September 28 (SeeNews) - Bulgaria is putting in place an investment instrument which will see its development bank BDB collaborate with the local stock exchange and private investors to accelerate financing for small and medium enterprises (SMEs), the innovation ministry said.
The move will enable state-owned Bulgarian Development Bank (BDB) to channel part of the its credit lines and investment portfolio to the public markets, while prioritising green and socially-oriented projects, the innovation ministry said in a press release on Tuesday.
SMEs will benefit from new avenues of financing through potential investors subscribing for bonds, in particular green bonds, and for equity instruments.
Companies have already expressed interest in as much as 300 million levs ($146.9 million/153.4 million euro) of overall financing over the next 12 months to be made available via the Bulgarian Enterprise Accelerator Market (BEAM), a segment of the Bulgarian Stock Exchange (BSE) dedicated to SME growth, BSE chief executive Manyu Moravenov said in the press release.
The planned investment mechanism will, firstly, expand the product portfolio of BDB through co-financing along large financial organisations. The BDB will have a complementary financial capacity and risk will be managed according to best practices of development banks in Europe.
Secondly, the participation of the BSE and public markets will ensure that investment processes will gain in transparency, while capital markets receive a boost by the introduction of a serious institutional player such as the BDB. The limit for loans made by the development bank will remain 5 million levs, with SMEs still a priority segment for the lender.
The BDB, BSE and the innovation ministry will set up a working group to establish the structure of the new investment process in compliance with existing regulations.
(1 euro = 1.95583 levs)