Bulgaria/Grain Receipts Programme

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The programme will introduce a new financing system, which will provide secured lending for the seasonal working capital needs of farmers by using warehouse receipts. The creation of secure collateral for banks will mobilise credit for the agribusiness sector in Bulgaria. The project aims to demonstrate the viability in Bulgaria of a system of financing working capital in the agribusiness sector using grain receipts, reducing financing costs and increasing the options available to the farming community. The programme will contribute to competitive market interactions in the grain sector by introducing a new financing instrument to banks and farmers. It simplifies the administration of loans and reinforces the legal surety of all parties involved in credit transactions. It will also improve the functioning of markets by giving the farmers the freedom to choose whether to sell their grain at harvest or to store it and finance it. The project is the second of this nature (the first project was in the Slovak Republic) and is expected to act as a model for other projects in the Bank’s countries of operations. The final borrowers under this programme are agricultural producers and processors, who will borrow against grain stored in licensed warehouses. The framework provides for financing of local Bulgarian banks, which will on-lend the funds against warehouse receipts. DM 50 million (EUR 25.5 million) framework. DM 50 million (EUR 25.5 million) framework. This intermediated financing operation has no direct impact on the environment. Trade involving goods/activities listed on the EBRD's trade-related Environmental Exclusion List are excluded from financing under this facility. Borrowers under this facility will be required to comply with national laws and regulations for environment, health and safety. TC funding will be provided to the participating banks, enhancing their credit manuals and developing skills on how to lend against warehouse receipts.