Spain's over-development of its coastline for tourism and second homes, eventually leading to government approval for a coastline facelift worth billions, has had its upside.

The hyperactive construction period nurtured expertise in real estate, construction and construction-related industries and led to financial strength matching Europe's best. It helped the three sectors leapfrog the lull created by over-development at home and hit buzzing real estate markets elsewhere.

And Bulgaria was not a market to miss. Spain's hands-on operations in the past three years were so intense as to transform its history of investment in Bulgaria beyond recognition. Projects by developers Riofisa, Urbas, Detea, Ferry Group and a dozen of their peers raised the value of annual Spanish investments in Bulgaria from the tens to hundreds of millions of euro.

In 2006 and 2007 alone, Bulgaria attracted 621.6 million euro in Spanish investments, which is five per cent of total foreign direct investments (FDI) for the period, figures from the Bulgarian National Statistical Institute (NSI) show. It is a measure of the impact that realtors have had that investment over those two years alone almost equalled the 683.5 million euro total for 2000-2008.

The Spanish construction bonanza is likely to persist and keep Bulgaria's investment pipeline full as companies continue to discuss future real estate projects. The most recent - and perhaps with the most money-to-spend - entry is Hercesa Inmobiliaria. Unlike its peers, which hurriedly backtracked on projects in the face of tight lending, it announced in September 2008 it would spend 500 million euro on two new residential compounds in Sofia, and would seek additional plots for commercial developments.

Big proprietary projects have not been the only channel for Spanish developers' penetration into Bulgaria. Another is through winning and carrying out public contracts. A good example is FCC Construccion SA. The Spanish firm has been tipped to build Bulgaria's Danube Bridge 2 at Vidin-Calafat and its adjoining infrastructure for 216 and 62.6 million euro, respectively.

CYES, with annual public contracts worth 220 million euro a year, has shown interest in tapping into EU-financed municipal projects in Bulgaria. The focus of its attention is Pleven, north central Bulgaria, and its plans to build solid waste recycling plants and a water treatment plant.

A third reason for Spanish penetration into Bulgaria is outsourcing by construction-related industries. Iniciativas Estrategicas, now part of Italcementi Group, in 1998 privatised Bulgaria's largest cement plant, Devnya Cement. Roca Bulgaria, until recently the largest Spanish investor, has since 1999 been manufacturing flooring, wall tiles and bathroom fittings. Rivals Keros Ceramica will soon open a ceramic flooring and tile-making plant in Rousse. And MTM Grup is interested in building a construction materials factory as well as a housing complex in Bobov Dol.

These companies' foreign expansion interest Spanish financial institutions. Banco Popular has said it is ready to finance up to 75 per cent of the value of local investment projects worth at least one million euro.

But restricting investment only to real estate, construction and construction-related activities, would sideline Spain's efforts in the energy, transportation, metalworking and food processing industries. The Bulgarian Ministry of Economy and Energy cites the Spanish subsidiary of German haulier Willi Betz, cast iron fittings and castings manufacturer Berg Montana Fittings, and meat processor Carol Fernandez Meat among Spain's top investors in Bulgaria. Media cited Ebame Associates, among other Spanish energy companies, as seeking opportunities to build solar and wind power plants in the country. Others are considering biofuel production here.

While in recent years there has been a sharp upswing in investment, bilateral trade turnover has had a slower but also tangible increase. Annual trade between Bulgaria and Spain almost tripled from 216.7 million euro in 2000 to 638.0 million euro in 2007, according to NSI and Customs Agency data.

Year-on-year, while trade turnover has been increasing, imports and exports have not. The main reason, the Bulgarian-Spanish Business Council says in a research paper, is the often sporadic nature of export and import contracts. Hence the volatility in trade volumes.

As evidence, look at 2007. Bulgaria's exports to Spain in FOB prices decreased 16.7 per cent in the year to 632.4 million euro in what was a reversal from a 25.5 per cent rise the year before. Imports in CIF prices were up 34.3 per cent on the year to 623.2 million euro.

The sporadic nature of contracts has also meant a different trade structure. Yet the categories that are a permanent feature are flat-rolled steel products, wheat and cereals, and textiles. Import items of note are cars and light utility vehicles, flooring tiles and textiles.

In 2007, Spain was the 13th largest importer of Bulgarian goods and the 17th largest exporter in Bulgaria.

 In a typical trend for its trade relations with EU member states, Bulgaria has traditionally run a surplus with the Iberian country. The sole exception was 2003, when the deficit was 32.9 million euro.

Despite fluctuations, the figures show a fast upward trend in bilateral trade and investments. Whether the heightened interest in recent years will become more sporadic, or mark the start of more intense bilateral co-operation, will become clear in a few years' time.