In Bulgaria, the JEREMIE Holding Fund (JHF) is financed by the European Regional Development Fund (ERDF) and co-financed by 15% by the State Budget within the framework of the Operational Programme (OP) “Development of the Competitiveness of the Bulgarian Economy 2007 – 2013”. Under this OP, the Ministry of Economy, Energy and Tourism (MEET), has allocated contributions under the Priority Axis 3, including a national contribution, equal to EUR 349 million for the implementation of the JEREMIE Initiative aiming to improve the access to finance for Small and Medium-sized Enterprises (SMEs) through various financial engineering instruments.
On April 29, 2010, the Government of the Republic of Bulgaria, through the MEET, and the European Investment Fund (EIF) signed the Amended and Restated Funding and Framework Agreements (Amended Agreements) structuring the implementation of the JEREMIE Initiative in Bulgaria.
Part of the Amended Agreements is the investment strategy of the JEREMIE Initiative in Bulgaria. It envisages a balanced mix of equity and debt instruments to address the existing major gaps between supply and demand of financial engineering instruments. On the equity side, the initiative has developed a rich portfolio of instruments addressing all the stages of the life cycle of an enterprise – the Entrepreneurship Acceleration and Seed Financing Instrument for the enterprises in their pre-seed and seed stages, the Risk Capital Fund for the enterprises in their early expansion stages, as well as Co-Investment and Mezzanine Funds targeted at more mature, established companies seeking growth and expansion opportunities.
On the debt side, the initiative supports SMEs through a First Loss Portfolio Guarantee instrument aimed at decreasing the collateral levels and interest rates of loans to SMEs and a Portfolio Risk Sharing Instrument aimed at substantially decreasing the interest rate paid by Bulgarian SMEs. Due to the leveraged structure of the Financial Instruments, in addition to the public funds under JEREMIE (EUR 349 million), it is estimated that an aggregate of EUR 853 million will be directed towards supporting Bulgarian SMEs in the form of equity investments and loans, thus providing Bulgarian SMEs with EUR 2.45 for each EUR 1 of public funding available.
The table below summaries the allocations per instrument within the portfolio of JEREMIE Bulgaria as at 31 December 2014.