FLAG Fund Provides Lv 1,000 Mln for 824 EU-Funds-Supported Municipal Projects

Sofia, June 4 (BTA) - FLAG Fund EAD Executive Director Nadya
Dankinova and senior executives of DSK Bank EAD and CIBANK EAD
Thursday signed agreements under which the two banks will extend
revolving loans to the Fund.

Regional Development and Public Works Minister Liliyana Pavlova,
who was present at the signing, said that the Fund provided
nearly 1,000 million leva between 2009 and 2015 in support of
824 EU-funds-financed municipal projects, worth almost 4,000
million leva. More than 60 per cent of the projects are under
Operational Programme Regional Development. "Not a single loan
has fallen overdue, and not a single lev has been lost during
those six years," Dankinova said.

Apart from DSK Bank and CIBANK, Austria's HYPO NOE Gruppe Bank
also entered the tender procedure for two lots, 20 million euro
and 40 million euro, the FLAG Fund CEO told journalists. CIBANK
will charge 1.44 per cent interest for a three-year period, and
DSK 2.25 per cent for a four-year period, she added.

Pavlova specified that the Fund's capital will this reach 320
million leva. This will enable all municipalities which must
finish their projects until the end of the year to have a steady
supply of fresh funds, so that those of them which will not
finish their projects could finance their completion next year,
the Minister explained. The Fund will also support the first
projects of the new programming period. Pavlova pointed out that
the Fund may become an institution providing long-term loan
financing to all water projects with water and sewerage
utilities as beneficiaries. Dankinova commented to journalists
that if such companies have concluded an implementation contract
with the Managing Authority of Operational Programme
Environment, they would be eligible beneficiaries. "This,
however, means that a new methodology will have to be devised,
because these are commercial corporations rather than
municipalities," she added.

Sopot Municipality has approached the Fund for financing a
financial correction under a water project, but the application
has been rejected because the municipality cannot incur such a
debt with its financial capacity and own assets, Dankinova said,
replying to a question.

Because of a 5 per cent (4.5 million leva-plus) financial
correction imposed by the Environment and Water Ministry because
of public procurement irregularities, Sopot Municipality owes a
company that built its water treatment facility 3.7 million
leva out of a total of 18 million, and hopes to obtain an
interest-free loan from the Finance Ministry, now that a private
enforcement agent is conducting a public sale of municipal
property.