more about it. The Investment Promotion Agency of Kosovo and its office in Vienna will be at your service. Welcome to Kosovo.

ECIKS/IPAK

Vienna, October 2007

Brezovica at a Glance

ECIKS/IPAK

The Sector of Winter Tourism

Taking into consideration the current and foresighted trends that prevail in the global tourism sector, Kosovo has the real resources needed to compete in the international tourism market. With its different sport, recreational and wellness facilities located throughout the country, Kosovo offers a wide range of tourism attractions. One of the most important tourism resorts is the Brezovica Ski Centre, which is presented in more detail below in this document. The second and even larger Mountain complex in Kosovo is Bjeshkt e Nemuna also known as Albanian Alps. Located among the border with Albania and Montenegro, this complex reaches a maximum height in Gjeravica with 2656m and represents a tourism region with the highest potential in Kosovo. The beautiful landscape and nature areas, the high capacity for the admission of visitors and the wide range of cultural monuments create innumerable possibilities for the development of tourism. According to the estimations, "Albanian Alps" have a capacity and sufficient ground for 30,000 winter tourism visitors. Kosovo is in addition blessed with numerous wellness and thermal water sources that are known throughout the region for their recreational and health qualities. Foreign investments and know-how can easily turn this potential into profit bringing industry. Apart from the above-mentioned tourism potentials, Kosovo is generally rich on mountains, rivers and artificial lakes and therefore also offers prime possibilities for hunting and fishing.

Brezovica at a Glance

ECIKS/IPAK

Brezovica Skiing Resort

The Ski-Resort Brezovica is located in the furthest south of Kosovo, on the north face of Sharr Mountain range between Kosovo and Macedonia. It was established in 1983 in order to develop the winter tourism in this region.

Figure 1: The geographical location of Brezovica in Kosovo The site of many International Ski-Federation races in the 1980s and 90s, the Brezovica Ski Centre represents one of the last remaining yet-to-develop ski areas in south-eastern Europe. The Kosovo Trust Agency (KTA), after receiving the green light from the UN-Headquarters in New York and in cooperation with the current management of Brezovica as well as with the Municipality of Shtrpce, where the resort is situated, is expected to announce during October the tender for the privatisation of this Ski-resort. The due-diligence period is expected to last for around 2 months and the biding will most probably take place in the early weeks of 2008. The KTA aims at targeting suitable investors and developers with a proven record of accomplishment in large-scale real estate development. The complex includes three localities: 1. Brezovica settlement, 900 m above the sea level, 2. Trsenja (the footage of the mountain massif), 1200 m above the sea level; 3. Ski Centre 1700 to 2500 m above the sea level. Each of these localities has specific advantages and resources for the development of various tourism features in addition to their winter tourism potential. Taking into account the topographical surface, the abundant precipitation, the rich vegetation and fauna, Sharr Mountains provide an excellent potential for complementary exploitation and the development of the following tourism activities also: leisure activities, mountain climbing, fishing and various other activities in healthy conditions.

Brezovica at a Glance

ECIKS/IPAK

Brezovica represents a remarkable investment opportunity for financial investors and operators offering unique advantages and an all-inclusive offer for its large and densely populated market. The position of Brezovica in relation to the main tourism routes, destinations and market potentials is exceptionally favourable, since it is surrounded by relatively large cities like Prishtina, Prizren, Skopje, Gjakova, Tetovo, Peja and it is in the proximity of Greece, Macedonia, Serbia and Albania. The main road Doganovi-Prizren passes through Brezovica and the nearest railway station is only 20 km far from the skicentre. The Ski-Centre lies conveniently between two major international airports, the Prishtina International Airport (60 km) and the Skopje International Airport (70 km) in Macedonia. Transfer times for passengers arriving on international flights to either Skopje or Prishtina airports are less than two hours.

Slopes and Skiing Possibilities

With the typical features of Alpine mountains and the most slopes facing northwest, Brezovica enjoys a lengthy ski season, due to base and peak elevations, offering skiing opportunities of at least 128 days per year. The ski slopes have a full northern exposure and the ski area ranges from 1700 to 2500 m above the sea level. Therefore, the skiing location is usable from December until the end of April, which is of exceptional importance for the duration of the high season and commercial exploitation of the already installed capacities. Slopes for slalom and giant slalom have been officially registered by Federation Internationale de Ski - FIS with exceptionally high points because Brezovica fulfils all the prescribed norms and standards. Currently Brezovica has transportation utilities with the capacity to optimally carry 10.000 persons per hour. In particular Ski seats have a capacity of 6.080 people per hour while the Ski-lifts have a capacity of 3.900 people per hour. The transportation utilities include: 1 single seat cable car with fixed earth terminal; 2 double seat cable cars with fixed earth terminal; 3 plate type ski-lifts; 2 anchor type ski-lifts; 1 train with two cabins - cable railway

Brezovica at a Glance

ECIKS/IPAK

Figure 2: Slope and Ski-lift Map 1

Figure 3: Slope and Ski-lift Map 2 In addition, the Brezovica Complex offers an excellent year-round potential for hiking, swimming, other summer sports, and cultural events.

