The Fund of Funds will support loans for the Fisheries sector
The Maritime and Fisheries Programme has provided BGN 5.4 million for a new financial instrument
Enterprises in the Fisheries sector will have access to loans at preferential terms financed through the Fund of Funds (FoF). For this purpose, the Maritime and Fisheries Programme (MFP) 2014–2020, co-funded by the European Maritime and Fisheries Fund (EMFF), has allocated BGN 5.4 million.
The agreement concluded between the FoF and the MFP Managing Authority envisages that two financial products will be made available in the market: a) low-interest loans and b) guarantees for loans provided by commercial banks. The two types of loans may be used either as independent sources of funding for MFP projects or as complementary funding for projects which have received approval for MFP grants.
The instrument will support investments in fisheries and aquacultures, including in the processing of fishery and aquaculture products, aimed at reducing harmful environmental impacts and achieving more efficient use of resources. The funds can also be used for supporting project proposals that contribute to the implementation of local development strategies and to the improvement of the economic and social welfare of fishing communities.
The new financial products will make it easier for enterprises in the sector to access funding for their projects by offering preferential loan terms, including lower interest rates, simplified loan security requirements, and extended grace periods.
The guarantee product will secure up to 80 % of each loan provided by a commercial bank, subject to a cap of BGN 1 million.
The loans with a risk-sharing component may be used both for investment purposes (up to BGN 500 000) and for working capital (up to 30 % of the amount of the investment loan). The FoF contribution to these loans will be 50 % if the FoF component is complementary to a grant and up to 70 % for projects which are financed only by loans. The FoF-funded portion of the loan will not attract interest meaning that the overall interest rates will be substantially lower than those in the market.
The FoF will leverage the allocations from the MFP by attracting additional private financing so that the overall financial resources available to final recipients will exceed BGN 8 million.