The volume of lending from the European Investment Bank Group (EIB Group), which includes the European Investment Bank and the European Investment Fund (EIF), to Bulgaria more than doubled last year to EUR 1.11 billion. The new EIB Group funding is expected to mobilise EUR 5.4 billion in investment and contribute to building a technologically advanced, environmentally friendly and sustainable economy. This was announced by the EIB during the presentation of the Group's 2023 financial results at an event at the House of Europe in Sofia on Wednesday.
"We had a very strong year in Bulgaria," said EIB Vice-President Kyriacos Kakouris at the presentation. “The demand for our financing has grown exponentially. We provide our expertise and our long-term funding at preferential terms to support the resilience and competitiveness of Bulgarian private businesses and public entities.”
Almost all of the support in 2023 was provided for projects to bring Bulgaria's social and economic performance in line with the rest of the European Union. Nearly a fifth of the funds are invested in climate and environmental sustainability measures. The EIB Group's activities over the past year have supported nearly 8,000 small and medium-sized enterprises (SMEs) and mid-cap companies, the international financial institution reported.
The group's financing for Bulgaria in 2023 amounted to 1.17% of gross domestic product (GDP) and this puts the country among the top three EU countries according to this indicator, along with Estonia and Romania.
The EIB deepened its cooperation with the Bulgarian Development Bank (BDB) with the signing of a EUR 175 million loan agreement to provide SMEs with access to new financing to boost their productivity and accelerate their green transformation.
For the first time in 2023, the Group also signed a synthetic securitisation agreement with ProCredit Bank Bulgaria, which will free up resources enabling ProCredit to originate EUR 416 million of new loans. Nearly 30% of the funds are earmarked for environmental projects.
In 2023, Bulgaria became the second country in the EU with which the EIF signed guarantee agreements under the National Recovery and Resilience Plan. They are with four Bulgarian banks (UBB, UniCredit Bulbank, ProCredit Bank Bulgaria, and Postbank). The agreements are expected to unlock up to EUR 2 billion in new bank financing for SMEs and mid-cap companies.
Last year, the EIB also signed a EUR 12.8 million loan agreement with the Municipality of Burgas to co-finance Bulgaria's first children's hospital. The hospital is planned to serve more than 220,000 children in southeastern Bulgaria.
In the private sector, the EIB's activities include the bank's first corporate transaction under the InvestEU programme for a EUR 50 million loan to the Buildcom group. The funds are for the construction of a grain terminal at the port of Varna. A EUR 35 million loan has also been granted to Agria Group Holding to be used for the construction of a new sunflower oil processing plant, to optimise the company's operations and support access to external markets.
Under the EUR 40 million loan agreement with Eldrive Holding, around EUR 6.8 million is earmarked for the installation of over 1,000 new charging stations for electric vehicles in Bulgaria.
"The Energy Agency of Plovdiv became the first Bulgarian company last year to receive technical assistance under the European Local Energy Assistance programme to improve the energy efficiency of 46 public and private buildings in the city.
The EIB also noted its continued cooperation with the Bulgarian authorities on 32 commitments under the Joint Assistance to Support Projects in European Regions programme. It provides practical assistance for EU-funded investment projects.
In addition to the report on the EIB Group's activities in Bulgaria in 2023, the results of the EIB Investment Survey for last year were presented at the event.
Corporate investment in the country has recovered, with 70% of the country's firms making similar expenditures in 2022, the survey results showed. This is an increase of 61% on the EIB's 2021 survey, but the indicator remains below the EU average of 85%. This leads to the conclusion that investment in Bulgaria has yet to reach the level before the global financial crisis of 2008.
On the weather transition front, 56% of Bulgarian firms surveyed indicated that weather conditions had affected their business activities, up 44% from a year earlier. However, most representatives of Bulgarian companies viewed the transition to stricter climate standards and regulations as a risk to their operations (30%) rather than an opportunity (13%).
/RY/
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