FMFIB JSC is implementing an operation for financial instruments through a holding fund under the „Competitiveness and Innovation in Enterprises” (CIEP) Programme 2021 – 2027, co-financed by the EU.
The total amount of support under the CIEP 2021-2027 for financial instruments and grants in one single operation is BGN 1 262 732 093.24, of which BGN 1 017 893 493.21 is provided by the European Union through the European Regional Development Fund (ERDF).
The financial resources will be used to structure financial instruments under Priority 1 and Priority 2 of the CIEP 2021-2027, through which financial products will be provided for equity and quasi-equity investments, loans, and guarantees, including in combination with grants in one single operation for some financial instruments.
The financing aims to enhance the innovation capacity of enterprises, introduce innovations, including the commercialization of internal R&D, develop and implement technologies in the area of Industry 4.0, achieve the digital transformation of Bulgarian enterprises, and accelerate the adoption of digital technologies to increase competitiveness, promote sustainable growth, and competitiveness of SMEs, improve energy efficiency and among others promote the transition to a circular and resource-efficient economy.
The planned distribution of resources as per financial products is as follows:
- BGN 478.32 million for equity and quasi-equity investments;
- BGN 219.5 million for loans;
- BGN 302.17 million for guarantees;
- BGN 262.74 million for grants in combination with financial instruments in one single operation;
The Holding Fund plans the implementation of the following financial instruments under CIEP 2021-2027:
EQUITY FINANCIAL INSTRUMENTS:
INNOVATION IN ENTERPRISES FUND
The purpose of this financial instrument is to encourage the creation and implementation of innovations through equity and quasi-equity investments, focusing on companies in the early stages of their development.
Financial resources: EUR 32.17 million, of which EUR 24.7 million is provided by ERDF.
Individual investment ticket: The maximum amount of public resources is EUR 1 million. per final recipient.
Eligible final recipients: Micro, small, and medium enterprises (SMEs); small mid-cap companies and mid-cap companies.
Sectors of investment - all within the scope of the Innovation Strategy for Smart Specialization (ISSS) 2021-2027.
FINANCIAL INSTRUMENT FOR RISK FINANCING
The purpose of this instrument is to finance projects aimed at the creation and implementation of innovations by enterprises, primarily in the growth stage, through quasi-equity and debt investments.
Budget of the instrument: EUR 31.92 million, of which EUR 24.5 million is provided by ERDF.
Individual investment ticket: The maximum amount of public resources is up to EUR 5 million per final recipient
Eligible final recipients: Micro, small, and medium enterprises (SMEs); small mid-cap companies and mid-cap companies.
Sectors of investment - all within the scope of the Innovation Strategy for Smart Specialization (ISSS) 2021-2027.
FUND FOR HIGH-RISK DIGITALIZATION PROJECTS
A financial instrument for equity and quasi-equity investments, including risk quasi-equity financing, in support of enterprises at different development stages aimed at the development and implementation of Industry 4.0 technologies. The instrument will be implemented in combination with support from financial instruments and grants in one single operation (e.g., a combination with a grant for digitalization audit, other investment preparation technical services, and/or investment grant).
Budget of the instrument: EUR 28.51 million with possible combination of EUR 20.81 million in grants in one single operation.
Individual investment ticket: Public funds up to EUR 200 000 for grants and up to EUR 2 million for equity/quasi-equity financing per final recipient.
Eligible final recipients: SMEs, small mid-cap companies, and mid-cap companies.
Sectors of investment - for projects at development stages 3, 4, 5, and 6 under Industry 4.0.
START-UP FUND FOR DIGITALIZATION
The aim of this financial instrument is to encourage the implementation of risky projects in the field of digitalization, mainly by SMEs.
Budget of the instrument: EUR 33.56 million for equity and quasi-equity investments with possible combination of EUR 5.57 million in grants in one single operation.
Individual investment ticket: Public resources of up to EUR 5 million per final recipient, but not more than 15% of the Fund`s budget
Eligible final recipients: SMEs; small mid-cap companies and mid-cap companies.
Sectors of investment - for projects at development stages 3, 4, 5, and 6 as per Industry 4.0.
ENTREPRENEURSHIP FUNDS FROM CONCEPT TO GROWTH
The financial instruments from „Entrepreneurship” funds are planned to provide equity and quasi-equity investments through three funds covering different stages of businesses such as an early-stage fund, a venture capital fund, and a growth fund, with a focus on rapidly growing enterprises.
