For the European Structural and Investment Funds (ESIF) 2014-2020 programing period, Bulgaria has decided to implement Financial Instruments (FIs) foreseen in its Operational Programmes (“OPs”) via a national vehicle in the form of a Fund of Funds (FoF). For this purpose, the Fund Manager of Financial Instruments in Bulgaria (FMFIB) was created in July 2015, as a 100%-State owned entity, with the primary mission to manage ESIF co-funded financial instruments in the country.

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Currently, four OPs have pooled their resources earmarked for FIs in the FoF for approximately EUR 606m. These FIs are expected to mobilise additional capital from the private sector and to facilitate investments in the Bulgarian economy in excess of EUR 1.3 bn.

In this context, the FMFIB requested technical assistance from the European Investment Advisory Hub (EIAH) for the design of an urban investment platform which will seek to combine these ESIF resources with investment from the European Fund for Strategic Investments (EFSI).

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Investment Platform

Following a request from the FMFIB, EIB experts have engaged with the Fund of Funds and other stakeholders to understand the investment needs of the programme and the potential to structure an EFSI/ESIF combination. Working with FMFIB, the EIB experts have developed a model for an investment platform and provided support in relation to the financial intermediary market testing and selection process.

Under the combination proposal, one urban based Investment Platforms is being developed to address investment in municipal buildings, infrastructure and urban regeneration projects.

A second Investment Platform focussing on air and waste investment is also under consideration. The advisory assignment has to date focussed on the design of the urban Investment Platform and included support in relation to soft market testing with potential other investors and financial intermediaries.

EIB Support through EIAH

Following a request made through the EIAH, EIB experts have supported FMFIB for the last three months and it is envisaged that the assignment will run for a further six months. The specific tasks being undertaken include:

  • The design of an Investment Platform combining ESIF and EFSI resources under the OP Regions in Growth and potentially at a later date under the OP Environment, as well as participating in the soft market testing phase of these instruments with potential financial intermediaries.
     
  • The provision of support in relation to the selection process of financial intermediaries, who will be in charge of managing the investment platform. This will include assisting FMFIB in financial intermediaries selection and due diligence process, with the aim of  enabling FMFIB to establish an investment platform for urban development in 2018.