The European Bank for Reconstruction and Development (EBRD) is lending a total of 15 million leva to two Bulgarian banks, one for a programme to help small and medium enterprises (SMEs), the other to promote energy efficiency.

The EBRD is the largest investor in Bulgaria having committed nearly 1.4 billion euro to projects in all sectors of the economy.

The loan to United Bulgarian Bank, of 10 million euro, is a sequel to a 15 million loan from the EBRD to assist more than 20 private companies improve their energy efficiency. under a programme for industrial energy efficiency and renewable energy sources.

The programme in terms of which the loan was given was set up in 2004 by the EBRD, the Kozloduy International Decommissioning Support Fund, and the Energy Ministry.

The Industrial Energy Efficiency and Renewable Energy Framework originally comprised 50 million euro of EBRD financing made available to six participating banks, and was extended in 2006 with the EBRD making available a further 55 million euro.

Under the framework, participating banks such as UBB receive funds from the EBRD that they on-lend to private-sector industrial enterprises. Businesses use the financing to improve energy efficiency by, for example, introducing better energy consumption, automation, control and heat recovery systems, and promote the use of renewable energy technologies.

The EBRD has agreed to lend Commercial Bank Allianz Bulgaria five million euro to support the development of local small and medium-sized enterprises.

The loan is being given under the EU/EBRD SME Finance Facility and is being complemented by a one million euro grant from the European Commission for technical assistance and financial incentives.

CB Allianz Bulgaria said that it intended to use the EBRD loan and the EC grant to streamline its approach to SME lending. The EBRD has an important strategic partnership with Allianz Group, whose parent company Allianz AG is the largest insurer in the EBRD’s countries of operations.

The EU/EBRD SME Finance Facility, a joint programme of the European Commission and the EBRD, supports the development and growth of SMEs by facilitating their access to finance.

Under the program, the bank has made available funding of 1.1 billion euro in a number of countries. Projects worth a billion euro have already been funded from the facility. The EC has contributed 156.75 million euro in grant financing since the launch of the program in 1999.

In September, the EBRD said that it would give up to 250 million euro to financial intermediaries in Romania and Bulgaria and EU candidate Croatia for on-lending to SMEs.

Allianz Bulgaria commercial bank is part of Allianz Bulgaria Holding, which also runs three insurance companies and a pension fund. It has a network of 100 branches and representative offices and was the 14th largest bank by assets in Bulgaria at the end of July.