The European Investment Bank (EIB) Group on Thursday marked the 25th anniversary of its first loan in Bulgaria and re-confirmed its commitment to supporting the country’s economy via loans, the provision of advisory services, and through blending of its resources with EU grants.
Delivering a keynote speech at a conference on financial instruments in the construction sector, EIB Vice-President Vazil Hudak praised Bulgaria for successfully using modern means of financing, in particular financial instruments ranging from the SME Initiative – a layered EIB Group-EU guarantee tool mobilising loans from commercial banks – to instruments supporting energy efficiency.
“In 25 years, we have supported the Bulgarian economy with loans and guarantees for nearly EUR 5bn. We look forward to continuing this fruitful co-operation and focusing more and more on innovative methods of financing including combining EIB loans with EU grants. Bulgaria is among the regional frontrunners in this respect,” said VP Hudak, who oversees EIB operations in the so-called cohesion countries.
In 2017, the EIB Group is continuing to support the Bulgarian economy, with a more varied beneficiary base than before (corporate, sovereign and banking), and looking in particular to finance more projects benefiting from a guarantee provided by the European Fund for Strategic Investments (EFSI), the financing component of the Investment Plan for Europe.
In 2016, the EIB Group extended loans and guarantees of EUR 940m to Bulgaria, which became only the third EU country to implement the SME Initiative. The initiative, which involves risk-sharing between the EIB Group and the local banking sector, will mobilise substantial new loans to support projects promoted by small and medium-sized enterprises.
Last year, the EIB also provided a separate EUR 150m intermediated loan to the Bulgarian Development Bank AD to finance small and medium-scale projects promoted by SMEs and midcaps. It was the first EIB transaction supported by EFSI; with the potential to trigger some EUR 533m in new loans.
The EIB also provided SME credit lines under its “Skills and Jobs – Investing for Youth” youth employment programme, benefiting people under 25 years of age. The Bank signed such facilities with CIBANK JSC (EUR 50m) and Allianz Bank Bulgaria (EUR 30m). The projects financed are being implemented by companies offering vocational training and internships for young people or collaborating with a technical college, school or university.
To complement its lending activities, the EIB has provided extensive advisory services to public and private sector entities in Bulgaria, helping to speed up the implementation of key infrastructure projects and the absorption of EU funds. These services have been provided under a multi-annual Memorandum of Understanding with the country.
The EIB and Bulgaria have also signed a MoU under the European Investment Advisory Hub (EIAH) to enable Bulgaria to establish its own Advisory Platform, strengthening advisory services for local project promoters and public authorities.
The European Investment Fund – which together with the EIB forms the EIB Group – committed EUR 473m in three equity and 20 guarantee operations aimed at raising EUR 985m in new investments.
Photographer: Dusan Ondrejicka ©EIB
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