The UK, Austria and Belgium continue to be the three largest investor countries in Bulgaria, according to a Bulgarian National Bank (BNB) report on foreign direct investment for the first nine months of the year.

The report, published on November 13, said that the UK topped the list with 15.4 per cent of total FDI with Austria second (8.6 per cent) and Belgium closing in with 8.5 per cent.

In August, the picture was fairly similar. The distance between Austria and Belgium was 1.8 per cent, while a month later the two countries shared almost equal positions.

In August, the UK had a 12.5 per cent share of FDI, Austria 11.2 per cent and Belgium 9.4 per cent. The reason for Belgium’s growth was the acquisition by Belgium’s KBC of Economic and Investment Bank on September 28. KBC bought a 75 per cent stake in the bank for $418.28 million. This was KBC’s second major deal in the country this year after KBC bought 70 per cent of DZI Insurance company on January 30 for $239.94 million. These two deals pushed Belgium into the top three ranking of investor countries.

The UK’s leading position has not come from one or two major deals but from a series of lesser-scale deals, which gathered together form a solid investment in Bulgaria.

The leader is London-based venture capital company Equest Partners, which through subsidiaries and daughter companies has acquired shares in many Bulgarian companies. The best known is the refuse collection concession in Sofia. On March 2, Equest Partners bought 100 per cent in three companies, Chistota Sofia, DITZ and Volf 96, responsible for refuse collection in the city, for $59.23 million. On July 11, Equest Investments Balkans bought 33.5 per cent in Rila Samokov 2004, the landowner and developer of the Super Borovets ski resort project in Rila Mountain. The value of the deal was $35.61 million.

Maintaining the trend of mostly UK-based investment funds investing in Bulgaria, on June 27, Bulgarian Property Developments fund bought 50 per cent in the Vidin shopping mall project for $2.15 million.

One of the few exceptions was UK welding and cutting equipment producer ESAB. On October 19, ESAB bought 95.12 per cent in Electrodes JSC for $9.71 million.
As for Austria, the country’s biggest deal this year took place in May, when Austria’s CA Immo International bought a 100 per cent stake in Megapark Complex for $129.15 million.

Overall, FDI in Bulgaria for the first nine months of the country’s EU membership amounted to 3.8 billion euro or 14.2 per cent of GDP compared to 2.9 billion euro or 11.9 per cent of GDP for the same period last year.

Equity capital attracted in January to September 2007 amounted to 2.5 billion euro and its relative share in FDI was 66.1 per cent. It was 1.2 billion euro higher than in the same period of 2006. Receipts from real estate sales to non-residents are included in the equity capital. These amounted to 1.2 billion euro compared to 787.2 million euro for the same period last year.

Not surprisingly, the largest investments for January to September were in the real estate, renting and business activities (1.4 billion euro), financial intermediation (1.04 billion euro) and construction (488 million euro).

Figures for direct investment abroad (DIA) were not that promising compared to the level of FDI. In the first nine months of 2007, Bulgarian companies invested 126.6 million euro abroad, an increase compared to the 65.8 million euro for the same period in 2006. Last year was the most successful for Bulgaria, when companies invested a total of 136.8 million euro.