The total amount of support under the CIEP 2021-2027 for financial instruments and grants in one single operation is EUR 633 577 752, of which EUR 520 440 678 is provided by the European Union through the European Regional Development Fund (ERDF).
The financial resources will be used to structure financial instruments under Priority 1, Priority 2, Priority 5 and Priority 6 of the CIEP 2021-2027, through which financial products will be provided for equity and quasi-equity investments, loans, and guarantees, including in combination with grants in one single operation for some financial instruments.
The financing aims to enhance the innovation capacity of enterprises, introduce innovations, including the commercialization of internal R&D, develop and implement technologies in the area of Industry 4.0, achieve the digital transformation of Bulgarian enterprises, and accelerate the adoption of digital technologies to increase competitiveness, promote sustainable growth, and competitiveness of SMEs, improve energy efficiency and among others promote the transition to a circular and resource-efficient economy, to stimulate and provide support to enterprises operating primarily in strategic sectors with high added value, developing and applying technological solutions in the field of defense and dual use, including investments in innovative projects, etc.
The Holding Fund plans the implementation of the following financial instruments under CIEP 2021-2027:
EQUITY FINANCIAL INSTRUMENTS:
INNOVATION IN ENTERPRISES FUND
The purpose of this financial instrument is to encourage the creation and implementation of innovations through equity and quasi-equity investments, focusing on companies in the early stages of their development.
Financial resources: EUR 32.17 million, of which EUR 24.7 million is provided by ERDF.
Individual investment ticket: The maximum amount of public resources is EUR 1 million per final recipient.
Eligible final recipients: Micro, small, and medium enterprises (SMEs); small mid-cap companies and mid-cap companies.
Sectors of investment - all within the scope of the Innovation Strategy for Smart Specialization (ISSS) 2021-2027.
FUND FOR DIGITALIZATION
A financial instrument for equity and quasi-equity investments, including risk quasi-equity financing, in support of enterprises at different development stages aimed at the development and implementation of Industry 4.0 technologies. The instrument will be implemented in combination with support from financial instruments and grants in one single operation (e.g., a combination with a grant for digitalization audit, other investment preparation technical services, and/or investment grant).
Budget of the instrument: EUR 40.25 million with possible combination of EUR 5 million in grants in one single operation.
Individual investment ticket: Public funds up to EUR 200 000 for grants and up to EUR 5 million for equity/quasi-equity financing per final recipient.
Eligible final recipients: SMEs, small mid-cap companies, and mid-cap companies.
Sectors of investment - for projects at development stages 3, 4, 5, and 6 under Industry 4.0.
ENTREPRENEURSHIP FUNDS FROM CONCEPT TO GROWTH
The financial instruments from „Entrepreneurship” funds are planned to provide equity and quasi-equity investments through three funds covering different stages of businesses such as an early-stage fund, a venture capital fund, and a growth fund, with a focus on rapidly growing enterprises.
Budget of the instrument:
Early Stage Fund with public resources of EUR 30 million;
Venture Capital Fund with public resources of EUR 34.5 million;
Growth Fund with public resources of EUR 40 million.
Investment size: Depending on the investment phase of the respective fund. Individual investment ticket up to EUR 3 million public resources.
Eligible final recipients - SMEs; small mid-cap companies and mid-cap companies.
Sectors of investment – Sector agnostic, but focus on the sectors planned in the National Strategy for Small and Medium Enterprises.
FUND FOR STATEGIC TECHNOLOGIES AND DEFENSE
The purpose of this fund is to provide support through equity and quasi-equity investments to companies developing technologies within the scope of STEP.
Budget of the instrument: EUR 30 million with possible combination of EUR 5 million in grants in one single operation.
Investment size: Public funds up to EUR 200 000 for grants and up to EUR 5 million for equity/quasi-equity financing per final recipient.
Eligible final recipients: SMEs; small mid-cap companies; mid-cap companies; large enterprises.
Sectors of investment: No sectoral restrictions on the development of technologies within the scope of STEP and/or dual-use technologies, and supporting industrial capacity in the field of defense as well as the production of critical technologies and manufacturing with possible dual use.
