The European Investment Bank (EIB) is providing EUR 80 million to UniCredit Leasing AD Bulgaria (ULB) to finance the projects of small and medium-sized enterprises (SMEs) and mid-cap companies in Bulgaria.
This intermediated loan also includes a number of new features in line with the EIB’s priority of modernising and strengthening its support for Europe’s SMEs to help mitigate the effects of the current credit market downturn. This takes the form of a new EUR 30 billion EIB package to assist SMEs, of which EUR 15 billion is earmarked for 2008/2009. These funds will be deployed in all EU Member States, including Bulgaria, through commercial loans. In this effort the Bank is also simplifying the reporting of intermediated loans and increasing their scope by providing higher funding possibilities and also covering the intangible aspects of investments. In addition, mechanisms will be enhanced to ensure the transfer of the advantage of EIB funds to the final beneficiary.
The new EUR 80 million loan for SMEs to ULB is an important part of this. The loan will serve to co-finance small and medium-scale projects in the areas of industry, services, tourism, environmental protection, energy and energy saving and infrastructure including health and education facilities. EIB funds will finance projects implemented by Bulgarian SMEs (firms with fewer than 250 employees) and – for a smaller portion of the loan – by mid-cap companies (firms with a maximum of 3 000 employees) and will improve their access to long-term finance. To these ends, the EIB is joining forces with well established financing institutions like ULB, which know the local market, have SMEs and mid-cap companies as their customers and possess a well developed network of branches.
The task of the EIB, the European Union’s financing institution, is to contribute to the integration, balanced development and economic and social cohesion of the Member States by financing sound investment. Since 1990, the EIB’s financing in Bulgaria has totalled approximately EUR 2.8 billion.
EIB loans to partner banks have been developed as a successful tool for providing long-term funding for financing smaller projects with total costs of up to EUR 25 million. Since 1990, signed loan contracts in Bulgaria have amounted to some EUR 2.6 billion out of which EUR 340 million (including the current loan) have consisted of funds to support SME and municipality investments in the country.