The amount of the loan is BGN 40 million

The Fund for Local Authorities and Governments - FLAG EAD signed a new three-year agreement with UniCredit Bulbank for providing a loan for financing of projects under EU programmes implemented by Bulgarian municipalities. The loan amounts to BGN 40 million and the term of the agreement is until November 2017. UniCredit Bulbank was chosen to be the managing bank of the fund after an open procedure pursuant to the Public Procurement Act.

"The Bank actively supports the activity of FLAG Fund, the main motivation being facilitation and speeding up of the opportunity for municipalities to utilize the grants allocated to them under the Operational Programmes and the Rural Development Programmes of the EU. It is very important for us to contribute in support of investments for projects which have positive influence on local level as well as on the whole country", Levon Hampartzoumian, Chief Executive Officer and Chairman of the Management Board of UniCredit Bulbank, said.

In September this year the government increased the equity of FLAG Fund by BGN 30 million, which enabled the attracting of more capital of approximately BGN 70 million from commercial banks. These funds are necessary so that the needs for financing of projects in the last year of the programme period are met.

"For the period of its activity, the fund has established itself as a financial instrument, popular among and preferred by the municipalities, for successful implementation of the agreements under the Operational Programmes. This is due to the short terms for processing of applications, the flexibility of the credit products in accordance with the specificity of the financed projects, the assistance to the municipalities in preparing applications for financing and structuring of the cash flows. By the end of the current programme period, in 2015, it is expected that approximately 200 more projects will be financed. We rely on the role of FLAG for the new programme period too, as well as on its development as a fund operating with the EU financial instruments" Dobromir Simidchiev, Chairman of the Fund's Board of Directors, said.

By September this year, FLAG Fund provided 730 loans amounting to BGN 750 million. Projects of 195 Bulgarian municipalities, amounting to BGN 2,450 million, have been realized with the provided loans.

The equity of the fund amounts to BGN 248 million, of which BGN 94 million are owned by shareholders and BGN 154 million are attracted funds, respectively BGN 114 million come from syndicated loans provided by the European Bank for Reconstruction and Development, with the participation of HYPO NOE GRUPPE BANK AG AUSTRIA and UNICREDIT BANK AUSTRIA AG, and BGN 40 million come from the current loan provided by UniCredit Bulbank.

UniCredit Bulbank has established a relationship with FLAG Fund since 2008, when it got, for the first time, the opportunity to be the managing bank of the fund. The bank supports the activity of the fund in evaluating the financial condition of the municipalities, in evaluating the risks related to their financing, in administering their loans and in other activities related to the good banking practices.

More information for media:

UniCredit Bulbank, Identity & Communications Department

Ekaterina Ancheva, Phone: + 359 2 9264 963, flbufsjob/bodifwbAvojdsfejuhspvq/ch

Magdalena Ivanova, Phone: + 359 2 9232 528, nbhebmfob/jwbopwbAvojdsfejuhspvq/ch