Local Time: Print

Sources of Financing

Sources of Financing For U.S. Companies Exporting and Investing in Bulgaria

I. Financing Available from the Bulgarian Banking System

The Bulgarian National Bank (BNB) operates independently of the government and reports directly to Parliament. BNB regulates the banking system, but under the Currency Board Arrangement it has no discretion in setting monetary or exchange rate policy. The Bulgarian Lev is pegged to the Euro with BGN 1.955 exchanged for EUR 1.

The Bulgarian banking system has undergone a considerable transformation since its virtual collapse in 1996. There were 28 commercial banks in 2014; 22 subsidiaries and 6 branches of foreign banks in Bulgaria. These banks held total assets of BGN 85.1 billion or USD 47.3 billion in 2014. Approximately 55% of bank assets are concentrated in the top five banks: UniCredit-Bulbank, DSK Bank, First Investment Bank, Corporate Commercial Bank and United Bulgarian Bank. However, Corporate Commercial Bank, the fourth largest bank, collapsed in June 2014 and is in liquidation. Confidence in the Bulgarian banking system was hit badly when it collapsed. In 2003, Bulgaria completed the privatization of its state-owned banks with the help of the Bank Consolidation Company, attracting many foreign banks as strategic investors. It is considered to be the most successful privatization in Bulgaria. Approximately 72% of the banking system is owned by foreign banking groups.

The average capital adequacy ratio (capital base to risk-weighted credit exposures) for the banking system was about 22% in 2014, which is high relative to the Bulgarian National Bank’s requirement. BNB’s regulation No. 8 requires commercial banks to keep their capital adequacy ratio at 12%. This ratio suggests that banks could still expand their lending. Nevertheless, commercial financing has become more available for private companies and consumers in Bulgaria.

Some Bulgarian banks may have 100 or more U.S. correspondent banks, and some U.S. banks may have correspondent relations with more than one Bulgarian bank. As banking relationships can change quickly, the best source of current information on correspondent banking arrangements is the banks themselves.

Please refer to the Country Commercial Guide for more information about banks in Bulgaria.

Contact information for banks in Bulgaria may be found on the Bulgarian National Bank and Association of Commercial Banks websites:


II. Financing Exports in Bulgaria

There are a number of methods used to settle payment in Bulgaria: cash in advance, letters of credit used in conjunction with a documentary draft (time or sight), promissory notes, documentary collections or drafts, open accounts and consignment sales. As with U.S. domestic transactions, a major factor in determining the method of payment is the degree of trust in the buyer's ability and willingness to pay.

Because of the protection it offers to the American exporter and the Bulgarian importer, an irrevocable letter of credit (L/C) payable at sight is commonly used for settlement of international payments.

Another payment option is the use of documentary collections or open accounts with international credit insurance that, unlike the letter of credit, allows the importer's line of credit to remain open. At the same time, this option protects the exporter if the buyer goes bankrupt or cannot pay.

Trade finance options for Bulgarian importers are still limited. In most instances, Bulgarian companies assume the full financial burden when purchasing goods. When trying to make sales in Bulgaria, U.S. companies may have to develop creative payment schemes, which may increase the risk of the transactions. To offset that risk, it is necessary to develop a strong client relationship.

International financial remittances in the payment of imports into Bulgaria are generally allowed. The export of hard currency by commercial entities (including juridical persons and sole traders) is permitted only by bank transfer. Transfers for current international payments (imports of goods and services, transportation, interest and principal payments, insurance, training, medical treatment and other purposes defined in Bulgarian regulations) must be supported by documentation such as invoices, certificates, or transport documents.

III. Financing Available from International Financial Institutions

a. European Bank for Reconstruction and Development (EBRD)

The European Bank for Reconstruction and Development invests in Eastern and Central Europe to foster the advancement of the private sector and mobilizes significant foreign direct investment beyond its own financing. The largest shareholder of the European Bank for Reconstruction and Development is the U.S. Government. The ERBD’s programs are open to U.S. investors as long as their projects meet certain criteria. The European Bank for Reconstruction and Development provides loan and equity financing, trade promotion and advisory services to small and medium-sized businesses.

More information about EBRD is available at:


b. World Bank (WB)

The World Bank administers their programs through a combination of financial assistance and advising services. Since Bulgaria joined the World Bank in 1990, it has received approximately USD 4 billion in loans to support reforms in areas including banking, revenue administration, health, social welfare, environmental protection, general manufacturing, agribusiness and infrastructure.

The World Bank’s assistance has been aimed at fostering sustainable economic growth in the country, while addressing poverty through improvements to the social safety net and other programs. In July 2015, the World Bank was financing 2 projects in Bulgaria; Municipal Infrastructure Development and a Social Inclusion Project.

