An Urban Development Fund is an instrument of the Operational Programme “Regions in Growth” 2014-2020 (OPRD) and is a natural continuation of the successful JESSICA initiative of the previous programming period. The funding under the new instrument covers 39 municipalities in Bulgaria and reaches a total of 353.3 million BGN. In addition to the existing financing for urban projects, funds are also allocated to energy efficiency of single-family houses and development of monuments tourism.
After winning a public tender from the Fund Manager of Financial Instruments in Bulgaria EAD, in September 2018, the “Regional Fund for Urban Development” AD was given the mandate to manage the Urban Development Fund for Northern Bulgaria (UDF North).
UDF North finances projects corresponding to the eligible activities under priority axes 1 and 6 of OPRD 2014-2020 and aim to solve problems of the urban environment and develop the tourist potential of cultural monuments.
Eligible support areas under priority Axis 1 are:
- Development of ecological and sustainable urban transport;
- Improvement of the quality of the urban environment;
- Development of sports infrastructure;
- Development of cultural infrastructure;
- Investments in areas with a potential for economic development;
- Increase of energy efficiency in single-family residential buildings and student residences.
Eligible for funding under priority Axis 6 are projects for development of tourism and the tourist potential of monuments of culture of national or world significance.
Projects under priority Axis 1 have to be located on the territory of one of the 17 largest cities in North Bulgaria: Dobrich, Gabrovo, Gorna Oryahovitsa, Lom, Lovech, Montana, Pleven, Razgrad, Ruse, Shumen, Silistra, Svishtov, Targovishte, Varna, Veliko Tarnovo, Vidin or Vratsa while the projects under priority Axis 6 can be realized on the territory of the 14 regions in Northern Bulgaria.
In addition to the funds of OPRD 2014-2020 of 118.2 million BGN, the Fund will secure additional funding from independent private investors, bringing the total amount available for final recipients to over 200 million BGN. Lending from UDF North is done at a preferential price and with a tenor of up to 20 years, which allows realization of projects of high public value that might be difficult to finance under usual banking conditions. Each project is expected to generate positive net cash flows to ensure regular loan repayment.
The loans target a wide range of potential clients such as municipalities and municipal companies, private companies, public-private partnerships and individuals.