Банкеръ Weekly

Briefs

LAST CHANCE FOR ABSORPTION OF FUNDS UNDER SAPARD

Projects under the EU's special pre-accession programme SAPARD can be filed as of July 3, the Ministry of Agriculture and Forestry announced. Business proposals for the development of dairy industry, of wineries, and of enterprises for processing of meat, milk, fruits and vegetable, will be expected this time. Projects in the field of country tourism, wood-processing, biofuels, sericulture, bee-keeping, horse-breeding, fishery and aquacultures, mushroom-growing, processing of ether oils, medical herbs and mushrooms, will be accepted as well. July 25 is the deadline for filing business offers and this is the last big round for choosing projects under EU's pre-accession programme. At the same time it is extremely important to achieve full synchrony between the Finance Ministry and the Agriculture State Fund in order to get in due time the money from the State subsidy. We'll recall that the size of the financial aid is up to 50% of the approved investment expenses, 75% of which is ensured by the EU and 25% by Bulgaria's State budget. The difference between the full size of the approved investment costs and the amount of the subsidy is provided by the candidate who may participate only by money. Tangible assets are not acknowledged as expenses. The candidate proves possession of the necessary amount by presenting a bank statement or a letter of intent for allocation of a credit from a bank or another financial institution. A declaration from the farmer or the manufacturer that the money for the investment has been ensured is acknowledged as well.
The Agriculture Ministry's website has published recently the full list of approved projects under SAPARD, including the business proposals for subsidizing producers in the dairy sector, submitted in the beginning of the year. If there is again lack of synchrony between the Finance Ministry and the Agriculture State Fund, as was the case with the blocked projects for the purchase of agricultural equipment, there is a real danger of not absorbing the funds, branch organisations from the sector warned. They insist on amendments to Ordinance No 16 on the terms and order for granting free financial aid for improving the processing and marketing of agricultural and fish products under the SAPARD programme. The document stipulates that only second group enterprises might apply for financing. That means they have been closed down or are about to be closed for non-observation of the requirements of the system for analysis of risks and control of foods' safety. Thus, some of the enterprises within the meat and dairy sector won't get money for restructuring. Under such procedures manufacturers would hardly get bank credits either to finance their projects. The paradox is that the enterprises from the first group, i.e. those which have received sanitary authorities' approval and will continue operating. are not entitled to apply for money under SAPARD.
More than 30% of all agreed funds, amounting to BGN1.1BN, is to be absorbed by the year-end. We hope that the administration is working on the amendments to ordinance No 16 in order to absorb quickly the funds under SAPARD. Thus, our meat-processing and dairy enterprises will enter the EU sufficiently prepared for the competitive single market, Dimiter Manov, manager of the Sibola consultancy agency said to the BANKER weekly. He added that if farmers are again given the opportunity to apply for financing by projects for the purchase of agricultural equipment, the delay in the absorption of money under SAPARD (which ends in end 2006) will be made up.

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