site.btaBulgaria to Request up to EUR 3 Bln in Defence Loans Under EU SAFE Instrument by July 29

Bulgaria will apply for up to EUR 3 billion in defence loans under the EU Security Action for Europe (SAFE) instrument by July 29, Defence Minister Atanas Zapryanov told journalists in Blagoevgrad Thursday. "By July 29, Bulgaria must submit a financial proposal of the minimum and maximum amount of funding under the SAFE mechanism," Zapryanov told the media following the welcome ceremony for the mechanized infantry company that participated in NATO’s operational reserve forces in Kosovo (KFOR) over the past three months.

The Minister explained that the loan comes with very favourable conditions, symbolic interest rates, a 10-year grace period, and a 35-year repayment period, a total of 45 years, and the deliveries will be VAT-exempt. A total of EUR 150 billion has been allocated under the mechanism, he added. Each EU member state is eligible to apply, and Bulgaria will seek between approximately EUR 2.745 billion (BGN 5.3 billion) and EUR 3.067 billion (BGN 6 billion).

At its meeting on Wednesday, the Council of Ministers adopted a decision approving a draft expression of interest by the Republic of Bulgaria for financial assistance in the form of a loan. It has a minimum threshold of EUR 2,745,700,000 and a maximum threshold of EUR 3,067,800,000.

Greece is expected to request between EUR 22 and EUR 28 billion, and other countries will also submit requests. The European Commission will act as the arbiter in determining how the EUR 150 billion will be distributed among the member states, Zapryanov added. To access the funds, there must be a joint procurement procedure between EU member states, with a priority on the European defence industry, the minister explained.

"Once Bulgaria receives official confirmation of the approved amount under SAFE, work will begin on developing a national plan, which, as the Prime Minister has stated, must be completed by the end of November and resubmitted to the EC," Zapryanov said.

There will be a second review of the national plans, which will include specific projects, their annual implementation timelines, and the required funding by phase, the minister added.

After the national plan is approved, a proposal for the loan will be worked out. The withdrawal of the full amount will not be mandatory, the minister explained. This SAFE loan will form part of the national debt, and monitoring the national debt is a key component in maintaining financial stability, the defence minister said.

National financing will be used for some projects of the national defence industry, Zapryanov added. He also said that work will begin on the missile coastal defence system project, with negotiations to be held with the United States. This particular project is not part of the SAFE mechanism, he clarified. However, this may change, as Norway, considered eligible for the European instrument, will participate.