Migration has been an important component of Bulgaria’s integration into the regional and world economy, according to a new World Bank report entitled Migration and Remittances: Eastern Europe and the Former Soviet Union.

The World Bank issued a media statement about its report on January 16.

The report said that migration within and from the transition economies of Europe and Central Asia had been large and would likely continue to increase as declining birthrates across much of the region would lead to an increased demand for a young labour force, the report said.

It had been well publicised that migration to Western Europe had increased significantly over the past 15 years, with Western Europe receiving 42 per cent of migrants from Central and Eastern Europe, as well as growing numbers of migrants from the former Soviet Union. What was less known is that on a global level, Germany and France were the only Western European nations in the top-10 migrant-receiving countries. Russia was number two, and Ukraine, Kazakhstan and Poland were also in the top 10.

Remittances were one consequence of migration that benefitted both the migrants’ families and their home countries, the World Bank report said. For many of the poorest countries in Eastern Europe and Central Asia, they were the largest source of outside income and had served as a cushion against the economic and political turbulence of the past 15 years. Remittances represented more than 20 per cent of GDP in Moldova and Bosnia and Herzegovina and more than 10 per cent in Albania, Armenia, and Tajikistan.

Surveys done for the report found that in Bulgaria, 80 per cent of migrants did not send remittances. Bulgaria was at the bottom end of the 28-country rankings of remittances as a portion of GDP, the growth rate of remittances in 1995-1998 and 2001-2004, remittances as a share of exports in 2003, and remittances as share of total household expenditure in 2004, according to the World Bank report.

On January 11, Bulgarian news agency BTA reported that World Bank was to lend 40.9 million euro to Bulgaria for a second project to facilitate trade and transport in South Eastern Europe.

This was according to an announcement by the Cabinet media office. On January 11, the Cabinet decided to propose to Parliament to approve the start of negotiations and the conclusion of an agreement for the loan.

The 54.6 million euro project will be co-financed with 13.7 million euro from Bulgaria’s public coffers. The World Bank loan is to be repaid in 17 years, with a five-year grace period.

The project is designed to promote Bulgaria’s competitiveness and expand its market access within South Eastern Europe and in the EU by strengthening regional trade and transport and by optimising the use of the Trans-European transport network.

The funding will go towards upgrading the country’s two major border checkpoints, Kapitan Andreevo (on the border with Turkey) and Kalotina (on the border with Serbia), and other checkpoints along the borders with Serbia, Turkey and Macedonia and along the Black Sea coast.

A future 3.4km access road will link the Maritsa Motorway with Kapitan Andreevo. Another measure is to upgrade the communication system between border services.

As a result of the project, border checkpoints will acquire new checking facilities. The duration of control procedures for heavy-duty trucks will be significantly reduced. On January 16, the European Bank for Reconstruction and Development (EBRD) said that it wanted to finance the modernisation of Bulgaria’s Black Sea airports and ports or acquire stakes in the ports.

At the Euromoney Central and Eastern European Forum in Vienna, Alexander Auboeck, Business Group Director Infrastructure at the EBRD, told wire agency SeeNews that the EBRD was interested in financing the investments in the Bulgaria’s key airports on the Black Sea, in the cities of Varna and Bourgas, by providing a loan to the concessionaire, Germany’s Fraport.

“I can only say that we are very interested in airport investments because we have financed concessions in the past in Albania, in Georgia and Armenia,” Auboeck said. Fraport, together with Bulgarian company BM Star, won a concession to operate and upgrade the Black Sea ports of Varna and Bourgas last year. It has pledged to invest more than 403 million euro for 35 years in building new terminals, expanding apron areas, and the purchase of airport vehicles and equipment for the two airports.

Auboeck said that the bank was already in talks with Fraport but it depended on the German company to decide whether it would be financed by the EBRD or another bank. EBRD is the largest investor in Bulgaria having committed nearly 1.4 billion euro to projects in all sectors of the economy.

Meanwhile, it emerges that a total of 66 projects have been financed under the credit line for energy efficiency in the industrial sector in Bulgaria. The loans amount to more than 65.7 million euro. The capacities will generate over 354 400 mWh of electricity and 430 400 mWh of heating energy. The measures will save about 344 000 tons of carbon dioxide emissions.

An EBRD credit line was opened to support projects for energy efficiency and renewable energy sources in the private sector by using financing from the Kozloduy International Decommissioning Support Fund.

A total of six banks service the credit line: Bulbank, HVB Bank Biochim, DSK Bank, Untied Bulgarian Bank, Raiffeisenbank, Postbank.

The limit for a single bank ranges between 500 000 euro and two million euro. Bonuses are provided for the implementation of projects: 7.5 per cent of the principal for energy efficiency and 20 per cent of the principal for renewable sources.

However, a January 12 report in Bulgarian newspaper Banker said that a major problem in the financing of energy efficient projects in Bulgaria was the lack of experience and prepared experts in the field.

The newspaper said that this was why at this stage banks in the country chose to count on collaboration with international crediting institutions. The most common alternative so far has been the launching of credit lines from the European Bank for Reconstruction and Development, the World Bank and the European Investment Bank.

Separately, it was announced that a total of 4 928 704 euro will be provided in the form of a loan of Encouragement Bank for support of micro-, small and medium-sized enterprises. The funds are within the framework of the 2001 Agreement for Financial Co-operation between the governments of Bulgaria and Germany. The funds will be used to refinance investment projects in the enterprises through the mediation of commercial bank partners.