News

The Fund of Funds To Invest Another BGN 56.3 million in Small and Medium-Sized Enterprises

07.07.2020

The Fund of Funds (FoF) extends another BGN 56.3 million, available for investments and liquidity support to small and medium-sized enterprises affected by the COVID-19 pandemic. This comes as yet another anti-crisis measure after the FoF announced its SMEs guarantee instrument of nearly BGN 158 million last week.

To make sure it can reach final recipients as quickly as possible, the new amount will be invested using existing FoF investment instruments for small and medium-sized enterprises, including the seed/acceleration and venture capital funds.

This will be conditioned on certain requirements, following a review of its current contracts with financial intermediaries already selected through public procurement. Negotiations are already underway.

In late April, the Fund of Funds received the European Commission’s approval to ease the requirements for equity instruments and provide support for the most vulnerable segment of the economy, i.e. small and medium-sized enterprises, especially start-ups. Consequently, investments using the new pool of BGN 56.3 million will be granted certain waivers, e.g. on the requirement for financial intermediaries to attract independent private investors.

The additional financing of BGN 56.3 million comes from the Operational Programme Innovation and Competitiveness (OPIC) 2014–2020. It was originally earmarked for the Technology Transfer Fund (TFT) and a public procurement call for the selection of a financial intermediary was announced.

However, after the outbreak of the COVID-19 pandemic and the ensuing socio-economic crisis, the Council of Ministers endorsed certain changes to the OPIC on May 11.On the basis of that government decision and with a view to channelling all possible resources towards providing rapid liquidity support to SMEs, the FoF and OPIC amended their financing agreement.

The new situation caused the FoF to cancel the public procurement call for the selection of an intermediary for the FTT. The decommitted resources will be used to enable more small and medium-sized enterprises to maintain their business operation without having to put their investment programmes on hold.