July 6 (SeeNews) - The Bulgarian Development Bank (BDB) said on Friday it signed a 1.5 billion euro ($1.75 billion) framework agreement with its Chinese peer, envisaging financial cooperation over the next five years under the One Belt, One Road initiative of the Chinese government.
The funding, which will be provided in the form of loans from China Development Bank to BDB, will be used as cofinancing, project financing, private equity financing and syndicated lending for projects of mutual interest, BDB said in a statement.
The projects could be in the energy, communications, transport and agriculture sectors, and could involve small and medium-sized enterprises.
The two banks are also discussing options to set up joint venture capital funds in support of start-ups in Bulgaria, the statement added.
The agreement was signed during a summit in Sofia of leaders of China and countries of Central and Eastern Europe (CEE) in the so called '16+1' format.
China plans to provide a total of 2 billion euro to CEE countries through the '16+1' initiative, with nearly 75% of those funds allocated to Bulgaria, the statement noted.
The '16+1' is an initiative by the Chinese government for tighter cooperation with 11 EU member states and five countries in CEE - Albania, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Macedonia, Montenegro, Poland, Romania, Serbia, Slovakia and Slovenia.
The initiative intersects with the Chinese government's One Belt, One Road development strategy under which China plans to invest hundreds of billions of euro in other countries in Asia and in Europe in a bid to strengthen its role in global affairs.
However, the '16+1' initiative, which envisages large investments in infrastructure and technologies in these eleven countries which China views as a bridge to the EU, has raised concerns in the EU institutions that it runs counter to the common law, as it could allow Chinese companies to circumvent the bloc's import duties and anti-dumping tariffs.
($ = 0.8542 euro)
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