The government has decided to add €40m to the capital of FLAG Fund, the state-owned fund that lends to Bulgarian municipalities, the Council of Ministers press office said. The money will let the fund finance more projects by municipalities and public companies in the 2021–2027 EU funding period.
The state is the fund's sole owner. In return for the payment, it gets 78,233 new shares at €511.29 each. The money comes from the 2026 budget of the Ministry of Regional Development and Public Works, and the cabinet approved the budget changes by decree.
The cabinet says the fund will be able to meet its existing commitments on managing financial instruments and take on new ones. The government believes the decision will support municipalities with approved projects and help them close out the funding period successfully.
Much of the fund's earlier capital went to projects under the Recovery and Resilience Plan. FLAG has backed more than 1,700 municipal projects and has lent nearly €1.4bn.
The fund's chief executive, Nadya Dankinova, said in October that municipalities will have access to nearly €300m through urban development funds. She spoke at the plenary session "Horizons 2030: Municipalities on Bulgaria's European Path" at the Annual Meeting of Local Authorities in Albena.