The 2010 investments of the European Bank for Reconstruction and Development in Bulgaria will reach the record annual figure of EUR 500 M, announced Stefka Slavova, an EBRD director.
A delegation of the EBRD Board of Directors completed Friday its four-day visit to Bulgaria organized to get up-to-date information on developments in one of the bank's countries of operation.
"In 2010 to date we have signed investment contracts in Bulgaria for EUR 341 M - these are mostly loans to financial institutions and the corporate sector. By the end of the year, this figure will have reached EUR 500 M, which a record, since EBRD's annual investments in Bulgaria have been up to EUR 200-230 M so far," explained Stefka Slavova, the EBRD Director for Bulgaria, Poland, and Albania.
"Because of the crisis, we expanded our investments here. These are not just credits but sometimes also business guarantees, and business consulting," said Herbert Jung, Alternate EBRD Director for Germany.
Slavova announced that the EBRD will provide a total of EUR 300 M for credit lines to three Bulgarian branches of Greek-owned banks - the United Bulgarian Bank (UBB, owned by the National Bank of Greece), Pireaus Bank, and Eurobank EFG.
EBRD signed contracts with Pireaus Bank and Eurobank EFG last week, and the deal will the UBB is expected by the end of October. The first transfer of EUR 150 M under the agreements will be granted to the three banks by the end of 2010, and the second half of the money is expected next year.
The funds for the Bulgarian branches is part of a EUR 1 B EBRD package for propping up the Greek banks.
"The money will be mostly for crediting. These are not funds for the recapitalization of these three Greek banks, these are resources for the crediting of small and medium-sized enterprises. These banks are in a good condition at the moment and don't need recapitalization. All three of them have the largest market shares in Bulgaria, and operate in the entire Balkans. They are present in Romania, Serbia, Albania. If the funds are not absorbed, the second transfer could be canceled. The board will consider the second transfer in 2011, most likely," explained Slavova.
The EBRD delegation met with the Bulgarian authorities, including the President Georgi Parvanov, Prime-Minister Boyko Borisov, Finance Minister Djankov, and other members of the Bulgarian government. The EBRD directors also held meetings with representatives of local NGOs, international financial organisations operating in Bulgaria, as well as representatives of the business and diplomatic communities.
"In its strategy for the following years, the bank will prioritize on funding energy and energy efficiency, municipal projects, private projects of financial institutions and plants. We are going to try to find a strategy to help Bulgaria achieve a more developed economy and increase its standard of living. We think that there will be a change in 2011 - we hope that the demand in Europe will be big enough so that the Bulgarian economy can benefit from it," said Herbert Jung.
Another EBRD expert, Daniel Berg, said it is essential that Bulgaria focus on reducing energy consumption in industry and rehabilitation of apartment buildings. The bank directors have sough ways to make energy efficiency economically attractive to Bulgarian households.
An EUR 15 M loan for a project for the rehabilitation of 300 streets in the Bulgarian city of Plovdiv is still under consideration, the EBRD experts said, pending an examination of the traffic in the southern Bulgarian city.
The loan in question became problematic in the past few months as Plovdiv Mayor Slavcho Atanasov accused the Cabinet and Finance Minister Simeon Djankov of hindering the project as a means of a political assault on him.
To date, the EBRD has invested a total of about EUR 2 B in Bulgaria in various forms.