DEBT FINANCIAL INSTRUMENTS:
DEBT FINANCIAL INSTRUMENT FOR DIGITALIZATION
A guarantee financial instrument is planned to provide support for existing enterprises from all sectors for the implementation of projects in the field of Industry 4.0. Financing is expected to be provided in the form of debt financing through the provision of guarantees.
Budget of the instrument: For financial instruments: EUR 47.81 million.
It is planned that the financial instrument will be implemented in combination with grants in a separate operation, which will be managed by the Managing Authority of CIEP with a budget of EUR 52 million.
Type of financing: Investment and working capital loans. Financial leasing.
Eligible final recipients: SMEs; small mid-cap companies and mid-cap companies.
Sectors of investment - for projects at development stages 3, 4, 5, and 6 as per the classification under Industry 4.0.
FINANCIAL INSTRUMENT FOR INTEGRATED TERRITORIAL INVESTMENTS (ITI)
The planned financial instrument will finance projects related to the development of viable investments in enterprises, in industrial parks or in functional proximity to them, in accordance with the Strategy for Territorial Development on NUTS II level. Financing is expected to be provided to final recipients in the form of loan financing combined with embedded portfolio guarantees.
Budget of the instrument: EUR 36 million.
Maximum amount: up to EUR 5 million public resources.
Type of financing: Investment and working capital loans. Financial leasing.
Eligible final recipients: SMEs; small mid-cap companies and mid-cap companies.
DEBT FINANCIAL INSTRUMENT FOR INVESTMENTS IN CIRCULAR ECONOMY
A financial instrument for loans and guarantees is planned to stimulate lending to SMEs and large enterprises to address the encountered difficulties in financing energy efficient- related projects as well as to support enterprises in implementing circular economy-related projects related to the introduction of circular production and consumption models.
Budget of the instrument:
Type of financing: Investment and working capital loans. Financial leasing.
Eligible final recipients: SMEs; small mid-cap companies; mid-cap companies; large enterprises.
DEBT FINANCIAL INSTRUMENT FOR STRATEGIC INVESTMENTS
The financial instrument aims to support final recipients in achieving specific objectives in the following areas:
Support for investments contributing to the objectives of the Strategic Technologies Platform for Europe (STEP)“.
Improving industrial capacity to promote defense capabilities, with priority given to dual-use capacity."
The financial instrument aims to attract private capital to public resources, thereby multiplying them and improving access to financing for final recipients to implement investments that contribute to achieving objectives in the above areas.
Budget of the instrument: EUR 40.2 million;
Type of financing: Investment and working capital loans. Financial leasing.
Eligible final recipients: SMEs; small mid-cap companies; mid-cap companies; large enterprises.
The support under the equity and debt financial instruments will contribute to achieving the goals under the CIEP 2021-2027, with respect to the following:
PRIORITY 1 „INNOVATION AND GROWTH”
Specific objective (i) development and strengthening of research and innovation capacity and the introduction of modern technologies.
Specific objective (ii) harnessing the benefits of digitalization for citizens, enterprises, research organizations, and public authorities;
Specific objective (iii) promoting sustainable growth and SMEs’ competitiveness, jobs creation, including through investments in material production sectors.
PRIORITY 2 „CIRCULAR ECONOMY”
Specific objective (i) promoting energy efficiency and reducing greenhouse gas emissions;
Specific objective (vi) promoting the transition to a circular and resource-efficient economy.
PRIORITY 5 "SUPPORT FOR STEP TECHNOLOGIES"
Specific objective "Support for investments contributing to the objectives of the Strategic Technologies for Europe Platform (STEP)"
PRIORITY 6 "STRENGTHENING INDUSTRIAL CAPACITY IN THE FIELD OF DEFENSE CAPABILITIES"
Specific objective "Improving industrial capacity to promote defense capabilities, giving priority to dual-use production."
It is expected that the financial instruments will attract additional private funding of at least EUR 208 275 124, contributing to the achievement of the indicator under CIEP 2021-2027 for private investments complementing the public support. In addition, investments through financial instruments will contribute to achieving other indicators under CIEP such as:
Bulgarian enterprises that will receive support from the financial instruments under CIEP 2021-2027- at least 1 134 companies
Number of employees in SMEs trained in Industry 4.0 skills – at least 1 795;
Achieved energy savings – at least 386 887 MWh/year;
Reduction of greenhouse gas emissions – at least 276 082 tons of CO2 equivalent/year.
