THE WHITE HOUSE
Office of the Press Secretary
U.S. Initiatives to Assist Bulgaria/Southeast Europe
The visit of President Clinton to Sofia provides an opportunity to highlight several U.S. initiatives designed to assist Bulgaria, many of which will also support broader economic development in Southeast Europe. Among these are:
(a) OPIC Southeast Europe Investment Fund: Today, the President will announce OPIC's "call for proposals" to create the new Southeast Europe Investment Fund. This fund will have up to $150 million to invest directly in regional businesses, and will provide valuable capital and management expertise. The OPIC call for proposals will formally initiate the process of selecting a manager for the new fund. This manager will be charged with raising the necessary private resources that, along with OPIC debt and guaranties, will capitalize the fund.
(b) OPIC's $200 Million Line of Credit: OPIC'S $200 million line of credit promised for Southeast Europe is already active, starting with Bulgaria. As of October 1999, OPIC has provided $51.6 million maximum insurance coverage to the U.S. Seaboard Corporation for an agri-business investment in Bulgaria. With this investment, Seaboard Corporation will help bring its technology and training to Bulgaria.
Ex-Im Bank programs are open for business in the private sector in Bulgaria. This means that Bulgarian businesses can access financing through the Ex-Im Bank to purchase U.S. goods and services on credit terms from 180 days up to 5 years. Ex-Im Bank has already been open for business in Bulgaria for public sector businesses, i.e. for government-guaranteed transactions only. The ability to open in the private sector will allow Ex-Im Bank to participate further in privatization efforts in the country.
In response to the adverse effects on Bulgaria's economy due to the Kosovo conflict, USAID has concluded an agreement with the Government of Bulgaria to provide $25 million in Economic Support Funds (ESF), which Bulgaria will use to make payments on its outstanding debt to the U.S. and international financial institutions. As part of the agreement, the Government of Bulgaria will place $8 million of its own resources in a Regional Initiatives Fund that will provide an immediate economic stimulus to adversely affected municipalities, and $5 million in a Social Safety Fund, to assist pensioners to meet winter energy costs.
USAID is initiating a $7 million program to train new judges and establish a model pilot court program in Bulgaria. The program's centerpiece is a Magistrates' Training Center that will provide training for Bulgarian judges, prosecutors and investigators. Founding members of the Center include the Ministry of Justice, the Association of Judges, and the Alliance for Legal Interaction. The East-West Institute will implement the program. This effort will play a vital role in Bulgaria's economic and democratic transition by strengthening the rule of law and helping to attract foreign direct investment.
The U.S. intends to contribute up to $2,000,000 to the BAEF to support the Bulgarian-American Credit Bank (BACB) Home Mortgage Lending Program. The BACB's loan program is the only one in Bulgaria providing home mortgage loans greater than $20,000 and with a term of more than five years, giving Bulgarians - who otherwise would have to pay cash in full - a chance to finance their home purchase.
USAID is implementing a targeted development recovery strategy to provide short-term assistance to certain municipalities in Northern Bulgaria that have suffered significant interruption of trade, loss of income, and decline in government services due to the Kosovo conflict. The program will help local governments address the adverse effects of the conflict and support the development of small and medium enterprises by providing $2.2 million in technical assistance, $1 million in microcredit loans, and $500,000 to mitigate ethnic tensions exacerbated by the Kosovo conflict in targeted municipalities.
The U.S. government is providing $1 million to the American University in Bulgaria (AUBG) to support university and vocational training for Kosovar refugees. AUBG is a multi-ethnic institution established through a U.S. initiative in 1991, with funding from the U.S. government and the Soros Foundation. In all, the AUBG has received over $30 million in U.S. assistance since its founding. With this support, AUBG is actively promoting regional cooperation and integration by educating students from countries throughout Eastern and Southeastern Europe, as well as from the NIS.
A recently approved USAID program will provide $425,000 for establishing a credit portfolio guarantee in Bulgaria. The funding will provide portfolio guarantees to the United Bulgarian Bank to finance up to $6.25 million in municipal energy efficiency loans and projects. The loans will be used to improve the energy efficiency of buildings and city infrastructure (street lighting, heating systems, etc).
The U.S. Department of Agriculture is preparing to donate 15,000 tons of commodities worth approximately $5 million, including commodity and freight, to the Government of Bulgaria. The "Food for Progress" package will consist of rice and soybean meal. Proceeds from the sale of these commodities will be used by Bulgaria to support hospitals, schools, those on fixed incomes, and the unemployed. Some proceeds will support credit programs for farmers to help develop the Bulgarian agricultural sector.
Bulgaria has been identified as one of eleven pilot countries for a Presidential Internet Initiative, with an initial $1 million pledge to help get Bulgaria started. The initiative is designed to promote economic development through internet applications. Possible applications include E-commerce, international networking of Bulgarian business and economic associations, networking for Bulgarian NGOs and municipal governments, state-of-the-art banker training, among others.