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EBRD in €15 million loan to Bulgaria’s UniCredit Bulbank for energy efficiency projects
Credits part of wider EU financing facility for Bulgaria and Romania
The EBRD has agreed a loan of €15 million for Bulgaria’s UniCredit Bulbank for on-lending to private industrial companies in Bulgaria to finance energy efficiency projects.
The loan to UniCredit Bulbank is part of the EU/EBRD Energy Efficiency Facility which is a wider joint programme of the European Commission and the EBRD to provide up to €100 million in credits to banks involved in lending for energy efficiency projects in Bulgaria and Romania. The programme is complemented by €24 million of EU grant funding from the Phare programme*, which will be used for technical assistance to support energy efficiency projects and for other incentives for both the banks and businesses involved. The incentive for the companies receiving loans under this Framework will be 15 percent of the financing under the EU/EBRD programme.
This credit line between EBRD and UniCredit Bulbank takes the funds from the EU/EBRD Energy Efficiency Facility available to the Bulgarian businesses to EUR 20 million.
The loans are expected to help overcome obstacles to investment in energy efficiency projects that persist in Bulgaria. By financing investments via the banking system, the funds should reach a wide range of businesses in the private industrial sector. The Bulgarian government has already undertaken several key measures to combat energy wastage in the country. Energy consumption per unit of GDP remains, nevertheless, well above the average for other EU states and Bulgaria has a vast potential to achieve significant energy efficiency gains in a cost-effective manner.
The EBRD has supported the Bulgarian government’s drive to increase energy efficiency with a number of investments. Recent projects have included credits to finance hydro power plants, credits lines to banks for residential and industrial energy efficiency projects with the support of the Kozloduy International Decommissioning Support Fund and supporting the carbon trading market linked to renewable energy projects.
James Hyslop, EBRD’s Director for Bulgaria, said that this credit line is an important element of the Bank’s Sustainable Energy Initiative as it will further increase investments in energy efficiency. A large number of clients will be able to benefit from this energy efficiency credit line through the broad branch network of UniCredit Bulbank, which will underpin the success of the facility in achieving its targets for improving the energy efficiency and cost-effectiveness of the Bulgarian economy, he said.
Levon Hampartzoumian, Chairman of the Management Board and CEO of UniCredit Bulbank, said that UniCredit Bulbank is a key player in the development of energy efficiency and renewable energy projects in Bulgaria, having already successfully completed 21 corporate projects amounting to €17 million under the Bulgarian Energy Efficiency and Renewable Energy Credit Line Framework. The continuing cooperation with the EBRD will further benefit our clients and improve the competitiveness of the Bulgarian economy on the EU market, Mr Hampartzoumian said.
The EBRD is one of the largest investors in Bulgaria with some €1.5 billion committed to projects across the country. Working with its many partners, the Bank has mobilised more than €5.8 billion for projects in Bulgaria.
UniCredit Bulbank, member of the European UniCredit Group, is the biggest Bulgarian bank with assets of about BGN 8 billion. The bank serves over one million active clients through one of the widest banking networks in Bulgaria.
* The Phare programme is the main channel for the EU’s financial and technical cooperation with accession countries. For further information, see: http://europa.eu.int/comm/enlargement.
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