Bulgaria – an ideal business environment

European Regional Development Fund

Essence and aims:
ERDF is primarily investment fund. By decision of European Commission that entered into force on 1 January 2007 was accepted new Regulation № 1080/2006. Three new aims were accepted and the amount of 308 billion euro was designed for funding activities within these three aims. These aims are cohesion, regional competitiveness and employment and European territorial cooperation.

First aim is intended to accelerate the convergence of the least-developed Member States and regions by improving conditions for growth and employment. It will be financed by the ERDF, the European Social Fund (ESF) and the Cohesion Fund. Second order aims to increase competitiveness, employment and attractiveness of regions which are different from regions of the most disadvantaged. Last order for period 2007-2013, aims at strengthening cross-border, inter-state and inter-regional cooperation and builds on existing initiatives Interreg. It will be financed by the ERDF. The regions eligible for funding are those regions at NUTS III and are located at internal land borders and certain external land borders and some areas along maritime borders separated by a maximum of 150 km. On the other hand, the ERDF pays particular attention to spatial characteristics. ERDF is to reduce economic, environmental and social problems in cities. Areas affected by geographical features (remote, mountainous or sparsely populated areas) benefit from special treatment. Most remote areas will receive special assistance from the ERDF due to their remoteness. ERDF aims to strengthen economic and social cohesion in the European Union, restoring the imbalance between regions.

Financing from ERDF:
• direct aid to investments in companies (in particular SMEs) to create sustainable jobs;
• infrastructures linked notably to research and innovation, telecommunications, environment, energy and transport;
• financial instruments (equity-fund risk, fund local development, etc.) to support regional and local development and to facilitate cooperation between cities and regions;
• Technical assistance measures.Changes for next programming period:
There are changes in aims and priorities of ERDF for the next programming period. 80 % of utilized resources must be for energy efficiency if the region to which will be target investment is classified as a strong (over 85% of average GDP/h) or region in transition (over 75% of average of GDP/h), and 50 % for week regions. In Bulgaria all regions are classified as week. Another requirement is 5% of grant to be for city development.

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