Bulgarian Development Bank to raise capital by over 1bn euros, no state money involved

Economy, investment and industry minister Alexander Pulev says the Bulgarian Development Bank will raise its capital by more than 1bn euros, and not a single lev will come from the state budget. The bank will raise the money on the market, with the state staying as the main shareholder and keeping control.

The fresh funds will come from long-term loans from international financial bodies and other investors, on terms the bank calls competitive market terms. Pulev called the plan realistic and said it won't put any strain on the budget. Talks with several financial institutions and foreign development banks are already under way, he said, and they have a positive view of the direction the bank is taking.

"The BDB will sit at the heart of the state's economic policy," the minister said. He said the bank has already carried out structural reforms and set up a unit to attract and direct investment.

Pulev also announced three new names on the bank's supervisory board: Daniel Berg, Ivan Kutlov and Ivan Raichkov. Delyana Ivanova stays on as chair of the board.

Berg has more than 35 years' experience in the field. He spent over twenty of them at the European Bank for Reconstruction and Development, where he also covered Bulgaria. He has run investment portfolios in both the public and private sectors. Kutlov has over three decades in the sector and has held senior posts at UBB, with work spanning financial control, capital markets and investment banking. Raichkov has more than 30 years' experience, over 26 of them in finance, covering banking operations, risk management and payments.

"This is a team with real professional experience, an international outlook and a clear job to do — turn the BDB into an even stronger tool for investment, business growth and drawing private capital into Bulgaria," Pulev said.

The bank will also roll out new financing products covering the whole value chain. The support is aimed at small and medium-sized firms, Bulgarian producers, manufacturing, strategic investments, and municipalities and regions. The goal is for Bulgarian goods to win a stronger spot in supply chains and on the market, through more competitive financial products and cheaper lending.

The BDB will also help prepare public-private partnerships and bring in private money for them. The economy ministry recently signed a memorandum with the European Bank for Reconstruction and Development to prepare and structure such projects, and the minister said work on the partnership legislation is in its "final stretch."

Delyana Ivanova said the bank will do what's needed on its priorities — drawing in strategic investment, driving growth and creating jobs. Pulev added that the BDB will soon take an active role in modernising the country's infrastructure.

Follow-up: Bulgarian development bank to borrow over 1bn euros abroad while 1.4bn euros stay frozen