Bulgaria: EIB Group and United Bulgarian Bank sign agreement under InvestEU to guarantee more than €110 million in new loans for SMEs and small mid-caps

• UBB is the first financial institution in Bulgaria to sign an InvestEU guarantee agreement fostering competitiveness, innovation and sustainability projects.
• The collaboration is also expected to accelerate the green transition for many Bulgarian businesses.

The EIB Group and United Bulgarian Bank (UBB) today signed the first agreement under InvestEU in Bulgaria. EIB Vice-President Lilyana Pavlova, Executive Director Corporate Banking and Markets of UBB Dobromir Dobrev, and EIF Director and Head of Mandate Management Hubert Cottogni underlined the strategic importance of the agreement for the competitiveness of local companies.

According to the agreement, the EIF will provide guarantees for loans under three key policy areas. The competitiveness guarantee will support about €76 million of new debt financing for small and medium-sized enterprises (SMEs) to contribute to their competitiveness, growth and jobs. The sustainability guarantee will support about €24 million of new debt financing for SMEs and small mid-caps to contribute to Europe’s green transition. A further €10 million in loans under the SME innovation and digitalisation guarantee will support businesses that develop and introduce new products, services and processes.

EIB Vice-President Lilyana Pavlova said: “The European Investment Bank Group is glad to be a strategic partner of the European Commission in implementing InvestEU, which allows us to finance more innovative, higher risk projects. Together with our partners we will address market gaps and reduce the risk for third-party private or public investors, unlocking investment that has slowed down or been hindered by economic uncertainty. We appreciate UBB’s very proactive response to InvestEU — the first application in Bulgaria, and one of the first in the European Union. Today’s agreement will further increase the EIF’s and UBB’s cooperation in key EU policy areas and boost the competitiveness of Bulgarian business.”

Dobromir Dobrev, Executive Director Corporate Banking and Markets of UBB, said: “I am proud that after signing the first Juncker Plan transaction in Bulgaria back in 2015, seven years later our bank is once again the market front-runner with the InvestEU programme. I am even prouder that we are doing so for two companies that are part of KBC Group in Bulgaria — UBB, and also UBB Interlease. This new guarantee agreement embodies our successful long-term partnership. Today we are signing an agreement for more than €110 million in new loans and leases to support Bulgarian SMEs and small mid-caps as the first operation under InvestEU in Bulgaria. It will enable us to support the competitiveness of local companies, as well as to increase lending in the strategic areas of sustainability, innovation and digitalisation. We are certain the InvestEU programme will help Bulgarian SMEs and small mid-cap companies to accomplish their investment ideas, while accessing funds with preferential terms and less stringent collateral conditions.”

“We are delighted to be renewing our partnership with United Bulgarian Bank, this time under the InvestEU programme. This agreement is designed to channel financing to Bulgarian businesses to help them become more competitive and innovative, as well as to invest in the green and sustainable transition. Given the current energy challenges that we are facing across Europe, we are confident this collaboration can generate financial support that will allow these businesses to take important steps forward in the green transition,” said Hubert Cottogni, EIF Director and Head of Mandate Management.

Background information

The European Investment Fund (EIF) is a specialist provider of risk finance for small and medium-sized enterprises (SME) across Europe. It is part of the EIB Group. Its shareholders are the EIB, the European Union, represented by the European Commission, and a wide range of public and private banks and financial institutions.

The InvestEU programme provides the European Union with crucial long-term funding by leveraging substantial private and public funds in support of a sustainable recovery. It also helps mobilise private investments for EU policy priorities, such as the European Green Deal and the digital transition. The InvestEU programme brings together the multitude of EU financial instruments currently available to support investment in the European Union, making funding for investment projects in Europe simpler, more efficient and more flexible. The programme consists of three components: the InvestEU Fund, the InvestEU Advisory Hub and the InvestEU Portal. The InvestEU Fund is implemented through financial partners that will invest in projects using the EU budget guarantee of €26.2 billion. The entire budgetary guarantee will back the investment projects of the implementing partners, increase their risk-bearing capacity and thus mobilise at least €372 billion in additional investment.