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EBRD supports local industry in Bulgaria
€28 million loan helps Svilosa pulp mill expand, boosting competitiveness
The EBRD is lending Bulgarian pulp producer Svilosa AD €18 million, as part of
an overall €28 million package, to help double its production capacity and
strengthen its position as a regional leader in the pulp sector. The Nordic
Investment Bank is expected to lend the remaining €10 million.
The loan will also support substantial energy efficiency investments enabling
Svilosa, which is based in Svishtov in northern Bulgaria, to make significant
energy savings. It will also help the company achieve compliance with European
Union environmental standards.
The loan is in line with the EBRD’s new strategy for Bulgaria, expected to be
approved this month, to provide long-term financing to help domestic companies
become more competitive, and to meet EU environmental requirements. Olivier
Descamps, EBRD Business Group Director for southern and eastern Europe, said
this loan will help the Svilosa pulp mill expand and become more competitive
on a domestic, regional and international level, especially important for the
country as the EU accession date nears.
The project is also expected to have a significant demonstration impact. A key
challenge for local businesses in Bulgaria is gaining access to long-term
financing. This project should demonstrate that local companies with
consolidated transparent corporate structures and who work in accordance with
sound corporate governance principles can and should be considered for ten
year financing, said Mr Descamps.
Pulp and paper, a traditional sector in Bulgaria, has for years been
experiencing a decline. The loan is expected to support its revival by
doubling production at the mill, and help develop regional trade through
exports to countries including Turkey and Greece. The loan will maintain local
employment as the company expands, and local suppliers such as the wood
harvesting companies will benefit too.
The EBRD is the largest single investor in Bulgaria, having committed more
than €1.1 billion in 57 projects.
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