Kosovo-based food and drinks manufacturer Uje Rugove is to invest €6m ($6.3m) in expanding water production in the country.

A €6m “sustainability-focused” loan is being provided by the European Bank for Reconstruction and Development (EBRD) and the Enterprise Expansion Fund II Western Balkans (ENEF II), which is managed by EBRD.

Uje Rugove wants to broaden its product range and “become more competitive in the Kosovan and export markets”, the EBRD said in a statement.

The funds will be used to “purchase a new facility and install high-capacity production lines”, the agency added.

Just Drinks has contacted the company about the location of the new facility.

Uje Rugove’s existing bottling facility is in the Rugova mountain region in the city of Peja.

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The loan will be used to support three environmental initiatives: cut water losses during production; reduce packaging waste during production; and introduce into its packaging stretch film and labels that are made of at least 50% recycled polyethylene.

Visar Kelmendi, chair of the board of directors of Uje Rugove, said the investment marks a “pivotal moment” for the company.

“It showcases our unwavering dedication to reducing water consumption in our production, minimising packaging waste and incorporating sustainable and recycled materials into our packaging,” Kelmendi said.

The bank said in its statement Kosovo’s agribusiness sector has “great potential for growth, with sub-sectors such as the beverage industry and champions such as Uje Rugove offering competitive quality products at a regional level”.

Sergiy Maslichenko, head of the EBRD’s operations in Kosovo, added: “We are pleased to support the agribusiness sector in Kosovo by signing an innovative ESG-linked financing agreement for this project with a market leader.”

The Shkabaj-headquartered enterprise produces bottled water, cheese and yogurt under the brand name, Rugove.

ENEF II is part of the Western Balkans Investment Framework, supported by the EU and bilateral donors. It extends development and expansion capital to high-growth companies committed to improving their ESG performance in the six western Balkans economies: Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia

The fund has raised €57m in capital commitments from its investors.

To date, the EBRD has invested €629m ($662.8m) in Kosovo.