BDB and UBB signed an agreement under the InvestEU programme
The guarantee will provide financing for businesses worth over €300 million and €35 million for sustainable investments.
Bulgarian Development Bank (BDB) and United Bulgarian Bank (UBB) sign their first InvestEU guarantee agreement worth EUR 47.8 million
Bulgarian Development Bank (BDB) and United Bulgarian Bank (UBB) signed today their first agreement under the InvestEU Fund, providing guarantees amounting to EUR 47.8 million. The document was signed by Tsanko Arabadzhiev, Chief Executive Officer of BDB, and Frank Jansen, Member of the Management Board and Executive Director for SME Banking at UBB.
The state-owned bank is providing support under both the “Member State” and “EU” windows, which will enable the creation of a guarantee portfolio of EUR 335 million for lending to small and medium-sized enterprises (SMEs) as well as mid-cap companies (with up to 499 employees).
Under the agreement, BDB will provide guarantees in two main directions.
The SME guarantee will support EUR 300 million in new loans to enterprises aimed at enhancing competitiveness, growth and employment, as well as stimulating innovation, digitalisation and green transformation.
The sustainable investments guarantee will provide EUR 35 million for projects related to waste recycling and improving air quality.
“It is important for UBB to be a partner of BDB under the InvestEU programme. The credit guarantee is designed to provide preferential financing to SMEs and mid-sized companies and to support economic growth and regional development. The funds under the programme are aligned with our priority pillars - competitiveness, innovation, digitalisation and sustainability,” said Frank Jansen, Executive Director for SME Banking at UBB.
“Through this partnership under InvestEU, Bulgarian Development Bank fulfils its core mission - unlocking significant private capital for the growth of Bulgarian companies. This is a concrete example of how public resources can work effectively in favour of the real economy,” said Tsanko Arabadzhiev, CEO of BDB.
The support provided by BDB in the form of a guarantee covering 80% of each loan amount (with a portfolio cap of 17% for competitiveness and 25% for sustainable investments) will allow enterprises to obtain financing under more favourable conditions, including lower collateral requirements.
At least 65% of the resource will be directed to less developed regions, with the aim of reducing regional disparities and supporting local businesses outside major cities.
The InvestEU Programme (2021 -2027) is a key European Commission instrument to support sustainable development, small businesses and innovation. It aims to stimulate investment, the green economy, employment and prosperity in Europe.
BDB is among the 17 implementing partners accredited to manage European funds and budgetary instruments. The bank was approved for this role in 2023.
