Bulgaria: EIB to provide advisory support to enhance the work of state-owned development financial institutions

• EIB to review the activities of Bulgarian Development Bank and Fund Manager of Financial Instruments in Bulgaria
• Assessment to identify financial market gaps and outline streamlining opportunities
• EIB to offer best practice recommendations to strengthen institutions’ governance and impact

The European Investment Bank (EIB) will provide advisory support to the Bulgarian Ministry of Innovation and Growth to improve the efficiency of the development financial institutions under its supervision so that they can better support the Bulgarian economy.

Under the InvestEU Advisory Hub, the EIB advisory services, with the support of external experts, will carry out a detailed assessment of the activities of the Bulgarian Development Bank (BDB) and the Fund Manager of Financial Instruments in Bulgaria (FMFIB).

The EIB will assess the need to streamline and possibly reorient some of the activities of the BDB and the FMFIB that may overlap with or already be covered by market stakeholders. The analysis will look at opportunities for the two institutions to intervene in new sectors, such as the energy transition or social infrastructure, which may be underserved in terms of market financing.

The assessment will also identify potential corporate inefficiencies and governance issues and propose areas of improvement to increase the stability and independence of the development finance institutions, based on international best practices. This could reinforce their capacity to leverage additional financing from the EIB Group.

EIB Vice-President Kyriacos Kakouris, who oversees EIB advisory services and operations in Bulgaria, said: “We have an excellent partnership with the Ministry of Innovation and Growth and we are happy to provide our expertise. This agreement will benefit greatly not only the financial institutions by enhancing their performance, but the whole business environment in the country. We hope this work will pave the way for future partnerships to accelerate green and digital transition of the Bulgarian economy.”

Milena Stoycheva, Minister of Innovation and Growth, said: “This collaboration with the EIB is a pivotal step toward refining our development financial institutions. We are confident that the assessment and the recommendations by the EIB will be instrumental in optimising the approach of BDB and FMFIB, aligning it with global best practices. Through this exercise, we endeavour not only to bolster the governance and efficiency of these institutions but also to enhance their ability to contribute to Bulgaria’s economic growth.”

Background information

The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals. The EIB offers a large range of advisory services, available for public and private project promoters. The EIB advisory services support project development and public authorities and work to improve access to finance and the business environment in general.

The InvestEU Advisory Hub is the central entry point for project promoters and intermediaries seeking advisory support and technical assistance related to centrally managed EU investment funds. Managed by the European Commission and financed by the EU budget, the Invest EU Advisory Hub is part of the InvestEU programme.

The Ministry of Innovation and Growth is vested with the mission of supporting the competitiveness of the economy to ensure the growth and development of the regions in Bulgaria, and to promote and accelerate innovation and investment throughout the country and in all sectors of the economy.

The Bulgarian Development Bank (BDB) is a credit institution that is wholly owned by the Bulgarian state. It was established in 1999 as the Encouragement Bank with its main focus being to support small and medium-sized enterprises. It is the only Bulgarian bank to provide direct financing as well as financing via other credit institutions.

The Fund Manager of Financial Instruments in Bulgaria EAD (FMFIB) operates as a fund of funds. It allocates targeted public funds from European Union programmes and national co-financing using special financing schemes (financial instruments). FMFIB is a single shareholder company wholly owned by the Bulgarian state. The rights of the state are exercised by the Minister of Innovation and Growth.