Sir Suma Chakrabarti welcomes reforms in energy and financial sectors, announces record EBRD investment in 2016
During the visit, President Chakrabarti met with Bulgarian Prime Minister Boyko Borissov, Deputy Prime Minister Tomislav Donchev, Minister of Finance and EBRD Governor Vladislav Goranov, Minister of Energy Temenuzhka Petrova and Mayor of Sofia Yordanka Fandakova. He also held a roundtable discussion with representatives of the business community.
President Chakrabarti’s discussions focused on the EBRD’s investment in the country, the government’s reform agenda and the role the Bank can play to help address remaining challenges and promote investment in cooperation with the authorities.
President Chakrabarti welcomed Bulgaria’s recent actions to strengthen the stability of its financial sector and promote the liberalisation of the energy market. He reconfirmed the EBRD’s commitment to support these reforms with investment and technical advice.
President Chakrabarti said: “The government has done a very good job of preserving economic stability. We have been encouraged by the firm action taken to strengthen the financial and power sectors. The high level of EBRD investment this year is a strong testimony to our support for this reform agenda. Continued reforms and an improved business climate will unlock further investment, including by the EBRD.”
Earlier this year, in its largest transaction in Bulgaria to date, the Bank provided a €300 million loan to the Bulgarian Deposit Insurance Fund to contribute to a more stable banking sector. The EBRD also invested €80 million in a Eurobond issued by Bulgarian Energy Holding (BEH) as part of the government’s comprehensive reform plan to restore the financial viability of the electricity sector and to promote the liberalisation of the energy market.
Stepping up cooperation in the energy sector, in particular with regard to energy efficiency, power distribution and gas infrastructure, was the focus of the meeting with Minister of Energy Temenuzhka Petkova.
In addition, President Chakrabarti discussed the business climate with local and foreign investors. Corruption, poor compliance with the rule of law, and the insufficient capacity of public administration were identified as major challenges hindering further investment in the country.
At the request of the authorities, President Chakrabarti offered tailored assistance under the Bank’s Investment Climate and Governance Initiative which supports reform-minded governments and businesses to increase transparency, good governance and healthy competition.
In a meeting with the Mayor of Sofia, Yordanka Fandakova, the President welcomed the capital’s ambition to become a “green city” with modern and efficient urban transport and infrastructure. He reiterated the Bank’s availability to support, structure and implement much-needed municipal infrastructure projects that will improve quality of life in Bulgaria’s main city.
While in Sofia, President Chakrabarti also signed a €5 million loan to Elana Agrocredit, a business that provides lease financing for local farmers seeking to acquire agricultural land.
This year the EBRD’s investment in Bulgaria will rise to over €500 million, a seven-year record. In the coming years, the Bank will aim to keep the level of investment at about €200 million annually, in response to local demand.
To further reinvigorate investment and growth in Bulgaria and other EU member states where the EBRD invests, the Bank is organising a conference in Budapest on 9-10 November 2016, which will be attended by the Bulgarian President Rosen Plevneliev among other decision-makers.
To date, the EBRD – one of the largest institutional investors in Bulgaria – has invested over €3.4 billion in more than 230 projects in the country. Some 80 per cent of the Bank’s investments in Bulgaria are in the private sector.
The Bank’s strategy in Bulgaria focuses on enhancing the competitiveness of companies, including small and medium-sized enterprises, through improved efficiency, governance and innovation; strengthening financial sector intermediation; and narrowing the infrastructure gap through commercialisation, reform and efficiency.
The EBRD’s operations in the country are headed by Larisa Manastirli, who also attended the meetings.