The EBRD and the Government of Bulgaria have signed a Memorandum of Understanding today to boost competitiveness of small and medium sized enterprises (SMEs) through investments in energy efficiency in order to strengthen the transition of the South East European country towards a green economy.
Building on EBRD’s successful track record with implementation of sustainable energy credit lines in Bulgaria and the region, the Bank will support the design, launch and monitoring of the new Government’s programme to increase efficiency productivity of SMEs through the promotion of energy efficiency investments. To support this new programme, the Bank plans to establish the “Energy Efficiency for Competitive Industry Financing Facility” under which the Bank will extend credit lines to commercial banks in Bulgaria.
Under its new programme, the Government will provide to SMEs technical assistance and grants alongside loans from commercial banks which should receive credit lines from EBRD. For this purposes, the Government expects to utilise approximately EUR 200 million earmarked for sustainable energy initiatives under the Operational Programme “Development of the Competitiveness of the Bulgarian Economy 2007-2013”.
The joint initiative aims at improving the efficiency and productivity of the technology used by Bulgarian enterprises in addition to the environmentally beneficial effects. The initiative should help reduce energy intensity and environmental impact through promoting investments in environmentally friendly, low-waste, energy saving production technologies and also in utilisation of renewable energy.
Bulgaria has defined the improvement of energy efficiency and energy security, the promotion of renewable energy resources and the reduction of the carbon intensity of the economy as national priorities. Bulgaria has adopted a national energy savings target of no less than 9 percent of the final domestic energy consumption by 2016 (requiring a reduction of 1 percent per year on average) and committed itself to reach 16 percent share of renewable energy in the final energy consumption by 2020 (requiring an increase of 70 percent compared to the current production).
The EBRD has played an important role in the development of sustainable energy through loans which have been tied to technical assistance and grants provided by the Kozloduy International Decommissioning Support Fund. However, many challenges remain, especially for smaller companies which will be specifically supported by the joint project of the Bank and the Ministry. Projects to benefit from the OP Competitiveness grant funds will aim at significant improvements of the equipment and technologies.
Bulgaria’s Minister for Economy, Energy and Tourism, Traicho Traikov said: “This new Memorandum of Understanding builds on an already efficient and successful cooperation between our country and the EBRD. Improving energy efficiency is crucial to boosting the competitiveness of Bulgaria’s enterprises and I am convinced that our new programme will enhance the performance of our economy.”
Daniel Berg, EBRD Director for Bulgaria, added at the signing: “Our Bank is a long-standing partner of Bulgaria and the new Facility represents a good example of our cooperation. It will help improve utilisation of EU funds while reaffirming our commitment to help reduce Bulgaria’s energy intensity. The Bank is prepared to support the drive towards a green economy with its funds, expertise and technical assistance.”
Since the beginning of its operations in Bulgaria, the EBRD has committed over €2.4 billion in various sectors, mobilising additional investments in excess of €5 billion from other sources.