The Fund of Funds (FoF) announces the launch of a selection procedure for financial intermediaries to manage Urban Development Funds (UDFs) supported by the Regional Development Programme 2021-2027 (RDP) and the Competitiveness and Innovation in Enterprises Programme 2021-2027 (CIEP), both co-financed by the European Regional Development Fund.

The financial instrument is implemented in the form of three UDFs - two for Northern Bulgaria (UDF North 1 and UDF North 2) and one for Southern Bulgaria (UDF South). The total public resources to be distributed between the three funds amount to over BGN 513 million (BGN 442.6 million under the RDP and BGN 70.9 million under the CIEP).

The aim of the UDF is to leverage private capital to the public financing made available by the two programmes, thereby improving access to finance for final beneficiaries to implement investments contributing to the achievement of the objectives and indicators of the two programmes.

The public resource for the facility is provided through risk-sharing financing and an embedded/portfolio guarantee that covers the risk of loss on the funds provided by the financial intermediary. The support to the final beneficiaries can take the form of loans and/or financial leasing and should be paid until the end of 2029. 

For the first time it is foreseen that grant financing with RDP funds will be provided by the intermediaries in combination with loan financing under the Instrument (i.e. in a single operation). 

The RDP support targets public and private projects to promote the development of the economic activity, sustainable urban mobility, improvement and development of health and social services, education, culture, sports and tourism, energy efficiency of public and residential buildings, green urban measures, etc.

The CIEP resources are targeted at investments by SMEs and mid-cap companies within and in functional proximity to new/existing industrial parks.

The financial intermediaries shall be selected by the Fund of Funds in a competitive procedure with negotiation in accordance with the provisions of the Bulgarian Public Procurement Act. Eligible candidates for the procedure shall be financial or credit institutions within the meaning of the Credit Institutions Act, or associations which include such institutions whose activities are located on the territory of the Republic of Bulgaria.

Applicants may submit applications for participation until 20.11.2024. The contract notice was published on 11.10.2024 in the Official Journal of the European Union and the complete documentation is available in the CAIS EPP  system in the buyer’s profile at the following link: https://app.eop.bg/today/414647

This is the third programming period in which the UDFs will be implemented and with the full investment of the resources under the OPRD 2007-2013 and OPRD 2014-2020, the Urban Development Funds have proven to be a successful instrument for supporting the sustainable development of cities and regions in Bulgaria.

The current procedure for the selection of intermediaries is the third one announced by the FoF within the new programming period. The Instrument is part of the company's strategic plan to promote economic growth and innovation in Bulgaria, improve access to finance and stimulate investments.