2024-08-01 17:45:51
The government approved a draft law on the ratification of an agreement for a joint guarantee for a loan of the Bulgarian Development Bank from the Development Bank of the Council of Europe for 175 million euros to support micro, small and medium-sized enterprises
A framework agreement dated July 13, 2023 for a loan granted to the Bulgarian Development Bank (BDB) in the amount of EUR 175 million under the project “Support of MSMEs for the creation and preservation of viable jobs”, including the “Environmental protection” component “, to support micro, small and medium-sized enterprises (MSMEs).
It was signed between the Development Bank of the Council of Europe and the Bulgarian bank on July 13, 2023, and the Agreement on a joint guarantee between BRSE and the Republic of Bulgaria – by the Minister of Finance on July 20, 2023, after the project was approved and a mandate was granted for its signing with a protocol decision of the Council of Ministers on July 5, 2023.
The same draft law for ratification of the Agreement was adopted by Decision of the Council of Ministers of July 27, 2023 and submitted to the 49th National Assembly. Due to the convening of the 50th National Assembly, it has to be submitted again.
The loan is granted in accordance with the environmental and social policies of BRSE and with the applicable national and European standards. The social benefits are great, as it targets micro, small and medium-sized enterprises, which constitute the “backbone” of the Bulgarian economy and provides the necessary available capital for economic recovery. It also has a positive effect on the environment through the support of green investments.
The loan will finance effective investment projects of Bulgarian MSMEs, thereby supporting their activity and their ability to create and retain jobs, which is a significant factor for social strengthening in the country.
The BRSE loan will finance the issuance by BDB of standard and “green” loans for MSMEs, and in both categories investment and/or working capital will be provided. Within the general financing for MSMEs, projects to promote innovation, technological renewal and digitization.
The use of a state guarantee allows BBR to provide financing under favorable conditions for programs and products in support of Bulgarian business. The benefits of the agreed cheaper resource from BRSE will be transferred to the final beneficiaries.
The joint guarantee agreement is subject to ratification by the National Assembly, as it contains financial clauses. Payment obligations under the agreement would only arise in the event of default by the borrower (BBR) in payment of amounts due under the loan.