Additional funds mobilized for the development of Bulgarian cities
The Fund of Funds has signed a Memorandum of Understanding with the European Investment Bank and FLAG, in partnership with the Bulgarian Consulting Organization
Today, January 17, 2020, a Memorandum of Understanding was officially signed, aiming at creating a Bulgarian Urban Investment and Advisory Platform. It will establish a mechanism for cooperation between the Parties regarding enhanced opportunities for financing of urban development in Bulgaria.
The mechanism aims to ensure synchronization in the efforts of the Parties when providing support for the development of Bulgarian cities, as well as to improve the efficiency of the investment process from the European Structural and Investment Funds. The platform will provide resources that will complement the already available support for urban development, managed by the Fund, including BGN 353.3 million under OPRG 2014-2020 and BGN 66 million under OPRD 2007-2013 (the JESSICA initiative).
As a follow-up of the signing of the Memorandum, the EIB is expected to provide additional funds, which will assist the Bulgarian municipalities and will also extend the scope of the achievements so far by the Fund of Funds.
In pursuit of the objectives of the Bulgarian Urban Investment and Advisory Platform, the Fund for Local Authorities and Governments (FLAG) is envisaged to continue its successful partnership with the Bulgarian Consultancy Organization, with whom they jointly participate in the management of the two of the Urban Development Funds, financed by the Fund of the Funds.
Regarding the signing of the Memorandum, EIB Vice President Mrs Lilyana Pavlova commented on the event: “It is our commitment, as EU bank, to provide a helping hand to the EU Member States and our clients to facilitate the preparation, development and financing of priority projects, which contribute to the economic growth and improve the quality of life of EU citizens. This also means working with local partners and a good example of that is this Memorandum of Understanding concluded today to establish the „Bulgarian Urban Investment and Advisory Platform” between the EIB, the Fund of Funds (Fund Manager of Financial Instruments in Bulgaria) and the Fund for Local Authorities and Governments. It highlights the importance of establishing a strategic partnership in support of sustainable urban development projects in Bulgaria. With funding from the European Investment Advisory Hub, and capacity building support from EIB, Fund of funds will also be reinforcing its local advisory services to Bulgarian municipalities as part of this new Urban Investment and Advisory Platform”.
- stated the following: “With today's signing, the Fund of Funds reaffirms its fruitful partnership with the EIB by initiating the establishment of a clear mechanism and interinstitutional cooperation for the benefit of Bulgarian cities. In this way, we are building on what has already been achieved through the Urban Development Funds and creating prerequisites for extending support and additional funding. The signing of this Memorandum of Understanding proves the progress of Bulgaria in working with financial instruments.”
The Executive Director of FLAG, Mrs Nadia Dankinova, thanked the institutions for the good cooperation and remarked: “We view the Memorandum of Understanding as a natural continuation of the Bulgarian state's efforts to support the financing of projects promoting the sustainable development of local communities and regions through established and well-functioning structures.
We believe that the new Investment Platform will build on what has already been created through FLAG and the Urban Development Funds."
At the event, a Funding Agreement for advisory services was signed between the Fund of Funds and the EIB. Support will be provided for a project awarded to the Fund of Funds with the assistance of the European Investment Advisory Hub (EIAH). It is envisaged that highly qualified national and international experts in the fields of the project initiatives can be hired. The advisory will be provided through the financial intermediaries to final recipients, thereby building on what has been agreed in the Memorandum. The total value of the agreement is €200,000, provided on a project basis.
The signing of the Memorandum of Understanding and the accompanying Funding Agreement for advisory services set the stage for closer inter-institutional cooperation and additional funding to achieve policy goals at national and European level.
In addition, the Memorandum is expected to prepare public authorities and their partners for the implementation of integrated territorial investments, which are planned to be available under the Programme for the Development of Regions in the next programming period 2021-2027.
The Fund of Funds is a joint-stock company owned by the Bulgarian state, which implements in the country the financial instruments, co-financed by the European Structural and Investment Funds. The company manages a public resource of over € 660 million and impalements a wide range of products for the financial sector, including guarantees, loans, private equity and others.
The European Investment Bank (EIB) is the European Union's bank. It is the long-term lending institution of the EU and is the only bank owned by and representing the interests of the European Union Member States. It makes long-term finance available for sound investments in order to contribute towards EU policy goals. The EIB works closely with other EU institutions to implement EU policy. As the world’s largest multilateral borrower and lender by volume, the EIB provides finance and expertise for sound and sustainable investment projects which contribute to furthering EU policy objectives. More than 90% of EIB activity is focused on Europe but the Bank also supports the EU's external and development policies.
Fund for local authorities and governments (FLAG) is created as a state policy-driven instrument targeted at Bulgarian municipalities and their needs for the financing of investment projects implemented with grants under the Operational programmes or other European programmes. FLAG provides bridge financing and long-term loans for provision of own contribution. For the past 10 years FLAG has supported 220 out of 265 Bulgarian municipalities with total loan allocation of more than 0,6 EUR bn.