EIF Signs €2 Billion Guarantee Agreements to Boost SMEs and Green Transition in Bulgaria

EIF Signs €2 Billion Guarantee Agreements to Boost SMEs and Green Transition in Bulgaria

(IN BRIEF) The European Investment Fund (EIF), a part of the European Investment Bank Group, has inked guarantee agreements with four Bulgarian banks, including Postbank (Eurobank Bulgaria), ProCredit Bank Bulgaria, UniCredit Bulbank, and United Bulgarian Bank, facilitating up to €2 billion in financing. These guarantees, supported by the InvestEU Member State Compartment for Bulgaria and resources from Bulgaria’s Recovery and Resilience Plan, will enhance access to favorable financing for small and medium enterprises (SMEs) and promote the green transformation of the Bulgarian economy. The initiative includes two financial instruments, the SME Competitiveness Guarantee and the Sustainability Guarantee, aimed at boosting SME resilience, productivity, and investments in climate action, energy efficiency, and renewable energy.

(PRESS RELEASE) LUXEMBOURG, 31-Jan-2024 — /EuropaWire/ — The European Investment Fund (EIF), part of the European Investment Bank Group (EIB Group), has signed guarantee agreements with four Bulgarian banks that will facilitate up to €2 billion in financing to underpin the sustainable growth and competitiveness of small and medium enterprises and contribute to the green transformation of the Bulgarian economy.

The series of capped portfolio guarantees is backed by the InvestEU Member State Compartment for Bulgaria. The deal is also making use of resources under Bulgaria’s Recovery and Resilience Plan (RRP). EIF guarantees will free up lending space for commercial banks in the country, allowing them to extend more financing to businesses under favourable terms.

The EIF will extend the guarantees to Postbank (Eurobank Bulgaria), ProCredit Bank Bulgaria, UniCredit Bulbank and United Bulgarian Bank, leading lenders in the country and long-term partners of the EIB Group. The guarantee operations mark the effective launch of two financial instruments, each with a budget of €75 million under the Recovery and Resilience Plan in Bulgaria.

The Republic of Bulgaria, represented by the Bulgarian Ministry of Innovation and Growth, has entrusted the EIF as an implementing partner for the two portfolio guarantee instruments in its Recovery and Resilience Plan. The capped guarantees would be financed by the Recovery and Resilience Facility. The instruments are an important tool to advance Bulgarian businesses’ competitiveness, boost economic growth and foster a greener future.

Minister of Innovation and Growth Milena Stoycheva said: “The partnership with the European Investment Fund underlines our commitment to enhancing the economic landscape of Bulgaria. Since the inception of the JEREMIE mandate in 2009, this collaboration has been a cornerstone in transforming our economy. We see the financial instruments under the Recovery and Resilience Plan as the next chapter in this success story. Through these guarantees, we are not only fostering the adoption of climate action investments but also strengthening the resilience and competitiveness of our small and medium enterprises. These efforts signify a pivotal step towards a sustainable and prosperous future for Bulgaria.”

Under the SME Competitiveness Guarantee the banks will provide loans on preferential terms to small and medium enterprises to help strengthen their resilience and increase their productivity amid economic uncertainty. The Sustainability Guarantee will target investments in climate action, energy efficiency and renewable energy by small and medium businesses and housing associations in support of the transition to the green economy.

EIF Chief Executive Marjut Falkstedt said: “Thanks to the excellent cooperation with the Bulgarian authorities and our partner banks in the country, the EIF has been able to deploy the financing from these guarantee instruments in record time. Today’s agreements will empower small and medium businesses to expand and modernise their operations, contributing towards a greener future.”

In November, the EIF successfully launched another financial instrument it manages under the Smart Industry component of Bulgaria’s RRP – the €180 million Recovery Equity Fund of Funds of Bulgaria, aimed at providing equity financing for innovation, infrastructure and growth of Bulgarian businesses.

Background information

The EIF is part of the EIB Group together with the European Investment Bank. It supports Europe’s small businesses by improving their access to finance through a wide range of selected financial intermediaries such as banks, guarantee and leasing companies, micro-credit providers and private equity funds. The EIF designs and offers equity and debt financing instruments fostering EU objectives in support of entrepreneurship, growth, innovation, research and development, the green and digital transitions and employment.

About the InvestEU Member State Compartment

The InvestEU Member State Compartment enables the Member States to contribute part of their shared management funds, resources from the Recovery and Resilience Facility, and national resources to the InvestEU Fund by setting up a dedicated Member State Compartment. With this voluntary contribution, Member States can leverage on the InvestEU guarantee to support specific national priorities. Under the Member State Compartment, loans, guarantees or equity investments can be offered as a complement to other public and private investments.

Media Contacts:

EIB:
Tsvetelia Tsolova
t.tsolova@ext.eib.org
tel.: +359 888 311 435

Website: www.eib.org/press
Press Office:
press@eib.org

MIG:
Dessislava Koleva
press@mig.government.bg

Website: www.mig.government.bg

SOURCE: European Investment Fund