Банкеръ Weekly

Briefs

SEVEN FAVOURABLE LOANS WERE SAVED IN THE LAST MOMENT

In the end of its four-year mandate the Parliament voted for one day seven important financial agreements, loans and contracts with international financial institutions. Since the beginning of 2001 MPs from opposition have been warning that the Parliament's clumsy procedures may leave favourable loans unutilised..
The ratification of a financial contract between Bulgaria and the European Investment Bank (EIB) for the Trakia Highway project, will result in launching EUR100MN for the extension of the European corridor No.8 from the village of Orizovo to Bourgas. The contract was signed on July 26, 2000, but the Parliament signed it only now. According to the agreed terms and conditions, the credit has to be repaid within 25 years, with six years grace period. Bulgarian participation will amount to EUR140MN own capital.
The Parliament gave green light to the government for negotiating EIB credit of EUR30MN for the project Bulgaria - Road Rehabilitation. The term for repayment is 20 - 25 years with five or six years grace period. It will be launched at maximum three tranches and willbe used for reconstruction of the road network. Bulgaria has made a committment to invest EUR35MN own capital. Opposition MPs requested a bigger number of local companies to participate as contractors in the project.
The project for purifying the waste waters of the Maritsa River basin will be supported by an EIB credit amounting to EUR28MN. Additional EUR32.549 will be launched by the EU ISPA funds, and Bulgarian will invest EUR3MN own capital. The contract has been signed on July 9, 1999. Repayment period is 20 years with seven years grace period.
The Cadastre and Land Property Registration Project will be supported by an approved credit contract for the amount of USD30MN, launched by the IBRD. Bulgarian investment will amount to USD7.01MN. Credit repayment term is 20 years with 5 years grace period.
The government was authorised by the Parliament to initiate negotiations for launching the second credit for supporting agriculture ASAL-2, amounting to USD50MN. It is supposed to stimulate land market through finalizing restitution and privatisation of a considerable part of the state owned agricultural units.
The Parliament approved the launching of EUR500,000 by the French Agency for Bulgarian Development. The amount will be used for preliminary research and consulting for the establishment of a second bridge ver the Danube at Vidin - Kalafat.
Children protection will be supported with a credit amounting to USD8.8MN, launched by IBRD. The contract, ratified by the Parliament has 20-year repayment period and a 5-year grace period, as well as floating interest rate calculated on LIBOR rate plus an initial payment of 1% of the credit total amount. Money will be used for establishing temporary shelters for the youngest children and development of the project for recipient families for parentless children.
Soon will start negotiations with the Bank for Development with the Council of Europe (????) for launching credit to support the project for building houses for the Roma population in Plovdiv. The credit amounts to EUR5.4MN, which is 60% of the project total value. The rest will be provided by Bulgaria. The credit will be launched for ten years with five years grace period and a favourable rate of 1 percent.
The seven credit agreements were saved in the last moment. However, it remained unclear who profited from the delay of some projects for a year or two due to untimely ratification.

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