Budget of the instrument:
- Early Stage Fund with public resources of EUR 30 million;
- Venture Capital Fund with public resources of EUR 30 million;
- Growth Fund with public resources of EUR 40 million;
Investment size: Depending on the investment phase of the respective fund. Individual investment ticket : Public resources of up to EUR 3 million.
Eligible final recipients - SMEs; small mid-cap companies and mid-cap companies.
Sectors of investment – Sector agnostic, but focus on the sectors planned in the National Strategy for Small and Medium Enterprises.
DEBT FINANCIAL INSTRUMENTS:
DEBT FINANCIAL INSTRUMENT FOR DIGITALIZATION
A guarantee financial instrument is planned to provide support for existing enterprises from all sectors for the implementation of projects in the field of Industry 4.0. Financing is expected to be provided in the form of debt financing through the provision of guarantees.
Budget of the instrument: For financial instruments: up to EUR 45.18 million.
It is planned that the financial instrument will be implemented in combination with grants in a separate operation, which will be managed by the Managing Authority of CIEP with a budget of EUR 52 million.
Type of financing: Investment and working capital loans. Financial leasing.
Eligible final recipients: SMEs; small mid-cap companies and mid-cap companies.
Sectors of investment - for projects at development stages 3, 4, 5, and 6 as per the classification under Industry 4.0.
FINANCIAL INSTRUMENT FOR INTEGRATED TERRITORIAL INVESTMENTS (ITI)
The planned financial instrument will finance projects related to the development of viable investments in enterprises, in industrial parks or in functional proximity to them, in accordance with the Strategy for Territorial Development on NUTS II level. Financing is expected to be provided to final recipients in the form of loan financing combined with embedded portfolio guarantees.
Budget of the instrument: EUR 36 million.
Maximum amount : up to EUR 5 million public resources.
Type of financing: Investment and working capital loans. Financial leasing.
Eligible final recipients: SMEs; small mid-cap companies and mid-cap companies.
FINANCIAL INSTRUMENT FOR ENERGY EFFICIENCY IN ENTERPRISES
A financial instrument for loans and guarantees is planned to stimulate lending to SMEs and large enterprises to address the encountered difficulties in financing energy efficient- related projects.
Budget of the instrument:
- For financial instruments: up to EUR 85.16 million;
- For grants: up to EUR 48.1 million in one single operation with financial instruments;
Type of financing: Investment and working capital loans. Financial leasing.
Eligible final recipients: SMEs and large enterprises.
DEBT FINANCIAL INSTRUMENT FOR INVESTMENTS IN CIRCULAR ECONOMY
A financial instrument for loans and guarantees is planned to support enterprises in implementing circular economy-related projects related to the introduction of circular production and consumption models.
Budget of the instrument:
- For financial instruments: up to EUR 97.1 million;
- For grants: up to EUR 58.3 million in one single operation with financial instruments;
Type of financing: Investment and working capital loans. Financial leasing.
Eligible final recipients: SMEs; small mid-cap companies and mid-cap companies.
The support from the above-described financial instruments will contribute to achieving the goals under the CIEP 2021-2027, including with respect to the following:
PRIORITY 1 „INNOVATION AND GROWTH”
Specific objective (i) development and strengthening of research and innovation capacity and the introduction of modern technologies.
Specific objective (ii) harnessing the benefits of digitalization for citizens, enterprises, research organizations, and public authorities;.
Specific objective (iii) promoting sustainable growth and SMEs` competitiveness, jobs creation, including through investments in material production sectors.
PRIORITY 2 „CIRCULAR ECONOMY”
Specific objective (i) promoting energy efficiency and reducing greenhouse gas emissions; Specific objective (vi) promoting the transition to a circular and resource-efficient economy.
At least 1 134 Bulgarian enterprises will receive support from the financial instruments under CIEP 2021-2027.
It is expected that the financial instruments will attract additional private funding of at least EUR 209 874 396, contributing to the achievement of the indicator under CIEP 2021-2027 for private investments complementing the public support. In addition, investments through financial instruments will contribute to achieving other indicators under CIEP such as :
- Number of employees in SMEs trained in Industry 4.0 skills – at least 1 795;
- Achieved energy savings – at least 386 887 MWh/year;
- Reduction of greenhouse gas emissions – at least 276 082 tons of CO2 equivalent/year;