Frequently Asked Questions
1. How much time does it take for the Fund’s experts to make the initial eligibility assessment of an investment project?
About two weeks, provided the investor has given sufficient project information.
2. How long does the process take from the initial submission of an investment proposal to the Fund until the signing of a financing agreement?
Two to three months, provided the investor is well prepared and gives the necessary additional information that the financing institutions may require about the project in due time. Of course, the term depends on the scope and complexity of the project: in certain cases that may require seeking an external expert opinion or market surveys, which also takes time.
3. Why is the Fund financing limited to projects in six cities only?
The limitation ensues from the agreements between the Ministry of Regional Development and the European Investment Bank when JESSICA’s framework was set for the program period 2007-13. In the new program period 2014-20 the scope of the new Regions in Growth operational program and respectively of the JESSICA-type instruments is expected to be considerably expanded to support 67 cities. However that has no direct relation to the current activity of the Fund, as it utilizes resource from the old Regional Development operational program for 2007-13.
4. Are there upper and lower limits of the size of financing and/or the Fund’s investment participation in a given project?
The Fund considers projects with a minimum size of financing above 500,000 leva. The upper limit of financing for a given project is 50% of the Fund’s total disposable resource.
5. What principles and rules are applied by the Fund concerning the selection of suppliers and contractors in the process of implementation of the financed projects?
The Fund does not participate in the selection of project suppliers and contractors; it only sees to it that the requirements of the national public procurement legislation are observed by the persons to whom they apply. It is important to note that even those persons are not required to conduct a procedure under the Public Procurement Act for the co-financing provided by SGEB and that the public procurement procedures only concern the selection of project suppliers and contractors. As for investors who are not legally bound to conduct procedures for selection of suppliers and contractors, the Fund only requires that they present at least three offers from different suppliers and contractors and a reasoned decision for the investor’s choice. That is necessary to guarantee that the public resource provided under JESSICA (the low-interest loan from the Fund) will be spent in the best and most cost-effective way. Of course, that requirement is not unconditional and is applied in cases when the collection of offers is applicable and makes business sense.
6. Why does the Fund not provide grants?
JESSICA is a financial engineering instrument aimed at providing limited public resource in the form of revolving funds, i.e. the repaid borrowed funds for a given project are reinvested in new projects, thus multiplying the effect of the scarce public resource and achieving economically sustainable urban development. Grants are provided for projects which do not generate revenue but which are important for the public. At the same time projects that have a significant social effect and also potential to generate revenue, though not as big as the market one, will more and more often seek financing with low-interest and/or long-term loans of the JESSICA type, rather than with subsidies.
7. Is a public procurement procedure required for the co-financing provided by SGEB concerning public projects?
The stand of the Public Procurement Agency is that no such procedure is required. SGEB has been chosen as fund manager and co-financing institution on the basis of a competitive bidding procedure organized by the European Investment Bank.
8. Are there any limitations concerning the location of projects in the six cities?
Until the end of 2013 projects were required to be located within the boundaries of the general plan for development of the city. Since the beginning of 2014 an eligibility criteria is for projects to be located within the boundaries of the identified areas of impact in the integrated urban renewal and development plans of the six cities, which can be found in Our Projects section.
9. Do private projects have to be agreed with the bodies of the local or central government?
There is a requirement that the respective municipal administration should be notified about the implementation of the project and express in writing its positive stand on the compatibility of the project with the city development strategy and the social effect the project will achieve.
10. What level of preparedness should an applicant have to start negotiations for financing under JESSICA?
There is no special requirement; we are ready to discuss any idea that meets the program criteria. With a view of the short terms for investment of the resource, i.e. until the end of 2015, priority will be given to projects with ready architectural designs and economic rationale.