Sections of the World Bank with active roles in Bulgaria:

1. While the International Bank for Reconstruction and Development (IBRD) does not give loans for private-sector investments, its procurement procedures enable U.S. exporters to bid on public procurement contracts. To date, approved projects have occurred in the energy, telecommunications, residential heating, railways, health, environmental, and public administration sectors.

2. The International Finance Corporation (IFC) promotes growth by financing private sector investments. IFC provides both equity and debt financing, without sovereign guarantees.

3. The Multilateral Investment Guarantee Agency (MIGA) encourages foreign investments by providing private investors with investment guarantees (political risk insurance) against the risk of currency transfer, expropriation, war, civil disturbance and breach of contract by the host government.

More information about WB’s role in Bulgaria could be found at:

World Bank

c. Small Enterprise Assistance Funds (SEAF)

SEAF Bulgaria has been active on the Bulgarian financial markets since 1994. The organization is managed by the Small Enterprise Assistance Funds (SEAF) which have two venture capital funds in Bulgaria – The Trans-Balkan Bulgaria Fund (TBBF) and CARESBAC Bulgaria (not active). The funds have participation from the U.S. Agency for International Development, IFC, and EBRD.

The Trans-Balkan Bulgaria Fund was launched in 2001 and has USD 7 million of investment capital reserved for Bulgaria. It provides long-term financing (equity and quasi-equity capital) as well as business support to growth-oriented, private Small and Medium Enterprises in Bulgaria.

More information about SEAF is available at:


d. European Investment Bank (EIB)

The European Investment Bank (EIB) is the most important source of EU project financing for U.S. companies, as they can participate in most tenders involving loans made by the EIB. Some of the EIB’s priorities are the transportation, telecommunication and energy sectors.

More information about EIB is available at:

e. European Union Programs

The multi-annual budget for 2014-2020 aims to fund the objectives of the Europe 2020 strategy for smart, sustainable and inclusive growth. This strategy sets objectives in the following five areas: employment, research and development, climate change and the environment, education, and poverty and social exclusion. 

European funds available for the 2014-2020 period: EUR 15.1 billion of which EUR 7.6 billion are for the Structural and Cohesion Funds and EUR 7.5 billion for the Common Agricultural Policy (CAP).

For more information about EU funding please refer to: http://ec.europa.eu/contracts_grants/pa/partnership-agreement-bulgaria-summary_en.pdf

III. Financing Available from U.S. Institutions

a. The Bulgarian-American Enterprise Fund (BAEF)

The Bulgarian-American Enterprise Fund (BAEF) is a USD 57 million bilateral assistance fund financed by the U.S. Congress to promote the development of the Bulgarian private sector and to promote joint ventures between small and medium-sized Bulgarian firms and Western companies. BAEF has completed its mission and is currently winding down its operations and transferring its assets to a legacy foundation, the America for Bulgaria Foundation (ABF).

b. The America for Bulgaria Foundation (ABF)

The America for Bulgaria Foundation helps strengthen Bulgaria’s vibrant market economy and democratic institutions, helping the country realize its full potential as a successful, modern European nation. The Foundation seeks to enhance the longstanding legacy of goodwill and friendship between the American and Bulgarian people and to promote the US – Bulgaria people-to-people contacts and exchange of ideas and resources, through many of its programs.

More information about BAEF is available at: http://www.americaforbulgaria.org/page/home

c. Citibank, N.A. - Sofia

Citibank Sofia, a member of Citigroup, is a full-service corporate and investment banking branch. Citibank Sofia provides financial services and products to multinational companies, local companies, and the public sector. The product offerings include: debt products, structured corporate finance, project finance, government securities services, cash, trade and treasury services, asset management, advisory services on mergers and acquisitions.

More information about Citibank, N.A.- Sofia is available at:


c. The U.S. Small Business Administration (SBA)

The U.S. Small Business Administration (SBA) has delivered millions of loans, loan guarantees, contracts, counseling sessions and other forms of assistance to small businesses. It provides financial and business development assistance to encourage and help small U.S. companies in developing export markets. Export loans are available under SBA's guarantee program.

1. The Export Working Capital Program (EWCP) provides short-term working capital: up to one year. The EWCP program encourages lenders to offer export working capital loans by guaranteeing repayment of up to USD 1 million or 90% of a loan amount, whichever is less.

2. The International Trade Loan Program (ITL) provides medium to long term working capital- up to 25 years. SBA offers loans up to USD 5 million for fixed assets.

3. SBA Export Express are export loans of up to USD 500,000.

For more information about SBA programs refer to:


d. The U.S. Trade and Development Agency (USTDA)

The U.S. Trade and Development Agency (USTDA) is an independent U.S. Government agency that promotes U.S. exports for major development projects. USTDA funds feasibility studies, consulting contracts, training programs, and other project planning services related to U.S. exports, as well as grants for pilot procurements of U.S. machinery or equipment. Contracts funded by USTDA grants must be awarded to U.S. companies. U.S. involvement in project planning helps position potential U.S. suppliers at the project implementation stage.

