Банкеръ Weekly

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MUNICIPALITIES TO DRAW INTEREST-FREE CREDITS

Bulgarian municipalities with approved projects under the SAPARD programme and closed contracts with the Agriculture State Fund may count on interest-free loans, the Council of Ministers decided by a decree dated March 10. As it is known, one of the measures under the EU's SAPARD programme allows separate municipalities to apply for funds. The necessity for additional financing came as a result of the huge expenses of local authorities for implementing their projects. In the future, municipalities (only those with approved projects and closed agreements with the Agriculture Fund) will be getting their tranches under the extended loans into a special account with the Bulgarian National Bank. The interest-free credit may not exceed the amount of approved investment expenses, specified in the contract between the municipality and the Agriculture Fund. The first loans under the Government-approved decree will be released in the beginning of April. At its meeting on March 10 the Cabinet approved also the 2005 budget of the Agriculture Fund. Under the document, the republican budget will remit to the fund BGN160MN and its own proceeds amount to BGN10.5MN. The Agriculture Fund will spend a total of BGN83,863,000 this year, BGN56.5MN of which has been earmarked for subsidizing producers. Net expenses of BGN180MN have been planned for long-term crediting under investment programmes of the Agriculture State Fund and for refinancing projects under the SAPARD programme thorough commercial banks. The fund will allocate BGN12.5MN for the purchase of fertlizers for the spring campaign.

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