EIB" Group supports Bulgarian economy with €948 million in 2021"
The European Investment Bank Group (EIB Group), which consists of the European Investment Bank (EIB) and the European Investment Fund (EIF), provided loans, guarantees and equity commitments worth €948 million for projects in Bulgaria in 2021,This represents a 114% increase in total financing activities compared to 2020.
In a press conference held in Sofia today, Ivaylo Iaydjiev, Bulgarian Deputy Minister of Finance, and EIB Vice-President Lilyana Pavlova presented the impact of the EIB Group’s financing in Bulgaria in 2021 and discussed the strategic outlook for the EU bank in the year ahead.
In 2021, EIB lending in Bulgaria amounted to €176 million for sustainable infrastructure, green urban development and businesses. The EIF committed €772 million in new operations for small and medium-sized enterprises (SMEs). Total lending operations benefited 5 900 business and supported 126 000 jobs.
Support under the European Guarantee Fund (EGF) in Bulgaria is expected to unlock €2.7 billion for SMEs struggling under the impact of the COVID-19 pandemic. The EGF was set up by the EIB Group with contributions from Bulgaria and other EU Member States to shield companies suffering from the COVID-19 crisis.
EIB Vice-President Lilyana Pavlova said: “This last year continued to be challenging for the global and Bulgarian economy due to the COVID-19 pandemic. I am delighted that the EIB Group more than doubled its activities in the country compared to 2020. Nearly 6 000 businesses across Bulgaria benefited from finance with favourable conditions to sustain jobs and help companies to continue with their economic activities. In addition, the EIB played a key role in supporting sustainable infrastructure investments and through our advisory services we helped to get projects off the ground and make them bankable. I want to thank all our partners for the excellent cooperation for creating jobs and prosperity across Bulgaria.”
Deputy Minister of Finance Ivaylo Iaydjiev said: “The EIB plays a key role in the implementation of both the EU initiatives and the national measures, and we highly appreciate the Bank’s efforts to develop new financial instruments and to provide innovative, pragmatic and effective solutions tailored to countries’ specifics and needs in order to address the consequences from the pandemic and to further stimulate investment in the EU. We will continue counting on the EIB’s commitment to collaborate with the Bulgarian authorities and businesses in initiatives focused on the needs of our economy.”
For the second year in a row, the EU bank focused on fighting the COVID-19 crisis while increasing its financing for green projects. The EIB Group worked with partners in Europe and around the world to deliver a record €95 billion in financing, a 23% increase from 2020 (€77 billion). The EIB provided over €65 billion in loans, while the EIF provided just above €30 billion in guarantees and equity.
Financing hit the highest level in the EIB’s 63-year history, largely due to additional resources provided by the €24.4 billion European Guarantee Fund, which was established in 2020 with support from 22 EU Member States to help Europe’s economy (and in particular SMEs and mid-caps) deal with the economic impact of the COVID 19 pandemic.
The rise in financing volumes shows the key role the EIB Group has played in the European Union’s massive response to the pandemic. EIB Group loans, guarantees and other financing instruments have complemented national resilience programmes, supported local authorities and provided affordable finance to public and private companies. From healthcare to small businesses, sectors most affected by the pandemic have benefited from EIB support.
At the same time, the EIB Group has intensified investments in the twin green and digital transition, implementing the Climate Bank Roadmap 2021-2025 approved by the Board of Directors in November 2020. Financing for innovation, which will be key to the transition, reached a record €20.7 billion. The EIB has adopted new targets for lending to support EU cohesion policies, committing more funds for projects in Europe’s transition and less developed regions, where the green and digital transition could be more difficult. In the last five years, the EIB has provided €90.8 billion to projects supporting cohesion. For 2021 alone, this amounted to € 19.8 billion, equivalent to 41% of total EU signatures. This has significantly boosted the economies of cohesion countries, including Bulgaria.
Alain Godard, EIF chief executive, stated: “At the EIF, we are delighted to report a ten year record for our 2021 operations in Bulgaria. Today’s announcement sends an important signal about the EIF’s readiness to support small and medium enterprises in Bulgaria during the COVID-19 pandemic. Backed by the European Guarantee Fund, CFN will provide working capital to micro companies and SMEs to boost their competitiveness and growth. We stand ready to continue our long-standing partnership with Bulgarian businesses going forward.”
The Executive Director of CFN AD, Mr. Filip Genov stated: “Rarely a new fintech company has the opportunity to enter the market covering altogether a strong demand for a new financial instrument, an absolutely innovative technology and an equally innovative methodology for risk management. Providing new opportunities for working capital financing to companies in the Bulgarian infrastructure construction industry has been a long-due necessity. The penetration of factoring services in the industry still needs to catch up with the good European practices and with the support of the EIF we aim at increasing the financial cover, as well as at supporting the business of the SME companies. CFN will reduce by months the time in which these SMEs get paid, and the vast majority of them will have access to such financing for the first time. All that is delivered through the best mobile factoring solution available in the global fintech industry today."
