EBRD in €5 million loan to United Bulgarian Bank for energy efficiency projects
The EBRD has agreed a loan of €5 million for the United Bulgarian Bank for on-lending to private industrial companies in Bulgaria to finance energy efficiency projects.
The loan to United Bulgarian Bank is part of the EU/EBRD Energy Efficiency Facility which is a wider joint programme of the European Commission and the EBRD to provide up to €100 million in credits to banks involved in lending for energy efficiency projects in Bulgaria and Romania. The programme is complemented by €24 million of EU grant funding from the Phare programme*, which will be used for technical assistance to support energy efficiency projects and for other incentives for both the banks and businesses involved. The incentive for the companies receiving loans under this Framework will be 15 percent of the amount of the loan.
The loans are expected to help overcome obstacles to investment in energy efficiency projects that persist in Bulgaria. By financing investments via the banking system, the funds should reach a wide range of businesses in the private industrial sector. The Bulgarian government has already undertaken several key measures to combat energy wastage in the country. Energy consumption per unit of GDP remains, nevertheless, well above the average for other EU states and Bulgaria has a vast potential to achieve significant energy efficiency gains in a cost-effective manner.
The EBRD has supported the Bulgarian government’s drive to increase energy efficiency with a number of investments. Recent projects have included credits to finance hydro power plants, credits lines to banks for residential and industrial energy efficiency projects with the support of the Kozloduy International Decommissioning Support Fund and supporting the carbon trading market linked to renewable energy projects.
James Hyslop, EBRD’s Director for Bulgaria, said that this credit line is an important element of the Bank’s Sustainable Energy Initiative as it will further increase investments in the energy efficiency sector. We are delighted that, with today’s signing, United Bulgarian Bank demonstrates that it continues to be one of our strategic partners in promoting energy efficiency initiatives in Bulgaria, he added.
The EBRD is one of the largest investors in Bulgaria with some €1.5 billion committed to projects across the country. Working with its many partners, the Bank has mobilised more than €5.8 billion for projects in Bulgaria.
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