Environment Programme

FMFIB is implementing a financial instruments` operation through a holding fund under the EU co-financed Environment Programme (EP) 2021-2027.

The total amount of support for financial instruments from EP 2021-2027 amounts to EUR 35 000 000, of which EUR 17 000 000 is provided by the European Union through the Cohesion Fund and EUR 12 457 500 by the European Regional Development Fund and EUR 5 542 500 – national co-financing.

The financial resources will be used to structure financial instruments under Priority 1 "Water" and Priority 2 "Waste" of the Programme through which debt financial products will be provided for loans.

The indicative allocation of the resource among the financial products is:

Priority 1 “Water”: EUR 19.07 mln. for loans

Priority 2 "Waste": EUR 14.4 mln. for loans.

The aim of the financial instruments under Priority 1 is to provide financing for own participation in projects approved for financing with grants in the case of combined financing within two separate operations; to provide financing for stand-alone loans (i.e. without combined financing with grants) for the implementation of investments and/or working capital that contribute to the achievement of the objectives under Programme`s  Priority 1 “Water”; to address the financing gap and improve the terms of financing offered in the water sector; to stimulate the number and volume of large scale investment exposures with significant infrastructure importance in the sector.

Support is targeted at investments in infrastructure for wastewater collection, disposal and treatment, protection of water resources, safeguarding water supply, reducing water losses in the water network and improving drinking water quality.

Targeted final recipients are  those eligible under grants procedures as per the EP 2021-2027, with a focus on recipients operating in agglomerations with more than 10,000 inhabitants in the territory of the regions defined under the Administrative and Territorial Structure Act of the Republic of Bulgaria. These regions coincide with the delimited territories of consolidated water supply operators under the Act on Waters, with a completed  regional pre-investment studies RPIS, which defines the list of projects to be implemented for the region, including others that may be identified as eligible final recipients under the programme through an amendment to the EP 2021-2027.

Loans - investment, working capital, or loans for other eligible activities under the Programme - will be provided for a term of up to 240 months, with a grace period for principal repayment of up to 3 years and the possibility of extension in accordance with the financial intermediary's policy. The portion of the loan financed under the EP may be interest-free or with more favourable interest terms and with reduced collateral, which will reflect in relaxed terms for the final recipient (FR).

Estimated amount of loans to the FR, including the expected contribution of the financial intermediary - EUR 25.6 million.

Expected leverage effect - 1.4.

The support under Priority 2 aims at providing financing under relaxed terms to the targeted final recipients  promoting the transition to a circular economy; addressing the financing gap and improved financing conditions to final recipients from the Waste sector; reducing the amount of municipal waste landfilled and increasing the share of separately collected and recycled waste; completing the systems for separate collection and recycling of biodegradable waste; increasing recycling capacity.

Support is envisaged within the scope of the Waste Management Act (targeting household, industrial and construction waste). Investment measures for household waste management focus mainly on Regional Waste Management Associations with needs to complete/upgrade their systems for separate collection and recycling of biodegradable waste and preparation for reuse. Recycling measures carried out by recyclers apply to household, production and construction waste and  should lead to  increased recycling capacity.

The targeted final recipients are municipalities (their municipal corporations) and recyclers, and the EP 2021-2027 only supports enterprises carrying out activities under code 38.32 "Recycling of sorted waste" as per Classification of economic waste activities under the Waste Management Act (excluding hazardous waste).

Eligible loans are covering investment and working capital purposes, including leasing, with a maturity of up to 240 months, a grace period for repayment of principal of up to 3 years and the possibility of extension in accordance with the policy of the financial intermediary. The portion of the loan financed under the EP 2021-2027 may be interest-free or on relaxed interest terms and with reduced collateral.

Expected leverage effect - 1.43.

With the resources earmarked for the FI, it is foreseen to implement projects and investments contributing to the achievement of the objectives of the EP 2021-2027, including covering the following programme indicators: