New guarantee instrument to generate up to €800 million of financing to support SMEs and mid-caps under the JEREMIE Initiative
Financing will be provided by ProCredit Bank, United Bulgarian Bank, Eurobank Bulgaria, UniCredit Bulbank, Raiffeisenbank and DSK Bank
Some 6 000 small businesses are expected to benefit as part of the EIB Group's response to the COVID-19 crisis

The Ministry of Economy of the Republic of Bulgaria and the European Investment Fund (EIF) have agreed to boost the measures helping small businesses stem the impact of the COVID-19 crisis using proceeds from the JEREMIE initiative, which was co-financed by the European Regional Development Fund (ERDF) in the 2007-2013 period.

The new guarantee instrument is expected to generate up to €800 million of fresh financing and documentary credit for small and medium-sized enterprises (SMEs) and small mid-cap companies in Bulgaria, allowing them to address their financing needs and continue operations. The financing will be made available through the six commercial banks, ProCredit Bank, United Bulgarian Bank, Eurobank Bulgaria, Raiffeisenbank, UniCredit Bulbank and DSK Bank.

The new guarantee instrument supports working capital loans to hard-hit small businesses in Bulgaria that are facing disruption in their production or sales and are therefore affected by a liquidity squeeze due to the COVID-19 pandemic. Local companies will be able to mitigate these liquidity shocks by gaining access to working capital finance with reduced collateralisation requirements and/or interest rates. The new guarantee instrument will also support factoring transactions for the first time under the EIF’s guarantees in Bulgaria.

Alain Godard, EIF chief executive, stated: “These transactions are a good example of the excellent cooperation between the EIF, the European Commission, the Bulgarian authorities and commercial banks for the benefit of small businesses in Bulgaria. Thanks to the JEREMIE Instrument guarantees, Bulgarian SMEs will be provided with financing and documentary credit of up to €800 million. This will help them face up to the challenges stemming from the current COVID-19 crisis, as they are typically among its first victims.”

Lilyana Pavlova, EIB vice president, commented: “The COVID-19 crisis is having a major impact on the EU economy. The EIB Group is a key part of the European Union’s response to the pandemic. We are very pleased to announce €800 million of new financial support under the JEREMIE initiative that is expected to benefit some 6 000 small and medium-sized businesses. I want to thank our partners for the excellent cooperation and we stand ready to continue supporting the Bulgarian economy in the post COVID-19 recovery period.”

The JEREMIE Initiative in Bulgaria is an example of a successful financial instrument supported by the EU budget. It has so far financed some 10 000 businesses in Bulgaria with loans and equity investments totalling approximately €900 million. The proceeds generated from these investments in the form of principal repayments and interest that flow back to the fund manager are currently being reinvested in new instruments.

Background information:

About the EIF
The European Investment Fund is part of the European Investment Bank Group. Its central mission is to support Europe's micro, small and medium-sized businesses by helping them to access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments, which specifically target this market segment. In this role, the EIF fosters EU objectives in support of innovation, research and development, entrepreneurship, growth and employment.

About JEREMIE
The Joint European Resources for Micro to Medium Enterprises (JEREMIE), is a joint initiative set up in 2007 by the European Commission (Directorate-General for Regional and Urban Policy) in cooperation with the European Investment Bank Group and other financial institutions to enhance cohesion across the European Union. It promotes the use of financial engineering instruments to improve access to finance for SMEs in a flexible and innovative way, thanks to the support provided by the European Regional Development Fund in the 2007-2013 period. The EIF is currently managing the proceeds of initial operations carried out in Bulgaria and reinvesting them in new operations in support of local businesses

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