site.btaOver EUR 400 Mln in New EBRD Loans for Green Projects to Be Mobilized in Bulgaria

Financing of over EUR 400 million in the form of new loans for green projects will be mobilized on the Bulgarian market as a result of the European Bank for Reconstruction and Development (EBRD)'s work under the European Union’s InvestEU guarantee programme. The green projects funded in Bulgaria are expected to lead to savings of over 350,000 megawatt-hours of electricity and a reduction of harmful emissions by 100,000 tons of carbon dioxide per year — equivalent to the emissions produced by 12,500 households, 

said in a BTA interview Francis Malige, Managing Director, Head of Financial Institutions Business Group at the EBRD. Malige was in Bulgaria for the official launch of the EBRD's guarantee programme under the EU's InvestEU scheme. The EBRD is the second-largest partner in the EU programme for providing portfolio guarantees to commercial banks, which enable financial institutions to lend to green projects by transferring part of the risk associated with those exposures.

According to Malige, one of the challenges Bulgaria faces in its transition to a green economy is its high emissions intensity, which is 3.5 times above the EU average. He believes the country needs to invest more in the circular economy and reduce its dependence on fossil fuels. This can be achieved through investments in renewable energy, energy storage, grid improvements, and the promotion of energy efficiency.

Malige also noted that the adoption of the euro in Bulgaria will not lead to a full transformation of the economy, as the country has had a fixed exchange rate to the euro for decades. The introduction of the euro will further increase Bulgaria’s integration into the Eurozone economy.

"This means the euro will make it easier for Bulgarian businesses to compete outside Bulgaria, but it will also be easier for foreign businesses to compete within Bulgaria. So people need to be ready to face a new level of competition," said Malige.

He believes the euro will lead to an increase in foreign direct investment, boost capital market activity in the country, and reduce macroeconomic risks.

Regarding the banking system, the EBRD's Managing Director does not expect significant short-term impacts, as banks in Bulgaria are highly liquid, interest rates are low, and many of the banks operating in the country are already subsidiaries or partners of Eurozone-based banking groups.

Malige also highlighted Bulgaria’s accession to the Schengen area as an additional factor that would increase investment in the country.