€27.5 million loan to Allianz Bank Bulgaria
The EBRD is boosting the availability of financing in the Bulgarian real economy with two credit lines worth a total of €27.5 million offered to Allianz Bank Bulgaria (ABB) for on-lending to small and medium enterprises (SMEs) and for financing energy efficiency and renewable energy projects.
АBB, majority-owned by Germany’s Allianz Group, is a universal bank offering a full range of banking services through a network of more than 110 branches and representative offices in the country.
As a result of the global economic crisis, lending activities in Bulgaria have slowed down considerably, limiting SMEs’ access to finance and hindering their growth. The EBRD funds will help ABB meet the growing demand for short, medium and long-term funding from local companies in the current challenging market conditions.
The SME credit line, worth €20 million, will be used to finance investments and working capital of small and medium-sized businesses operating in Bulgaria. ABB has identified the SME sector as one of the key areas for its future growth. The facility will allow the bank to develop an improved product offering and attract new SME clients.
The proceeds of the Energy Efficiency line in the amount of €7.5 million will finance energy efficiency and renewable energy projects implemented by Bulgarian businesses with the view to reduce their energy intensity and improve their competitiveness.
The facility, part of the EBRD’s Energy Efficiency and Renewable Energy Credit Line Framework (EERECL) for Bulgaria, is complemented by grant funding from Kozloduy International Decommissioning Support Fund (KIDSF), which will be used for technical assistance to support both types of projects and for incentives for both the banks and businesses involved. Financing energy efficiency and renewable energy projects will make ABB one of the few banks on the Bulgarian market working under the EERECL Framework, enabling ABB to further extend its corporate product portfolio.
“Supporting the development of the real economy sector is one of the EBRD’s key priorities, particularly in the current environment. The funds offered to Allianz Bank Bulgaria will facilitate the access of local companies to the much needed financing and will help them improve their energy efficiency. This project will help raise the competitiveness of small and medium enterprises, while also providing a boost to the banking sector”, said Peter Reiniger, EBRD Managing Director for Central and South Eastern Europe.
“In recent years ABB has been focusing on developing its client base in the SME and retail sector. Already experienced in working with the EU/EBRD SME Finance Facility, Allianz Bank Bulgaria fosters dozens of successful small investment projects since 2006 with the financial support of EBRD. ABB welcomes the opportunity to finance new clients’ projects even nowadays when markets are relatively cautious. Supporting energy efficiency being a key goal for EU member states will also help ABB to meet the specific needs of its corporate clients”, said Dorcho Ilchev, Executive Director of ABB.
This transaction represents a continuation of the EBRD’s relationship with Allianz Bank Bulgaria. In 2006 the EBRD extended a €5 million credit line under the EU/EBRD SME Finance Facility Framework. An extension of the credit line for €5 million was signed in January 2009.
Since the beginning of the EBRD operations in Bulgaria, the Bank has committed €2 billion in more than 120 projects in key sectors of the country’s economy, mobilising additional investment worth more than €7 billion.