MKB Unionbank, DSK, United Bulgarian Bank (UBB), Raiffeisenbank Bulgaria, DZI and Postbank are some of the Bulgaria financial institutions offering energy efficency loans.

MKB Unionbank (MKBU) press officer Borislav Yordanov spoke to The Sofia Echo on the bank's development in this field. Yordanov said that MKBU started offering energy efficiency loans in March 2004. That year, the bank concluded an agreement with the European Bank for Reconstruction and Development (EBRD) for the amount of three million euro on this credit line.

"Those loans enjoyed big success and big demand for them was recorded, and the money was absorbed in a very short period," Yordanov said.

In the summer of 2007, MKBU concluded a new contract within the programme for energy efficiency support, this time for five million euro. The bank has an agreement with EBRD to finance only private companies for energy efficiency and renewable energy production.

So far, within the first transaction of three million euro, MKBU financed nine projects for energy efficiency and two for renewable energy sources. In total, loans granted amounted to 1.92 million euro and 1.08 million euro, respectively.

Of the nine energy efficiency projects, three belonged to one and the same company. Yordanov said the credit term was mostly from three to five years.

The conditions that applicant companies have to meet include that the firm is registered and operate in Bulgaria, and that its activities do not include production, marketing or distribution of tobacco and alcohol products, gambling, guns and activities included in a special list of projects excluded by EBRD ecological policy. Borrowers' activities also have to correspond to national ecological, health and labour protection norms.

"Our clients also receive full set of free of charge consultancy assistance, ensured by EBRD (...)," Yordanov said. EBRD also hires an independent energy expert to certify that the projects are fulfilled in accordance with the loan. Energy efficiency loans that have been approved by MKBU include reconstruction, modernisation and improvements to existing equipment and facilities to reduce energy consumption.

The loans are from 20 000 to 1.5 million euro. The energy efficiency loan borrower's own participation should be at least 20 per cent of the invested amount, excluding Value Added Tax (VAT). Yordanov said that there was a gratis period of not more than 12 months until project completion.

All renewable energy projects that have been implemented successfully would receive 20 per cent of the loan granted as a subsidy from MKBU. Companies that have successfully executed energy efficiency projects would receive a subsidy amounting to 15 per cent of the loan granted.

Postbank and DZI Bank (P & DZI) are also active partners of the EBRD in the programme "credit line for energy efficiency and renewable energy sources for Bulgaria", in financing corporate clients. P & DZI corporate communication manager Iliana Zaharieva told The Sofia Echo that projects applying for such grants were considered individually with a view to their investment effectiveness, ability of the company to fulfil the project and to service the credit and the offered coverage. P & DZI also offers free-of-charge consultancy on preparing a business plan and its verification by a consultancy company that is an EBRD partner.

Zaharieva said P & DZI had been granting clients loans for energy efficiency projects since September 2005. So far, about 20 per cent of consumer loans were for such projects. The interest for the whole period of eight years is 11.9 per cent up to 15 000 leva, and there is no fee for bank scrutiny of the application documents. There is only a fee if the loan is granted, amounting to 0.75 per cent of the sum. P & DZI also gives a VISA Electron credit card as a bonus to its clients.

She said that the results achieved in the loan programme were good. Most applications came in during the warmer months. In addition, Zaharieva said that most of the loans were granted for joinery change with energy saving windows, as well as for insulation and air conditioning systems.

UBB, which also participates in the EBRD program and the Energy Efficiency Agency programme, grants such loans to households. After successful completion of an energy saving project, UBB returns 20 per cent of the costs.

UBB gives loans for insulation of walls, ceilings and floors, purchase and mounting of joinery, gas boilers, biomass heating devices, sun collectors for warm water, and thermal-pumping systems for house heating and air conditioning.

For customers who apply for loans of less than 5000 leva, UBB does not require an income document. The amounts granted by the bank are between 500 and 8500 leva.