(AGENPARL) – gio 20 luglio 2023 PRESS RELEASE
2023-288-EN
20 July 2023
Bulgarian Development Bank and EIB sign €175 million loan to improve access to finance, boost employment and accelerate green transition
The loan will support Bulgarian companies affected by the disruption in supply chains, high prices and the war in Ukraine.
At least 20% of the financing will support the green transition, with a focus on renewable energy and energy efficiency projects.
In addition to the loan, InvestEU guarantees worth up to €45.5 million provided through the European Investment Fund will help BDB de-risk investment in sustainability, innovation, and digitalisation.
The European Investment Bank (EIB) and Bulgarian Development Bank (BDB) are joining forces with a €175 million loan to improve access to finance for small and medium-sized enterprises (SMEs) and mid-caps across Bulgaria.
BDB will work with commercial banks as intermediaries or will directly pass on the advantageous conditions of the EIB loan to SMEs and mid-caps, which are the backbone of the Bulgarian economy. SMEs represent 98% of the companies in Bulgaria and account for about 60% of the economic value added and 75% of employment, well above the European Union average. The Bulgarian government has approved state guarantees for the loan.
BDB will use the EIB financing to back companies affected by the disruption of supply chains, high energy costs and the war in Ukraine.
To support the green transition of the Bulgarian economy, in line with the European Green Deal objectives, the EIB loan to BDB includes a dedicated window earmarking at least 20% of the funds for climate action and environmental sustainability projects, with a special focus on renewable energy and energy efficiency investments. The EIB will also provide advisory support under its Green Gateway facility. This includes operational recommendations, the development of tools and manuals, and training courses to further expand BDB’s capacity in green financing.
Separately, under InvestEU guarantees of up to €45.5 million provided through the European Investment Fund (EIF), BDB and BDB Leasing will be able to improve the competitiveness of the private sector by facilitating access to finance to riskier SMEs that lack sufficient collateral. The arrangement is expected to generate fresh lending of about €77 million over a two-year period at preferential rates. It will boost investments contributing to the green and sustainable transformation of the Bulgarian economy. Support will also be focused on innovation and digitalisation of enterprises.
EIB Vice-President Lilyana Pavlova said: “At the EIB Group we are delighted to further strengthen our cooperation with the Bulgarian Development Bank, a long-time partner of ours, and join forces in supporting economic growth and accelerating the green and digital transition of the Bulgarian economy. Together, we are increasing companies’ access to finance, thereby boosting employment, the competitiveness of the economy and regional development.”
European Commissioner for Economy Paolo Gentiloni said: “SMEs are a key pillar of Europe’s economy. They play a crucial role in bringing innovative solutions to challenges such as climate change. This agreement will provide businesses with the necessary resources, supporting them to grow and create jobs, while continuing to contribute to the Bulgarian economy.”
Finance Minister Assen Vassilev said: I am pleased that like with the JEREMIE programme in 2013, these funds will now be able to reach the small and medium business as investment loans with low interest rates.”
“The signing of the agreement, at this moment, shows the increasing trust in Bulgaria by the European institutions to upgrade our partner relations. The direct benefit from the preferential financial conditions will act as an anti-crisis support for the business, struggling with the global trends of decreasing liquidity and rising financial costs,” said Bulgarian Minister for Innovation and Growth Milena Stoycheva.