EBRD INCREASES FINANCING FOR BULGARIA
Olivie Descamps, Business Group Director, Southern and Eastern Europe and the Caucasus, EBRD, to the BANKER weeklyMr. Descamps, how do you assess the economic situation in Bulgaria?- I think the economic situation in your country is improving on the background of the recent developments in the region and I hope the new Government will make efforts to preserve and improve what has alerady been achieved. There is more to be done for reducing unemployment, increasing export, and attracting investments, as well as for finalization of privatization and restructuring of the economy.You said the European Bank for Reconstruction and Development (EBRD) invested more than EUR3.6BN in all the seven countries of the region, and intends to invest another EUR800 by the year-end. How do you assess EBRD's activities in Bulgaria?- The EBRD has a considerable portfolio for Bulgaria as compared to the county's size - about 40 projects worth some EUR0.5BN in culumative financing. We are watching closely all our projects. Most of them are developing very well, and the truth is that there were significant improvements in some of them recently. The increasing number of new business undertakings is an important indicator about that. Several big transactions under our project programme should be effecetd as well. I could not tell you exactly when and how they will be made. We look positively on the development of our activities here. We have been offered many new proposals, which the EBRD will consider in detail.What are your plans for financing next year?- The funds will be more than in 2001 and that's for sure. We may even try to set a record for Bulgaria. The EBRD invested EUR107MN last year, so we are considering a realistically high level. Our grounds for that are the several tranches in the sphere of power engineering that we'll probably make, and this will increase investments as well. Unlike the International Monetary Fund (IMF) the World Bank, and the International Financial Corporation, we do not plan the exact amount of funds to be extended throughout the year, because our joint activities with the State are limited, but we could plan our future relations with the private sector, where decisions are made for smaller periods. Nevertheless, we have a programme for projects worth between EUR400-500MN, which should not be necessarily implemented within a year. The EBRD will be one of the biggest investors in the country with a serious commitment to continue assisting the Bulgarian economy and society.Which sector of the Bulgarian economy is of primary importance to the EBRD?- The energy sector is of an exceptionally great significance to your country and we plan to be very active in this sphere. The EBRD also pays much attention to banking, small business, and industry.What are your plans for investments in teh banking sector?- It depends on the development of the privatisation of Biochim commercial bank and DSK Bank. Most of our business in this sphere, however, will be directed to the already existing joint projects with banks, because they will need more credit lines. So, EBRD's increased financing to the banking sector will be rather connected with our long-time clients.When will EBRD's Board of Governors consider the investment strategy for next year?- On October 18 in London EBRD's managerial team will recommend the resume of the strategy. We'll discuss it in detail with the new Government, as we want to have its full consent for what the EBRD intends to do. The entire text of EBRD's strategy for Bulgaria will be placed for approval by its Board of Governors in the beginning of November.Do we have grounds to speak about worsening of the economic outlook for Bulgaria on the background of the international economic situation and the decline in general?- First of all I would like to specify that business is presently not governed by the general rules. The world has changed. After the terrorist attacks in the USA people will need time to make decisions and assess the risk in the long run. There should not be overacting and no panic. Business persons have a long-term strategic way of thinking. Yet, I think there will be a little pause, but things will go back to a more normal frame. So, let us keep calm and not panic, and things will naturally go back to their normal shape.