The Sustainable Cities Fund has signed two agreements with the Fund of Funds and is going to distribute over BGN 342 million as loans under preferential conditions
21 September 2018
United Bulgarian Bank (UBB), FLAG Fund, the Fund for Sustainable Urban Development (FSUD) and the Bulgarian Consultancy Organization (BCO), as a part of the especially established among them Sustainable Cities Fund (SCF), have concluded two operational agreements with the Fund of Funds for Sofia city and for Southern Bulgaria, by virtue of which they are going to distribute BGN 342.37 million. The funds are being disbursed under the financial instrument Urban Development Fund (UDF), financed under the Regions in Growth 2014 – 2020 Operational Programme and represents a continuation of the JESSICA initiative from the previous programming period (2007-2013).
Starting from the end of this year until end 2023 the partners are going to co-finance projects of total value BGN 342.37 million, as 59% of those will be co-financed by the Fund of Funds, while the remaining 41% will be ensured by the partners themselves. BGN 134.23 million out of those are intended for Sofia region, while BGN 208.14 million for Region South, as both regions encompass a total of 22 cities in 14 provinces.
Funds will represent loans for projects, relating to the urban environment, sporting and cultural infrastructure, environmentally friendly and sustainable city transport, energy efficiency of single-family residential buildings and university students’ dormitories, tourism and cultural heritage. Loans with alleviated terms, preferential fees and low interest rates will be available to municipalities, municipal companies, universities, firms, public-private partnerships and even natural persons (with energy efficiency projects).
The maximum period for repayment reaches up to 20 years for projects in the sphere of urban development and 15 years for projects in the energy efficiency domain. The maximum amount of loans for urban development purposes is BGN 40 million, while for tourism – BGN 20 million, if the site is of global significance, and BGN 10 million – if it is of national importance. In the general case the requirement is for 15% own funds, however exceptions are allowed for projects of particular significance.
The agreements were signed at an official ceremony by the partners in the SCF – Ms. Nadya Dankinova, Executive Director of FLAG Fund and of FSUD, and Mr. Stoyan Stavrev, Executive Director of the BCO, as well as by Mr. Peter Andronov, UBB’s Chief Executive Officer.
On the occasion of the announcement of the new financial instrument Peter Andronov, UBB’s Chief Executive Officer, stated:„ The co-funding of over 40%, to be provided by us as a financial intermediary, proves our willingness to support projects of social significance that are going to improve the quality of life in Bulgaria. We expect this new type of financial instrument to be applied as an ever-expanding practice within the new cohesion policy of the EU after Y2020“.