Bulgaria and World Bank Group Renew Partnership for Competitiveness, Inclusion and Low-Carbon Economy

SOFIA, September 12, 2024-The World Bank Group's Board of Executive Directors today discussed the new Country Partnership Framework (CPF) FY25-29 for Bulgaria aiming at enhancing competitiveness and social inclusion, while promoting a low-carbon and more sustainable economy.

The CPF marks a renewed engagement with Bulgaria, with a sharpened focus on climate and digital development, while maintaining the emphasis of the previous CPF on improving institutions and investing in people for enhanced competitiveness and inclusion. The program was informed by the 2022 Systematic Country Diagnostic Update, which recommended adopting a more sustainable growth model and identified key development challenges, like strengthening institutions, boosting productivity, skills, and employability along with increased effectiveness, efficiency, and adequacy of public spending for improved service delivery.

The partnership framework builds upon Bulgaria's three-decade track record as World Bank Group member. The new framework will keep the program's knowledge focus, while availing Bulgaria's access to the full range of World Bank Group instruments, including financing. The World Bank Group will ensure strong synergy among all its institutions, namely the International Bank for Reconstruction and Development (IBRD), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA) to mobilize private sector capital in support of government efforts to address the country's development challenges and achieve convergence of living standards with the rest of the European Union (EU).

"The World Bank Group partnership with Bulgaria started more than 30 years ago and is currently focused on sharing global knowledge to help unlock Bulgaria's private sector-led growth potential. Addressing the country's development challenges will require sustained policy efforts to unlock competitiveness and ensure convergence with the EU living standards for all Bulgarians," said Lasse Melgaard, the World Bank's Resident Representative for Bulgaria, Czechia, and Slovakia.

According to Lyudmila Petkova, Deputy Prime Minister, Minister of Finance and Governor of Bulgaria at the World Bank Group"The partnership model considers both Bulgaria's priorities as an EU member state and the main challenges of the global environment. We consider the CPF to be a solid foundation for a productive partnership between the World Bank Group and Bulgaria in the coming years."

"As part of this new CPF cycle, IFC will intensify its effort to maximize private investment in support of Bulgaria's sustainable and inclusive development goals," said Ary Naïm, IFC Regional Manager for Central and South Europe. "The private sector has a key role to play for Bulgaria to accelerate the decarbonization of its economy, bridge existing infrastructure gaps, and increase financial inclusion, creating opportunities for all."

World Bank Group in Bulgaria

The International Bank for Reconstruction and Development (IBRD) lends to governments of middle-income and creditworthy low-income countries.During the past three decades, the IBRD has provided $3.3 billion in financing spread across 45 operations. Throughout the partnership, World Bank engagement has been tailored towards transforming the economy from a centralized and planned one to an open and market-based EU country.

The International Finance Corporation (IFC) is the largest global development institution focused exclusively on the private sector.Recent IFC program in Bulgaria totaled US$ 690.9 million, comprised of $109 million on IFC's own account and core mobilization of $582 million, across six projects across infrastructure, insurance, healthcare, and trade finance.

The Multilateral Investment Guarantee Agency (MIGA), created in 1988 to promote foreign direct investment into developing countries, fulfills this mandate by offering political risk insurance (guarantees) to investors and lenders. As of end July 2023, MIGA did not have active outstanding exposure in the country.