Tsanko Arabadzhiev: The Bulgarian Development Bank Can Be the Mechanism That Puts Private Capital to Work
Bulgaria’s challenge is not a shortage of capital, but the lack of mechanisms to put that capital to work. This was stated by Tsanко Arabadzhiev, Chief Executive Officer of the Bulgarian Development Bank (BDB), during the sixth edition of Green Transition, the largest forum in Central and Eastern Europe dedicated to sustainable development and green transformation.
According to him, long-term economic growth is impossible without effectively channeling domestic capital into productive investments, and BDB can serve as the instrument to make this happen.
“For years, our country has relied on two engines of growth – European funding and bank lending. However, neither of them is sufficient for the next stage of Bulgaria’s development,” Arabadzhiev said. In his view, the shortage of funding for energy infrastructure, regional development, modernization, and digitalization can be addressed by directing private capital toward these areas.
The CEO of BDB explained that Bulgarian households hold substantial financial resources which, if supported by the right investment instruments, could contribute to the development of the country’s national infrastructure. In addition, pension funds in Bulgaria manage assets exceeding EUR 15 billion.
The establishment of a dedicated national investment fund, with the participation of the Bulgarian Development Bank, could channel private investment into the development of strategic infrastructure projects across the country.
Arabadzhiev pointed to the Three Seas Initiative Investment Fund (3SIIF) as an example. With a contribution of EUR 10 million from Bulgaria, the fund has succeeded in attracting EUR 200 million in investments, generating an impact of more than EUR 2.67 billion on the Bulgarian economy over a 15-year period. In addition, it is expected to support more than 4,000 jobs annually and generate over EUR 622 million in tax revenues.
“A similar national fund would accelerate public-private partnerships for modernization and the development of the infrastructure the country needs. By attracting private and institutional investors, it would achieve a high leverage effect on invested capital, which in turn would reduce pressure on the state budget,” he added.
