By Vice President Lilyana Pavlova, European Investment Bank
The future of our planet will be decided by the way we build our cities.
As the COVID-19 crisis continues to hurt economies around the world, public budgets are getting cut and many urban projects are being cancelled. Cities no longer have enough financing to launch projects that reduce air pollution, protect roads from flooding or improve drinking water. Cities already use more than two-thirds of the world’s energy and other resources, and this percentage is
rising as their populations grow.
Cities are major hubs of employment, trade and innovation. They are the engines of economic growth. They give a country most of its culture and identity. In Bulgaria, 75% of the population lives in urban areas. Most of the country’s economic output is generated in the seven largest cities.
Supporting urban development in Bulgaria will help the country’s economy today and prepare it for many challenges in the future. Urban infrastructure projects take a long time to plan and build, and they can’t be changed quickly, so we need to get this right the first time. The time for a new conversation about urbanisation is now.
The European Investment Bank (EIB) has been supporting Bulgaria since 1992. That is why we know that Bulgarian cities need a lot more investment. Technical assistance and advisory support can help identify, prepare and implement these projects. The investments will help boost Bulgaria’s economy, which is why the EIB is working hard to expand its work in many cities across the country.
A transition that is fair for everyone
The transition to a sustainable, low-carbon society will lead to significant changes in our economies and our way of living. We must make massive investments in the modernisation of cities and in the switch away from fossil fuels. This requires big changes to transport, energy use, power generation and industrial production. This is also a huge opportunity to increase the competitiveness of our industries, create jobs and grow the economy.
The transition to a green society will not be easy. Not all regions and sectors have the same starting point. We need to ensure that this transition does not hurt some parts of society while helping other parts. Nobody should be left behind when industries change and jobs evolve. We need to create newindustries and offer more training to help everyone make the transition successfully.
Helping the economy and fostering social cohesion are key parts of the European Investment Bank’s mission. The European Commission and the EIB will keep working together to support cohesion across the European Union. As the EU’s climate bank, our environmental goals go hand in hand with economic development and social cohesion.
In the mining region around Plovdiv, KCM has long refined metals, primarily zinc and lead. Today, the company is upgrading its business to process metals more efficiently, protect the health of its 1,500 workers and meet stricter environmental regulations. The EIB signed a €65 million loan with KCM in 2019 to help upgrade its processes and increase its use of zinc and lead from recycled materials such as batteries, furnace dust and oxides, rather than mining for new metals. The loan is backed by the
European Fund for Strategic Investments, as it supports an innovative company that is the only provider of lead and zinc in central and south-eastern Europe.
Climate Action
To help cities and regions reduce carbon emissions, we must support new industries that don’t hurt the climate. We need to back research and development and help more innovative technologies make it to the market. This protects the climate, but it also creates jobs and lifts the economy.
The EIB is stepping up its technical and financial advice to help clients fund their new ideas and grow. A good example of this support is the plan in Stara Zagora to build a virtual reality lab and upgrade the country’s first Digital Innovation Hub. Our experts from the European Investment Advisory Hub are helping make the city’s project a success while minimising the financial risk.
City and regional authorities around Europe are realising that climate-friendly policies have immediate benefits to the quality of life and the economy. For example, the EIB is helping Bulgaria improve its water supply. This project will dramatically reduce waste, as half of every litre of water pumped into pipes is “lost” because of leaks or other problems. Bulgarian environmental officials signed an EIB Project Advisory Support Service Agreement, known as PASSA, to receive technical advice on kick-starting an estimated €1 billion worth of water projects across the country.
Advisory assistance
In the European Union, cities often struggle to complete infrastructure projects because they lack the knowledge to plan the projects and they can’t find the right financing in the early stages. The EIB has been offering advisory support to cities in Bulgaria for a long time. Bulgaria is one of the largest beneficiaries of EIB support for technical and financial advice. The Joint Assistance to Support
Projects in European Regions, known as JASPERS, is helping Bulgarian authorities prepare projects supported by the EU Structural and Investment Funds. Many of these projects involve loans from the EIB.
A good example of a JASPERS project is the Sofia metro, which also received financing from the EIB. With the European Commission, we are helping add emergency care services across the country, even in remote areas. JASPERS was involved at an early stage to help define and prepare this project. JASPERS has completed 130 advisory assignments in the Bulgarian public sector, supporting 99 projects with a total investment value of more than €9 billion.
This year, the EIB’s European Investment Advisory Hub also agreed to help Burgas prepare a project to build the first children’s hospital in Bulgaria. The Hub will help complete a feasibility study and preliminary designs for the hospital. The new hospital will use zero-emission technology and be linked to the Burgas University hospital. This is an example of the Hub’s continuous cooperation with
the Fund Manager of Financial Instruments in Bulgaria (FMFIB) to improve city infrastructure projects and support research and innovation using EU funds.
More activities across the country
Since starting its work in Bulgaria, the EIB has provided €5.5 billion for projects that reduce regional disparities, increase people’s living standards and make businesses more competitive. The bank financed major roads and the expansion of the Sofia airport. We also helped Sofia develop an integrated waste management system that contributes to the circular economy, reduces greenhouse gases and produces renewable energy.
Now we aim to do more activities outside Sofia. This summer, we signed a loan with Fund FLAG, to support urban regeneration in cities across Bulgaria. This operation will complement other activities supported under the EU-funded Urban Development Fund 2014-2020. Thereby providing more financing, but also substantially extending the geographic reach of our work. This is a unique opportunity to help smaller cities improve transport, energy efficiency, environmental preservation, social activities, tourism, and water or sewage systems.
In January 2020, the EIB, FMFIB and Fund FLAG agreed to create the Bulgarian Urban Investment and Advisory Platform. This will establish a new mechanism for cooperation and ensure even more financing for urban development in Bulgaria. This is a stellar example of the cooperation needed to complete municipal projects quickly and improve the quality of life across the country.
In addition, the EIB will continue to support small and large businesses, giving a priority to innovation. In 2019, the EIB Group helped 3,800 business and supported nearly 80,000 jobs in Bulgaria.
As we build back our societies and businesses following the COVID-19 crisis, we must pay special attention to urban development and make sure we build cities that will prosper today and far into the future. I invite you to join us in this work that benefits everyone.