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€35m for rural finance, SMEs and energy savings in Bulgaria
The EBRD is breaking new ground in Bulgaria by supporting entrepreneurs
working in the country’s rural sector and helping local small and medium-sized
enterprises (SMEs) gain access to lease finance. A series of loans worth €35
million – via two local banks and a local leasing company – includes support
for industrial companies wishing to make savings by reducing energy losses.
Under its first leasing deal in Bulgaria, the EBRD is lending Hebros Leasing,
a subsidiary of Hebros Bank, €5 million to provide lease financing of up to
€125,000 to SMEs wishing to acquire equipment to expand their businesses. The
Bank is also lending Bulgaria’s third largest bank, United Bulgarian Bank, €10
million to lend up to €125,000 to entrepreneurs operating in rural areas, also
enabling them to grow; it is the Bank’s first rural financing project for SMEs
in the EU member and candidate countries where the EBRD operates.
These loans are being provided through the leasing and rural financing windows
of the EU/EBRD SME Finance Facility, a programme of the European Commission in
cooperation with the EBRD to promote SME growth and development across the new
EU countries, as well as Bulgaria and Romania. In addition to the EBRD loans,
the EU is providing grant money to help implement the projects.
The Bank is also lending Bulgaria’s second-largest bank, DSK Bank, €10 million
from a €50 million EBRD energy facility to promote energy efficiency and
renewable energy projects in local private-sector businesses. DSK will on-lend
loans to industrial enterprises to improve energy efficiency by, for example,
introducing better energy-consumption, automation, control and heat-recovery
systems, and to promote the use of renewable energy fuels. The bank is also
borrowing €10 million from the EBRD under the EU/EBRD SME Finance Facility as
part of the Bank’s continuing commitment to support entrepreneurs.
John Chomel-Doe, the EBRD’s Director for Bulgaria, said these four deals are a
clear commitment of the EBRD’s support for Bulgaria. Entrepreneurs, whether
they work in rural areaa, use lease finance or need loans to expand their
businesses, are of crucial importance for economic growth. At the same time,
the Bank is helping companies reduce energy losses, benefiting both their
businesses and the environment, Mr Chomel-Doe said.
The SME Facility was launched in 1999 under the EC’s Phare Programme, the main
channel for the EU's financial and technical cooperation with the new member
countries of central and eastern Europe. The budget earmarked for Phare as a
whole is about €1.5 billion a year. The EBRD energy facility was set up in
March 2004 and was prepared in conjunction with Bulgaria’s Ministry of Energy
and Energy Resources. Around €10 million is being provided in grant financing
from the EBRD-managed Kozloduy International Decommissioning Support Fund, set
up in 2000 with donor funds from the EU and a number of EU member countries,
as well as Switzerland, to help decommission part of the Soviet-era nuclear
plant and address issues resulting from the decommissioning by improving
energy use in Bulgaria.
The EBRD, the largest investor in Bulgaria, has invested nearly €1 billion in
68 projects. To build on this, the EBRD is expected to sign a project in the
coming days that will benefit the country’s energy sector and environment.
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