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EBRD, MKB Unionbank promote energy efficiency in Bulgaria
€5 million loan to help local industries reduce energy consumption and emission levels
The EBRD is lending Bulgaria’s MKB Unionbank €5 million to help local
industries to become more energy efficient. The loan builds on €3 million
provided to MKB Unionbank in 2004 which has helped nine private industrial
businesses cut energy waste significantly or produce energy more efficiently.
The loans are provided under the Industrial Energy Efficiency and Renewable
Energy Framework, set up in 2004 by the EBRD together with the Kozloduy
International Decommissioning Support Fund (KIDSF) and the Ministry of Economy
and Energy through the Energy Efficiency Agency.
James Hyslop, EBRD Director for Bulgaria, said this loan is building on the
success of the first issued to MKB Unionbank, which has helped promote the
efficient use of energy, helping to cut pollution levels through reduced
carbon emissions. This project reflects the EBRD’s strong emphasis on
supporting Bulgaria’s efforts in the development of an energy efficiency
programme, which was one of the conditions for Bulgaria’s accession to the
European Union and remains a strategic priority for the country now as an EU
member. Furthermore, by cutting energy wastage, businesses are saving costs
and contributing to improved competitiveness, Mr Hyslop said.
Maria Ilieva, CEO and Chairman of MKB Unionbank said lending of this kind is
very important for private industrial businesses in improving their energy
efficiency. With this EBRD loan MKB Unionbank will help Bulgarian businesses
to be competitive within the EU and at the same time will enable them to
operate on a more environmentally friendly basis. Just recently the EU member
countries, including Bulgaria, decided to lower harmful emissions by 20% by
2020. This energy efficiency loan to MKB Unionbank contributes to meeting this
target, she added.
Under the framework, participating banks such as MKB Unionbank receive funds
from the EBRD that they on-lend to private-sector industrial enterprises.
Businesses use the finance to improve energy efficiency by, for example,
introducing better energy consumption, automation, control and heat recovery
systems, and promote the use of renewable energy technologies.
The framework originally comprised €50 million of EBRD financing on lent to
six participating banks, and was extended in 2006 with the EBRD making
available a further €55 million. The financing is complemented by €20
million in grant funding from the KIDSF, set up in 2000 and administered by
the EBRD.
Successfully completed renewable energy projects receive grant funding of 20
per cent of the loan extended by the participating banks, and companies with
successfully completed energy efficiency projects receive 7.5 per cent of such
loans from the KIDSF, financed by donors, including the European Community,
Austria, Belgium, Denmark, France, Greece, Ireland, the Netherlands, Spain,
Switzerland and the United Kingdom.
MKB Unionbank is a part of the German bank group Bayern LB. EBRD is a minority
shareholder in the Bulgarian bank with an ownership stake of 6 percent.
Private shareholders and other credit institutions own another 34 percent. At
the end of April 2007, the total assets of MKB Unionbank amounted to BGN 700
million, representing an increase of approximately 40% year-on-year. Loans
have increased by over 37% and exceeded BGN 400 million.
The EBRD is the largest investor in Bulgaria with more than €1.4 billion
committed to 105 projects across the country. Working with its many partners,
the Bank has mobilised more than €5.5 billion for projects in Bulgaria.
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