Brezovica at a Glance

ECIKS/IPAK

Hotel and Restaurant Facilities

The Brezovica Ski Centre has 680 beds in 3 hotels (Breza: 80, Narcisse: 300, and Molika: 300). Additional accommodation possibilities exist in independent hotels and private facilities. Hotel clients have free transportation and free access to ski lifts. In addition, Brezovica Ski Centre has 1200 seats in four principle restaurant facilities. In Brezovica there is additional land available for substantial new development of the complex an area comprising approximately 230 hectares.

Hotel Narcisse

Hotel Molika

Restaurant Molika

Restaurant Molika

The Stone House

Figure 4: Restaurant and Hotel facilities in Brezovica

Brezovica at a Glance

ECIKS/IPAK

Market potential
Total population in targeted market segments is estimated to be 2.4 million customers. This estimation includes potential customers from neighbouring countries like Albania and Macedonia but excludes potential tourists that can be attracted from abroad.
1400000 1200000 1000000 800000 600000 400000 200000 0

Kosovo

Albania

Macedonia

Figure 5: Market potential of Brezovica Having in mind the long tradition of the winter tourism in Kosovo a wide clientele of visitors from the region already exists. Due to its climatic and geographic conditions Brezovica was once one of the most important skiing resorts in Ex-Yugoslavia and based on that it attracted a very high number of winter tourists. Although currently the majority of the visitors come from the local urban centres and the near regional centres, there is a positive trend in visits from international skiers. Based on the collected data the structure of Brezovica visitors currently is as following table shows:

International ski customers; 6%

Local ski professionals ; 33% Local ski amateurs ; 61%

Figure 5: The structure of customers 8

Brezovica at a Glance

ECIKS/IPAK

In addition to the figures shown above, it is expected that the number of international clients coming from the neighbouring and EU-countries will further increase from currently 6%. Moreover, there are a large number of foreigners in Kosovo working in various organizations such as UNMIK, KFOR and other international organizations and NGOs which represent an interesting economic potential thus increasing the demand for the tourist market. There is no other ski centre which could become a serious rival to Brezovica.

Current price structure

The current price structure (prices during 2005) and additional statistical information are shown in the tables below. Hotels
Nr 1 2 3 4 5 Description Single Room half board Double Room half board Three bed room half board Sporting activities Conference room - Daily/fee Fees /person 38 25 30 17 25 50 200

Restaurants Nr Facility 1 Narcis Hotel 2 Molika Hotel 3 Breza Hotel 4 Bernare Restaurant Ski-lifts Nr Description of Ski-lift services 1 One lift 2 1-day pass 3 2-day pass 4 3-day pass 5 7-day pass 6 Seasonal pass

Places 600 400 120 80

2 10 18 25 70 400

Brezovica at a Glance

ECIKS/IPAK

Average client price per day Package/person Quantity One Weekend Hotel half board Ski pass 3 days Ski rent TOTAL 2 1 3

Euro 25 20 10

Total 50 20 30 100

Per day 50.00

One Week Hotel full pension Ski pass 7 days Ski rent TOTAL 7 1 7 25 60 10 175 60 70 305 Per day 44

A strategic Vision for Brezovica

Year-round resort, including winter and summer sports, conferences, and music festivals Significant potential for new sub-developments under the control of a master developer Renovation or replacement of the nine ski lifts Major new hospitality projects, in addition to the renovation of existing facilities New residential accommodation for longer-term visitors Architectural standards in keeping with the traditions of the region Restrictions on building height and limits on the use of available land area Possible self-sufficiency in electric power, taking advantage of local hydro-electric potential

Keys to Success
1. Brezovica has exceptional natural conditions for skiing (Slopes for slalom and giant slalom recognised by IFS) 2. It has a good geographical position 3. An existing customer base and 4. An existing infrastructure.

10

Brezovica at a Glance

ECIKS/IPAK

Picture Gallery

11

Brezovica at a Glance

ECIKS/IPAK

12

Brezovica at a Glance

ECIKS/IPAK

13

Brezovica at a Glance

ECIKS/IPAK

14

Brezovica at a Glance

ECIKS/IPAK

15

Brezovica at a Glance

ECIKS/IPAK

16

Brezovica at a Glance

ECIKS/IPAK

References: 1. Business Environment in Kosovo, Investment Promotion Agency of Kosovo, Office in Vienna, Implemented by ECIKS, March 2007 2. Leaflet on Strategic Sectors in Kosovo, Principal business and industrial sectors, Investment Promotion Agency of Kosovo, Office in Vienna, Implemented by ECIKS, July 2007 3. Development of Tourism in Brezovica Region, KDA Business Development Centre, August 2004 4. Brezovica Ski Resort An excellent opportunity, Kosovo Trust Agency, 2006 5. ECIKS, Dobruna, Kujtim et al., Potentialanalyse Kosovo zur Umsetzung des Intrumentes Unternehmenspartnerschaften innerhalb des Sektors/Im Bereich Wirtschaft und Entwicklung im Kosovo, Economic Initiative for Kosova ECIKS, December 2005

17