Banks in Bulgaria want to finance more and more green projects

Banks in Bulgaria want to finance more and more green projects

Banks in Bulgaria are becoming more and more green and are increasingly oriented towards seeking and supporting green, innovative projects that are struggling for funding. This was made clear by representatives in the banking industry at the Green Transition forum within Green Week 2023. It is organized by Dir.bg with the media partnership of Economic.bg.

The energy crisis has inevitably become an accelerator for investment in the green transition, and this is the good news from months of uncertainty in Europe. Even with this help, however, green investment is still not enough.

However much we have achieved in the past year, it is not enough. The hard truth is that if we want carbon neutrality by 2050, we need to invest in new technologies and innovations. The innovations that exist today do not allow us to achieve this. Only half are available – the rest are in the initial phase, tests and others,” commented Liliana Pavlova, vice president of the European Investment Bank (EIB).

According to her, it is for this reason that innovation should be the highest priority of both the public and private sectors. According to her, the big problem in Europe is that there is not enough quick capital for the development of innovations and they go to America, “and we have to keep them in Europe”.

Pavlova also briefly talked about an EIB study, according to which companies in Bulgaria are lagging behind countries like Romania and Croatia in terms of awareness of the need for investment in decarbonisation.

And in the words of the President of the Bulgarian Industrial Association Dobri Mitrev, the strategy for a circular economy comes from the developed countries and “if we are still talking about when and if our economy should be circular, then we are not there yet”.

And banks want to help businesses become greener.

The Bulgarian Development Bank (BDB) should be the green bank in Bulgaria. Our goal is difficult, but simple – to make sure that the financing tools of the big financial organizations reach the small and medium businesses in Bulgaria – both the small business in Montana and the entrepreneur in Varna”, said the director of the state-owned bank, Tanko Arabadzhiev.

He pointed out that Bulgaria still has an insufficient number of green projects because the business does not know how to prepare them. There is also a lack of sufficient funding when it comes to slightly riskier investments and longer-term projects.

“Participants select the projects with the highest return and the lowest risk and so the question remains who will finance the slightly more risky and long-term investments and I believe that here is the role of the BDB so that sustainable projects are financed and Bulgarian business goes forward,” Arabadzhiev said.

He also disclosed a new loan agreement between the BDB and the EIB worth BGN 350 million to be used for financing small and medium businesses.

Tsvetelina Mincheva, Director of UniCredit Bulbank, also shared her experience and said that companies should take the green transition “personally” because climate change is already visible around the world. Following this example, the bank has started to integrate more green products into its core business and has provided ESG training to all its employees.

We cannot do business if the planet is dead”, said the new Minister of Innovation and Growth Milena Stoycheva.