04.08.2021 Green technologies and digitalization are the preferred sectors for InvestEU funding
BDB has conducted market research on the structuring of guarantee products under the programme
Green technologies, environmental resource, water and waste management, improvement of logistics and communication systems of enterprises, introduction of new technologies, support for vulnerable groups such as start-ups and women-owned businesses – these are the preferred sectors for funding under the InvestEU programme, around which the financial institutions that participated in a market research conducted by the Bulgarian Development Bank are united.
Consultations with representatives of the banking sector and business associations allow the structuring of guarantee instruments in the two main directions: support for small and medium-sized enterprises and funding for sustainable infrastructure within the European InvestEU programme. The research takes into account the market demand and helps to identify potential financial intermediaries with whom the Bank can collaborate.
On June 30, 2021, the Bulgarian Development Bank officially expressed to the EC its desire to attract additional funds for the recovery and development of Bulgarian businesses through the InvestEU programme. The total resource that the Bank can mobilize with the support of the EU and the participation of the financial sector is approximately BGN 1.7 billion.
Respondents to the research have stated that they are interested in a standard portfolio guarantee by BDB with options for different risk coverages. They believe that such an instrument would enable them to finance riskier and more vulnerable end borrowers. Additional benefits for businesses would be a reduction in the interest rate and lower collateral requirements.
As to the maximum funding amounts, commercial banks say between EUR 7.5 million and EUR 15 million for the Sustainable Infrastructure component and up to EUR 7.5 million for the Small and Medium-Sized Enterprises component. The acceptable loan terms are of up to 180 and 120 months respectively, and the period for new portfolio generation is until 2027.
The next steps are to structure the guarantee products under the programme, select financial intermediaries and execute agreements with them. The final confirmation of the Bank's inclusion in the InvestEU programme is expected in October.
The InvestEU program will be implemented in the 2021-2027 period as the EU's main instrument for investing in economic recovery, environmental progress and employment in Europe. This is one of the mechanisms to support growth after the Covid crisis and to achieve the EU's goals of building a green, digital and sustainable European economy.