EIB and Fund FLAG sign €25m loan to promote urban regeneration in Bulgaria

Fund FLAG will match the loan amount with €25 million of its own resources and channel the total €50 million to municipalities, municipal enterprises and other institutions responsible for providing public services.

The European Investment Bank (EIB) and Fund FLAG have signed a €25 million loan to promote urban regeneration and rehabilitation in cities across Bulgaria. Fund FLAG will match the loan amount with €25 million of its own resources and channel the total €50 million to municipalities, municipal enterprises and other institutions responsible for providing public services.

Fund FLAG will support investments for upgrading urban green areas and open public spaces, improving sustainable urban transport and renovating and reconstructing public buildings (schools, health centres and administrative buildings). In addition, it will focus on upgrading small-scale basic municipal infrastructure (road network, drinking water and sewers) and climate change adaptation measures.

This operation forms part of a wider collaboration to increase the firepower of cohesion funding for urban development. Earlier this year, the EIB, the Fund of Funds (Fund Manager of Financial Instruments in Bulgaria) and Fund FLAG established the Bulgarian Urban Investment and Advisory Platform. Financed by the European Investment Advisory Hub, this platform aims to benefit Bulgarian municipalities by coordinating the efforts of funding and advisory partners, both at EU and national level and bringing together EU cohesion funding with EIB lending and advice via dedicated urban development financial instruments and intermediaries.

"As we rebuild our economies following the COVID-19 crisis, we must pay special attention to urban development and make sure we build cities that will prosper today and far into the future," said EIB Vice President Lilyana Pavlova. "The loan we signed today marks an important step in the EIB's support for Bulgarian cities. It will make a positive contribution to economic growth and job creation, reducing energy bills for consumers and increasing the attractiveness of urban areas as business locations and tourism destinations. The EIB's support for Fund FLAG will also play an important role in its facilitation capacity so that additional EU structural funds can be absorbed by the respective beneficiaries with the goal of supporting urban development. As the EU bank, we are committed to continuing to play our key role in supporting cohesion and climate action projects across Bulgaria through our lending and advisory activities."

"The financing contract with the EIB is another step forward for Fund FLAG and financial instruments for urban development. By pursuing its mission to support the Bulgarian local authorities in their efforts to build sustainable, green and dynamically developing Bulgarian cities and regions for the last 13 years, FLAG has established itself as a reliable and preferred partner," said FLAG Executive Director Nadia Dankinova. "We are confident that the implementation of the platform will fill a financing gap for important investment projects arising from municipal investment programmes. The partnership with the EU bank and the Bulgarian Fund of Funds is strategic and we are confident that it will be a long-term and very successful one. We are fully ready to start offering the product, structured with this financing contract, and to contribute to speeding up the economic recovery and the sustainable development of Bulgarian municipalities and regions."