JBIC SUPPORTS FINANCIAL AND PRIVATIZATION REFORMS IN BULGARIA Untied Loan Cofinanced with the World Bank
1. Japan Bank for International Cooperation (JBIC; Governor: Hiroshi Yasuda) signed today a untied loan totaling the yen equivalent of US$50 million with the Republic of Bulgaria to help promote wide-ranging reforms. The signing took place at the head office of JBIC between Governor Hiroshi Yasuda and Bulgarian Minister of Finance, Mouravei Radev.
2. This loan is cofinanced with the Second Financial and Enterprise Sector Adjustment Loan (FESAL II) totaling 95.5 million Euro, which was signed by the World Bank and the Republic of Bulgaria in December 1999. The purpose of the present loan is to provide support for the economic reform program in Bulgaria, which focuses on pressing ahead with privatization of state enterprises, strengthening fiscal discipline, and reforming the banking and energy sectors.
3. Under the government of Prime Minister Kostov which came into being in April 1997, the Republic of Bulgaria has been implementing a structural reform and macroeconomic stabilization program with assistance from the IMF, the World Bank and other international financial institutions. In particular, since the country adopted the Currency Board Arrangement in July 1997, pegging the domestic currency Lev to the German Mark, inflation, which at one time soared to 500 per cent in 1997, has been drastically reduced, recording a single digit figure at the end of 1999. The economy has also posted positive growth since 1998.
4. In December 1998, JBIC cofinanced a untied loan to Bulgaria with FESAL I of the World Bank. The present loan is a follow-up loan providing financial support to advance the country's economic reforms and foster a favorable environment in Bulgaria for economic activities of Japanese firms.