Financial Products, Type and Size of Operations
Only Projects with an ample revenue generation capacity will be deemed eligible.
The Fund will lend overall BGN 36.9 million, complemented by up to BGN 73.8 million co-financed by Societe Generale Expressbank (“SGEB”).
Lending from both lenders shall be Project–related and available by way of project finance, working capital and bridge finance facilities. The amount of any individual loan, granted by the Fund, shall be limited to BGN 18 million. On a selective basis the Fund shall also consider investments in equity, taking into account that the total amount of funds extended under Equity Investment Agreements shall not exceed at any time 3% of the funds disbursed to Final Recipients under Project Funding Agreements, unless the EIB has in advance consented otherwise in writing.
The most applicable project finance loans will finance between 70% and 80% of total Project costs, including, but not limited to capital, legal, development, engineering, civil works, construction contingency, insurance, financing and initial working capital costs. Disbursements shall be made on the basis of cost proving documentation and in most cases upon presentation of progress reports from an independent technical/construction advisor. Repayment instalments on principal shall start after the commercial operation date of the Project, i.e. after expiration of a grace period covering construction period, normally within 1-3 years. Tenors and repayment schedules shall be aligned with the economics of the respective Project, with overall loan life expected to be up to 23 years.
Applicable pricing on the overall financing under JESSICA shall be determined as a combination of the following parts:
- JHFB via the Fund – Fixed rate determined by the Fund, subject to relevant and applicable restrictions
- SGEB, as co-financing partner – Market rate of EURIBOR / SOFIBOR + interest rate hedging cost + risk premium + fees
The Project selection process shall start with call for proposals launched by the Fund and published at its Internet site, as well as at the Internet site of the Managing Authority of OPRD.
The information published thereon shall be provided to the municipalities of the Cities and the local authorities shall be asked in writing to publish the information at the Internet site of the six municipalities.
The call for proposals shall provide all potential project promoters with the necessary information about the scope of the measures that can be financed, the eligibility area, the budget limitations, the criteria for selection of eligible urban development projects, etc.
An explicit condition for the Fund to consider an urban development project for financing shall be a written notice by the relevant municipality in support of such urban project, which shall be considered as evidence that the municipality has undertaken the necessary steps to publicly announce the project in order to give opportunity for public discussions.