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EBRD issues latest strategy for Bulgaria
Investment climate improves, but challenges remain, says Bank
Bulgaria’s business climate has improved significantly in recent years, but
challenges remain if the country is to attract larger volumes of foreign
direct investment, says the EBRD in its latest strategy issued today on www.ebrd.com.
Furthermore, local enterprises continue to face significant investment needs
in order to become more competitive as the country prepares to join the
European Union.
A stable macroeconomic framework, with growth in 2005 expected at 5.5 per
cent, and the reduced role of the state in the economy, have helped to fuel
investors’ appetite for the country, but the judiciary and the public
administration are key areas in need of further reform. And as large-scale
privatisations near completion, efforts must be made to attract much more
green-field investment, says the Bank.
Other key challenges facing the country include developing physical
infrastructure, particularly municipal services and regional transport links,
the efficiency of energy and industrial sectors, and improving the absorption
capacity for EU funding.
The EBRD, having supported Bulgaria’s transition process for 14 years, is the
country’s largest single investor, having committed over €1.3 billion in
around 93 projects. John Chomel-Doe, EBRD Director for Bulgaria, said the
country has been and continues to be an important partner for the Bank.
To help the country overcome some of the challenges outlined in the strategy,
the EBRD will:
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Support the enterprise sector; both foreign-owned companies and, crucially,
the local private sector as it approaches the challenges of the single market
by extending the Bank’s range of financing instruments to include more equity
financing and lending in local currency. The Bank will continue its Business
Advisory Services programme - TurnAround Management programme, to help
managers of local businesses become competitive and ready for EU accession.
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Support the Infrastructure sector; where the EBRD will expand lending to
municipalities outside Sofia, especially for urban transport, solid waste and
district heating services, and regional water companies. It will also support
public sector investments in areas such as air and sea ports, and the road and
rail sector.
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Support the power and energy efficiency sector; where the Bank will continue
to invest with the private sector in both generation and distribution, and
help to further develop Bulgaria’s role as a regional energy hub for
south-east Europe. The Bank will continue to work with banks to help local
companies promote energy efficiency projects.
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