"Despite the great pressure of distrust regarding whether Bulgaria has the capacity to emancipate itself from external consultants in respect of the financial instruments management, in the new programming period we will have available the professional expertise of the Managing Board and the Supervisory Board of the new company "Fund Manager of Financial Instruments in Bulgaria" EAD", Minister of Finance Vladislav Goranov stated at the press conference for presenting the company's management. The event was attended also by Tomislav Donchev, Deputy Prime Minister responsible for the European Funds and the economic policy, the whole management of the "Fund Manager of Financial Instruments in Bulgaria" EAD, representatives of the social partners - the nationally represented employers' organisations and the Association of Banks in Bulgaria. 

Deputy Prime Minister Tomislav Donchev explained in his statement that even years ago the European Commission had given an instruction to use the financial instruments and specified that it was a different kind of financing which was not a grant, but resembled credit financing in so far as the money received had to be repaid. "The difference between the credit that you could receive from a traditional bank is that when you use a financial engineering instrument both the accessibility and the interest rate are much more favourable", Donchev added. The challenge in the new programming period is the management of a much larger sum for financial engineering, being almost 10% of all the money. Besides Bulgaria has to learn to manage by itself part of this money, because until now this has been done with the help of partners, mainly the EIF. The Deputy Prime Minister added that we had to learn to distinguish all needs of the economic sectors and the specific needs of the businesses, as well as the serious responsibility to teach everybody that would apply that kind of financing to be familiar with it and to use it. The share of financial instruments in Bulgaria will be increasing because all experts believe that the future of EU financing, especially after 2020, is financial engineering. The new company is displaying the self-confidence of our country, which similar to Finland, Portugal, Poland, Germany and other European countries has chosen to manage itself the EU funds through the financial instruments mechanisms, Tomislav Donchev emphasised. 

Minister Goranov made a short presentation in retrospect about how the financial instruments (FI) were managed in the previous programming period and what had been done so far - three months after the decision of the Council of Ministers to establish the "Fund Manager of Financial Instruments in Bulgaria" EAD. The Finance Minister commented that "the transition from grant financing to FI financing requires very extensive preparation by us, both by the public authorities and by the beneficiaries". In his statement he notes as a weakness in the previous programming period the lack of connection between the actual needs of the Bulgarian market and what has been offered and is being offered as financial instruments by the currently existing initiatives. 

"EUR 777 million is foreseen in the form of FI for initiatives in the Operational Programmes for the new programming period. The Operational Programmes are OPRD, OPIC, OPE and OPHRD. From this amount, after negotiations with the European Commission, a decision has been taken to allocate additionally EUR 102 million for the Medium and Small Size Enterprises Initiative", the Finance Minister added. 

Among the advantages in choosing the Fund of Funds mechanism for management of financial instruments under the different Operational Programmes that are targeted at the same category of beneficiaries, Minister Goranov points out that it would be possible to unite them; sustainability of the management will be created. According to him the most important thing, in the context of what is pending, is that the building of the expertise required at national level will begin. "This expertise will be necessary not only for setting up the Fund because of the trend imposed by Brussels to use more FI, but also because of the restrictions dictated by the fiscal framework", Goranov stated. He emphasized that "from now on, very often, when commenting on the implementation of investment projects, we will be talking about financial engineering". The other advantage is that when selecting a single Fund for all operational programmes, the procedures related to the implementation of financial instruments, such as development of an investment strategy, legal procedures, auditing, reporting and internal control, will be elaborated only once for the single Fund of Funds. Here you can find information about what has been done thus far for the incorporation of the Company. 

Minister Goranov presented the Company's Managing Board which consists of three members - Valery Beltchev, Ivan Dakov and Martin Danovsky. "We are convinced that these are the people who have long professional experience in the financial industry, including the design and implementation of financial products, and I personally believe in their expertise", the Finance Minister said. The next key steps to be taken by the Company management are related to its structuring, staff selection and forming of a team, assessment of the structures set up. Mr. Goranov expects for the contracts with the managing authorities of the four operational programmes and the first schemes to be signed and to be announced at the beginning of January 2016. Likewise, the agreements with the three banks, the International Bank for Reconstruction and Development (IBRD), the European Investment Bank (EIB) and the European Bank for Reconstruction and Development (EBRD), will be prolonged so that technical assistance is rendered throughout the entire programming period 2014 - 2020.

Mr. Valery Beltchev, who is the chair of the Managing Board, said that he took this mission in a responsible manner and he expected that the Company would start operating by meeting the highest standards. He added that the managing team would try to attract the best experts in the country to the Company. 

The social partners who attended the meeting vowed their support for the setting up of the new Company and emphasised that they would expect better implications for the businesses from the new management of financial instruments with the country's own forces. They announced that they would want the nationally presented organisations of the employers and the trade unions to be included in the Company's work. In response, Minister Goranov committed himself to setting up an Advisory Board to the Managing Board or to the Supervisory Board with the participation of the social partners where to share ideas that would satisfy the needs of the businesses. 

During the subsequent briefing, it was explained that there were controls, certified procedures and rules set up within the regulations and rules used to manage the EU funds thus far and they would be applied with regard to the Company. The fact that the Supervisory Board includes the heads of the managing authorities is a sufficient guarantee of the link between the objectives of the operational programmes and the Fund's activity and of the fact that those financial instruments would be managed in the maximum transparent manner. The set-up itself and the type of management, i.e. the two-tier system, together with the mechanism whereunder the Fund will be functioning, do not allow and do not presuppose any political interference, the Finance Minister specified. 

We do not face the issue with the Fund's credit rating as it is not a financial institution and will not perform financial operations. The management resources that will be provided to it will be "circulated" through the financial system that operates in Bulgaria on the basis of any contracts between the Fund manager and the financial institutions. The fact that the management and the design of the instruments will take place in Bulgaria will allow us to meet the needs of the local market as quickly and accurately as possible. The financial institutions which will provide support are not advised beforehand, they will be selected through competition procedures.

It has become clear that the decision for setting up the Fund is national and is not subject to Commission approval. 

It was specified that the amount allocated for financial instruments in the previous programming period was twice smaller than the one allocated at present, i.e. around EUR 380 million.