EBRD lends EUR 35 mln to Piraeus Group Bulgaria

More support for Bulgarian SMEs, green and municipal projects

London, United Kingdom – The EBRD and Piraeus Group, one of the leading Bulgarian banking groups, are teaming up to increase support for small and medium-sized enterprises (SMEs), energy efficiency and renewable energy investments, as well as infrastructure projects in small and medium-size municipalities, with grant support provided for the projects by the European Commission.

Piraeus Bank Bulgaria, the banking subsidiary of Piraeus Group in Bulgaria, will receive EUR 15 million loan under the EU/EBRD SME Finance Facility* to on-lend to small and medium-size businesses in Bulgaria to help finance their investment and working capital needs.

Another EUR 10 million loan will be provided to Piraeus Leasing, the leasing subsidiary of Piraeus Group in Bulgaria, under the joint EU/EBRD programme which promotes leasing finance for SMEs in Bulgaria. Both EBRD loans to Piraeus Bank and Piraeus Leasing will be complemented by grant support from the European Commission, including technical assistance services.

The EBRD is also lending EUR 5 million to Piraeus Bank Bulgaria under the EU/EBRD Small and Medium Municipalities Finance Facility to finance long-term infrastructure projects in small and medium-size municipalities in Bulgaria, which are municipalities with population of up to 150,000 individuals. Under this programme, Piraeus Bank will finance road rehabilitation, water supply and water treatment, district heating systems, public transport and social infrastructure projects extending long-term loans with a tenor of up to 20 years. The European Commission is providing grant funds for technical assistance to support both Piraeus Bank and the municipalities in structuring eligible projects as well as for financial incentives.

The EBRD is lending another EUR 5 million to Piraeus Bank Bulgaria under the Bulgarian Energy Efficiency and Renewable Energy Framework** for energy efficiency and small renewable energy projects. Companies receiving loans under this Framework will benefit from a grant of 15 percent of the amount of the loan for energy efficiency investments. A grant of 20 percent of the loan amount will be payable to companies undertaking small renewable energy projects. Grant support for the project is provided by the EC supported Kozloduy International Decommissioning Support Fund.

Olivier Descamps, EBRD Business Group Director for South East Europe, Central Asia and the Caucuses, said that the Piraeus Group is an important partner to the EBRD in reaching out to smaller businesses and municipalities in Bulgaria and providing much needed financing to supporting growth of the entrepreneurial sector. Partnerships with banking groups like Piraeus enable us collectively to enhance the competitiveness of local enterprises, as well as improve the infrastructure necessary to boost economic growth and provide better living conditions for the people. The grant support provided by the EC, particularly in the form of technical assistance, is an invaluable component of all four projects with Piraeus, adding greatly to the sustainability of these financing activities in Bulgaria, Mr Descamps said.

Athanassios Koutsopoulos, CEO of Piraeus Bank Bulgaria and President of Piraeus Leasing Bulgaria, said: The loan agreements that we have signed today with the EBRD mark an important development for the Piraeus Bank’s position on the market. This opportunity will allow us to reach out to more clients and help them become more energy efficient and meet the challenges of the EU market and regulations. The municipalities’ project, is the first of its kind in Bulgaria and we are proud to be pioneers in this area with the help of the EC and EBRD."

Piraeus Bank Bulgaria, part of Piraeus Bank Group has been present in Bulgaria since 1994 and is one of the most dynamically developing financial institutions on the Bulgarian market. It is a universal bank, specialized in corporate banking, retail banking, SMEs, capital markets, investment banking and leasing. At the beginning of 2005 Piraeus Bank acquired the Bulgarian Eurobank and presently the Bank ranks among the top ten biggest banks in the country. It has 71 branches and its assets amount to over EUR 1.4 billion.

The EBRD is the largest investor in Bulgaria with more than EUR 1.3 billion committed to projects across the country. Working with its many partners, the Bank has mobilised more than EUR 5.4 billion for projects in Bulgaria.

* The EU/EBRD SME Finance Facility and the EU/EBRD SMM Facility are joint programmes of the European Commission and the EBRD, supporting the development and growth of entrepreneurs as well as infrastructure investments in small and medium size municipalities by facilitating their access to finance. Under these regional programmes covering 11 countries, the EBRD has committed EUR 1,1169.5 million to date, supported by EUR 157.6 million in grant financing and technical assistance from the EC since the launch of these Facilities in 1999.

** The Bulgarian Energy Efficiency and Renewable Energy Framework was launched in 2004 in cooperation with the Bulgarian Ministry of Energy and Economy and the Energy Efficiency Agency to support Bulgarian enterprises to undertake energy efficiency investments as well as small renewable energy projects. The total financing committed by the EBRD under this Framework in Bulgaria to date is EUR 105 million. Total grant funding provided by the Kozlodui International Decommissioning Support Fund is EUR 25.2 million.