In the past, the U.S. Trade and Development Agency has approved funding of nearly USD 145 million for the agency's project planning and development activities in Central and Eastern Europe. USTDA has been very active in Bulgaria providing feasibility studies for USD 16.5 million in the energy, environment, transport, air traffic control, and telecommunications sectors.

USTDA will continue its strong support for sectors in the Middle East, North Africa, Europe and Eurasia region that represent both high economic development priorities for host country sponsors and strong opportunities for U.S. firms. Key USTDA investments in the region include project development and investment support studies related to projects in transportation and trade logistics, internet data center development, geothermal energy, refinery modernization, gas fired power plant development, smart grid modernization, and disaster preparedness and recovery. In the last five years alone, USTDA invested USD 43.5 million in activities in the region.

For more information about USTDA’s funded projects refer to:


e. Overseas Private Investment Corporation (OPIC)

The Overseas Private Investment Corporation (OPIC) is a self-sustaining U.S. Government agency that promotes growth in developing countries and transition economies by encouraging U.S. private investment. OPIC's key programs are its loan guarantees, direct loans, and political risk insurance. OPIC's main involvement in Bulgaria is with the Southeast Europe Equity Fund (SEEF), a USD 150 million equity fund established together with George Soros for investment in the region.

OPIC also offers an Eastern European Growth Fund, designed to match OPIC funds with private venture capital to finance new business; the Small Business Loan Guarantee Program; the Bancroft Fund, and an environmental investment fund. So far OPIC has agreed to provide political risk insurance for the USD 200 million project for the modernization and rehabilitation of the Maritsa East III thermal power plant with the participation of Entergy and the Bulgarian National Electric Company.

OPIC has recently undertaken several initiatives to increase its support for small U.S. businesses in their efforts to invest in emerging markets overseas. The new Small and Medium Enterprise Department and OPIC’s Small Business Center (SBC) were established specifically to address the needs of small and medium-sized American companies in order to ease their entry into new markets.

The Small and Medium Enterprise Department will be responsible for OPIC’s Direct Loan program, which provides financing to U.S. businesses with annual revenues under USD 250 million. Other finance activities will be housed in a new Structured Finance Department, which will be responsible for the current Investment Guarantee program, as well as special initiatives.

Building on OPIC’s outreach efforts to the small business community, the Small Business Center (SBC) offers qualified small businesses the opportunity to utilize OPIC’s resources with improved customer service, flexible coverage and easier access through a streamlined approval process. The SBC will help meet these needs by providing financing and political risk insurance to eligible small businesses.

Any U.S. small business with annual revenues less than USD 35 million is eligible for SBC programs. For businesses with annual revenues over USD 35 million and under USD 250 million, OPIC’s regular small business programs are available.

In an effort to better meet the growing needs of U.S. small business as they expand into overseas markets, OPIC will offer political risk insurance at a reduced rate as part of its small business loan program. OPIC will offer or ‘wrap’ insurance on equity investments to eligible U.S. equity sponsors or U.S. corporate borrowers receiving SBC loans of up to USD 10 million from OPIC. The SBC loan borrower may choose this insurance coverage for up to USD 6 million of their equity investments. Pricing will be based on a one-time fee for the life of the OPIC loan up to 15 years.

More information about OPIC’s programs could be found at:

f. U.S. Export-Import Bank (Eximbank)

The U.S. Export-Import Bank (Eximbank) is an independent U.S. government agency that helps finance U.S. exports by providing loans, guarantees, and insurance. Eximbank financing is already supporting U.S. exports to Bulgaria’s power, construction, and telecommunication sectors.

For exports to Bulgarian state-owned entities, EXIM will guarantee a commercial bank loan up to 85% of the value of the contract, provided that the entity delivers a sovereign government guarantee or the equivalent. EXIM will also accept a guarantee from Sofia Municipality. It is open for projects of short or medium term (project value over USD 10 million with a maximum repayment term of 5-7 years). For private transactions, Eximbank typically requires a guarantee by a Bulgarian bank. Eximbank does not yet provide credit guarantees or insurance for routine contracts with private companies in Bulgaria.

More information on Eximbank and its financing conditions can be found on its website:

ExIm Bank

  Notice to Visitors!

  The link you have chosen will take you to a non-U.S. Government website.

  If the page does not appear in 5 seconds, please click this: outside web site

  Export.gov is managed by the International Trade Administration and external links are covered by its website  disclaimer statement.

  Notice to Visitors!

  The link you have chosen will take you to a non-U.S. Government website.

  If the page does not appear in 5 seconds, please click this: outside web site

  BuyUSA.gov is managed by the International Trade Administration and external links are covered by its website disclaimer statement.