Bulgarian municipalities have received loans of more than 28 million leva under the European Investment Bank’s (EIB) programme for encouraging investment projects, the UniCredit Group, which implements the scheme in Bulgaria, said in a statement on February 1.
Under the programme, municipalities are offered preferential interest rates.
At the same time they can receive up to 2.5 per cent of the project value as a grant.
The amount can be used to partially cover the principal or interest of the loan.
The financing was provided to the municipalities within a year and a half since the conclusion of an agreement on co-operation between the EIB and HVB Bank Biochim, which is part of UniCredit Group.
A total of 350 000 leva has been recently lent by UniCredit’s HVB Bank Biochim to the municipality of Polski Trambesh. The proceeds will be invested in a remodelling and updating of the town’s street lighting.
The statement said that the municipalities of Sofia, Montana, Chepelare, Gorna Oryahovitsa and Tervel were successfully using their loans.
On February 5, wire agency SeeNews reported that the water utility company in the third-largest Bulgarian city of Varna was seeking a 15 million euro bank loan to finance upgrades of its infrastructure.
VIK Varna needs a long-term investment loan it will use for reconstruction and expansion of the water supply network in the region of Varna, the company said in a statement.
Banks have a March 26 deadline to place their offers for the loan, to be repaid within 15 years with a two-year grace period. The bids will be opened two days later.
The Varna region, official population 489 800, is a major holiday destination for foreign and domestic tourists in the summer. The city’s economy has been growing fast in the past decade and the ensuing rise in workforce numbers has put its outdated infrastructure under increasing pressure.
The city of Varna has a BB long-term foreign and local currency issuer credit ratings with stable outlook by Standard & Poor’s, SeeNews said.
On February 2, it was announced that Raiffeisenbank Bulgaria is to give a 10.5 million euro 15-year investment credit to the municipality of Haskovo. The bank was chosen to finance the municipality by public procurement procedure. The loan will be used for refinancing of long-term municipal debt and for construction, reconstruction and rehabilitation of roads. In the past two years, Raiffeisenbank has extended 14 credits and municipal bond loans worth more than 138 million leva.
