Bulgarian Govt Oks Launch of EU's JEREMIE Initiative

Bulgaria in EU | April 21, 2010, Wednesday // 18:54|  views

Small and medium-sized Bulgarian businesses will benefit from the EUR 199 M provided by the newly approved by the Bulgarian government JEREMIE initiative. Photo by BGNES.

The Bulgarian Council of Ministers approved the amendment to the agreement between Bulgaria and the European Investment Fund to allow the launch of the JEREMIE initiative.

The initiative provides risk capital for small businesses and enables economic growth and competitiveness.

The new agreement between the state and the EIF, which was approved by Bulgaria's Council of Ministers on Wednesday, will have to be ratified by the Bulgarian parliament.

Once the agreement is endorsed, a holding fund that will dispose of EUR 199 M will be set up. The fund will control all finances on behalf of the Bulgarian government.

The JEREMIE initiative is funded by the EU Operational Program “Sustainable Development and Competitiveness” and provides financial development resources for the small and medium-sized enterprises.

According to the new agreement, three separate funds for shared investment will be set up – venture capital for newly established small companies, growth equity for small developing companies and mezzanine – a financial instrument that provides lending to growing businesses while maintaining their ability to borrow.

The venture capital fund will be alloted EUR 30 M, with the JEREMIE initiative providing EUR 21 M of those.

The growth capital and mezzanine funds will have a capital of EUR 60 M, half of the sum will come from JEREMIE.

Up to EUR 1,5 M per year from the venture capital fund can be invested in one single company. There are no such restrictions for the other two funds.

The remaining EUR 120 M that the JEREMIE initiative will provide will be used as guarantee funds and business credit funds.

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Tags: JEREMIE, Council of Ministers, European Investment Fund, small and medium-sized entities


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