EBRD | 19 April 2014
Bulgaria: €5 million loan to Elana Agrocredit to support modernisation of the sector
The EBRD is providing a €5 million to loan to Elana Agrocredit AD to co-finance the development of Bulgaria’s agricultural land market. The company is offering long-term financial lease contracts to farmers seeking to acquire land. Private ownership is expected to lead to further investments that will modernise the sector and support the sustainable use of land.
Agriculture remains an important sector of the Bulgarian economy, and its economic significance is growing. The sector plays a key role in the development of rural areas, providing a source of income as well as investments along the value chain. Bulgarian produce and processed agricultural goods enjoy international recognition.
However, only 23 per cent of arable land is currently owned by farmers. The remainder belongs to individuals, institutional investors, municipalities and the state. This structure is not conducive to the sustainable use of land and is holding back investments that would modernise the agricultural sector.
Daniel Berg, EBRD Director, Bulgaria, said: “This project addresses a key issue facing Bulgaria’s agriculture and will play an essential role in strengthening an important sector of the country’s economy. Overcoming land fragmentation and giving famers greater opportunities to own and develop their own land helps stimulate long-term investments. This can help increase and improve agricultural output.”
Kamen Kolchev, Chairman of rhe Board of Directors of Elana Agrocredit, noted: “We appreciate very much the EBRD’s support in such a key stage of local agricultural development. Now it is ready to provide loans that will help farmers fulfil their plans and this represents an important new stage in our development.”
Elana Agrocredit is a Bulgarian joint stock company that focuses on leasing agricultural land to Bulgarian farmers. It is owned by local institutional investors, individuals and Elana Group, a Bulgarian company with activities in non-bank advisory and asset management services, agricultural land investments and green energy projects. Elana Agrocredit is licensed by the Bulgarian National Bank as a credit institution.
The loan comes under the EBRD’s Local Enterprise Facility, a €400 million framework for investments in enterprises in Albania, Bosnia and Herzegovina, Bulgaria, Croatia, FYR Macedonia, Kosovo, Montenegro, Romania, Serbia and Turkey, as well as countries in the southern and eastern Mediterranean region (Egypt, Jordan, Morocco and Tunisia). It provides a wide range of flexible financial products, including equity, quasi-equity and debt financing to address the needs of companies.
Since the start of its operations in Bulgaria in 1993, the EBRD has invested €2.7 billion in 225 projects, with a total project value of €8.8 billion. Ninety-three per cent of the portfolio is in the private sector. Over the years the Bank’s investments and activities in the country have evolved significantly, in accordance with the Bulgaria’s overall economic development. EBRD