The Fund of Funds has completed two key procedures and has announced the selected financial intermediaries which will manage resources of a total amount of BGN 417 million: BGN 353.3 million for the Urban Development Fund and BGN 64.8 million for the Seed/Acceleration and Start-up Fund (SASF).
The Urban Development Fund (UDF) is an instrument funded through Operational Programme Regions in Growth 2014 – 2020, a follow-up to the JESSICA initiative from the previous programming period, now with a broader geographical scope and an amount of the funds available that is 5 times higher, i.e. BGN 353.3 million. Intermediaries undertake to secure additional private resources in excess of 40 % of the financing. Thus the amount to be made available to the final recipients for the UDF is expected to be BGN 600 million.
The intermediaries that will manage the UDF resources are:
- For the regions of Southern Bulgaria and the City of Sofia, the Fund for Sustainable Cities Consortium, which includes the UBB, the FLAG Fund, the Sustainable Urban Development Fund and the Bulgarian Consultancy Organization.
- For the region of Northern Bulgaria, the Regional Urban Development Fund, which is a company owned by Société Générale (majority stockholder), Elana Investment, Elana Holding and Balkan Advisors.
UDF financing will be offered as loans with embedded guarantees targeted at a wide range of potential final recipients: municipalities and municipal enterprises, private companies, public/private partnerships, individuals and others. The financial resources will provide support for projects that improve the urban environment, promote economic growth in the regions and contribute to increasing energy efficiency. Similar projects from the previous programming period include the renovation of the Vazrazhdane Park (Sofia), the rehabilitation of the Central Town Market (Stara Zagora), the reconstruction of the Yunashki Salon (Varna), etc.
What is new in the current programming period is that financing will now be available to 39 municipalities, versus 7 in the previous one. Also, a part of the investments is earmarked for supporting cultural heritage and tourism across the country.
Along with the UDF intermediaries, the fund managers which will manage two of the funds within the The Seed/Acceleration and Start-up Fund (SASF) amounting to BGN 64.8 million were also announced. The funds are financed under Operational Programme Innovation and Competitiveness 2014-2020 (OPIC).
- The resources of BGN 27.4 million in the fund, which will finance entrepreneurs at the earliest stage of development of their business, will be managed by the AD-Ventures consortium. The consortium members are CleanTech Bulgaria, Meta Ventures (the Italian Republic), Francesca Natali, Anna Amati, Mariyana Hamanova-Rondini and Hristo Balinov.
- The resources of BGN 37.4 million in the start-up fund for businesses which have already made some headway in their development, will be managed by the Next Tech Ventures consortium, which has the following members: Constantine Petrov, Zlatolina Moukova, Yordan Zarev, Alexander Terziyski.
The selection for a manager for the third fund to be sourced from the SASF at BGN 35.7 million, for which there is only one approved applicant that meets the requirements in the procedure, will be relaunched in the autumn. The aim is to ensure there is sufficient competition and a possibility to achieve more favourable offers in terms of the business plan and investment strategy for managing the public resources.
The SASF will support entrepreneurship and promote the development of the start-up ecosystem in Bulgaria. Through the selected fund managers, it will finance over 200 enterprises, and investments in each investee can range between EUR 25 000 and EUR 1 million. By setting up the two BASUF funds, the Fund of Funds makes available fresh financing for equity investments in start-ups which reaches the amount of the public resources already invested over the past 5 years in that area.
With the selection of financial intermediaries for the UDF and the SASF, the Fund of Funds has successfully made available for investment over 35 % of the funds it manages in the current programming period.
