July 20 (SeeNews) - The European Investment Bank (EIB) is looking to diversify its activities in Bulgaria by increasing its support for the IT, tourism and pharma sectors, the bank's vice president Vazil Hudak said on Thursday.
At the same time, the EIB will keep its focus on small and medium-sized enterprises (SMEs), working with local banks, the Fund of Funds, the Bulgarian government and state-owned Bulgarian Development Bank, Hudak said during a press briefing in Sofia.
In 2016, the EIB Group extended loans and guarantees of 467 million euro ($544 million) to Bulgaria. Last year, the EIB also provided a separate 150 million euro intermediated loan to the Bulgarian Development Bank to finance small and medium-scale projects promoted by SMEs and midcaps.
The EIB also provided SME credit lines under its “Skills and Jobs – Investing for Youth” youth employment programme, benefiting people under 25 years of age. The bank signed such facilities with local CIBank and Allianz Bank, worth 50 million euro and 30 million euro, respectively. The projects financed are being implemented by companies offering vocational training and internships for young people or collaborating with a technical college, school or university.
Last year the European Investment Fund – which together with the EIB forms the EIB Group – committed 473 million euro in three equity and 20 guarantee operations aimed at raising 985 million euro in new investments.
"In addition to these we want to do more in specific sectors," Hudak said. "Tourism, IT and pharmaceuticals, where there are some strong players in the local market, are some of the areas which the bank is exploring."
Bulgaria has a vision of moving from a low-cost tourism destination to a more high-end tourist development based on eco tourism and this would be one of the areas where it has a competitive advantage, Hudak said.
The bank will also seek to back projects which focus on bringing more innovation in agriculture, he added.
The EIB will also remain actively involved in road construction and energy efficiency projects.
To complement its lending activities, the EIB has provided extensive advisory services to public and private sector entities in Bulgaria, helping to speed up the implementation of key infrastructure projects and the absorption of EU funds. These services have been provided under a multi-annual Memorandum of Understanding with the country.
Like other economies in the region, Bulgaria is facing problems with shortage of skilled workers, the EIB vice president said in response to a SeeNews question.
"We are missing the link between education and modern economy. Many education institutions are training people who are not ready for the modern economy," he commented.
"Creating an environment where the business is ready to invest and feel comfortable, predictability and stability are the key issues," Hudak also said.
Over the past 25 years, since it extended its first loan to Bulgaria, the EIB Group has supported the country's economy with loans and guarantees for nearly 5 billion euro.
"We look forward to continuing this fruitful co-operation and focusing more and more on innovative methods of financing including combining EIB loans with EU grants. Bulgaria is among the regional frontrunners in this respect,” Hudak told a conference with government and business officials in Sofia later in the day.
In 2017, the EIB Group is looking in particular to finance more projects benefiting from a guarantee provided by the European Fund for Strategic Investments, the financing component of the Investment Plan for Europe, he added.
($=0.8589 euro)