September 20 (SeeNews) - The European Bank for Reconstruction and Development's (EBRD) investment in Bulgaria will reach a seven-year high of 500 million euro ($559.2 million) in 2016, the bank's president has said.
In the coming years, EBRD will aim to keep its annual investment in Bulgaria at about 200 million euro, in response to local demand, Suma Chakrabarti said during a visit in Bulgaria earlier this week.
"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," the bank's president said in a statement.
In its largest transaction in Bulgaria to date, EBRD provided a 300 million euro loan to the Bulgarian Deposit Insurance Fund earlier this year to contribute to a more stable banking sector. The EBRD also invested 80 million euro in a Eurobond issued by Bulgarian Energy Holding (BEH) last month 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.
During his visit on September 18-19, Chakrabarti discussed the business climate with Bulgarian 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, according to the statement.
At the request of the Bulgarian authorities, 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.
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, Hungary on November 9-10, which will be attended by Bulgarian president Rosen Plevneliev.
To date, the EBRD – one of the largest institutional investors in Bulgaria – has invested over 3.4 billion euro in more than 230 projects in the country. About 80% of the bank’s investments in Bulgaria are in the private sector.
($=0.8941 euro)