Fund for local authorities and governments (FLAG) is established in March 2007 by the Council of Ministers with funding, provided through Bulgarian National Budget. FLAG is an instrument for the central government policy for regional development. Its aim is to provide financial assistance to municipalities for absorption of as much funds as possible from the Structural Funds and the Cohesion Fund of the EU. The contribution of FLAG involves coverage of as many municipalities as possible, located across the whole territory of the country, by creating conditions for maximum absorption of the funds from all operational programs, under which the municipalities are beneficiaries.

 FLAG’s principal activity is to provide support to Bulgarian municipals, associations and entities with municipal participation in the process of successful project implementation. The main targets of the projects include activities for modernization and expansion of municipal infrastructure and creation of sustainable local authorities.

FLAG grant loans to beneficiaries, which implement projects, financed by EU funds or other multi-donor arrangements:

  • Bridge loan – provides circulating capital for eligible costs payments on projects with financial support from EU.
  • Loans that provide own contribution to projects for necessary co-financing by the beneficiary, additional non-recoverable costs and VAT for project realization, financing and refinancing to financial corrections and etc.

Advantages of FLAG’s lending

  • Simplified applying procedure and short terms request processing;
  • Support for municipalities with different financial ratios and creditworthiness;
  • Flexibility on loan products with the specific financial products and budgetary resources of municipalities;
  • Competitive interest rates;
  • An expert team and experience in working with financial instruments;
  • Support for municipalities for administrative capacity increasement;
  • Attract private funding for public project implementation;
  • Technical support at each stage of managing and implementation process of a project.