Infrastructure prospectives in Bulgaria

1. Infrastructure prospectives in Bulgaria Milena Trifonova Head of Institutions and European Competence Centre ANCE Visit in Bulgaria 30 September 2008 Sofia, Bulgaria

2. Main sources of financing the infrastructure in Bulgaria EU Funds: the paramount promoter of infrastructure projects Pre-accession: • ISPA – over 1.1 BEUR already contracted under large projects in road, railway, airport, water supply and waste-water, waste landfills; • due to restructuring of the main beneficiary in road infrastructure National Road Agency the payments are blocked by the EU Commission Regional policy: • European Regional Development Fund • Cohesion Fund and • European Agricultural Fund for Rural Development The total amount aimed at infrastructure is about BEUR 6, channeled through several programmes in Bulgaria for the period 2007-2013 National and Municipal budget, privately-driven investments

3. European Funds in Bulgaria (2007-2013) – current status (1) Operational Programme Transport – main focus: A total of 15 projects will be eligible adding to ca. BEUR 1.94, out of them 3 projects (MEUR 252) are at most advanced stage: • Extension of the Sofia underground Nadejda junction – Tcherni Vrah blvd. MEUR 185.19. The selected contractors are Doğuş İnşaat ve Ticaretand Metro Trace • Electrification and reconstruction of Svilengrad – Turkish border railway – MEUR 35 • Construction of connection between Hemus Highway and Sofia Ring Road – MEUR 32

4. European Funds in Bulgaria (2007-2013) – current status (2) Operational Programme Environment – total budget of ca. 1.8 BEUR Main Focus: water supply and waste-water and waste landfills • A total of 15 projects and beneficiaries are highlighted for grant support amounting at MEUR 578, among them 3 projects at advanced stage of implementation representing ca. MEUR 193 • On May 30, 2008 a call for proposal was closed for investments in water supply and waste-water infrastructure. Budget of the call – ca. MEUR 370 Operational Programme Regional Development – total budget over 1.6 BEUR • First results for municipalities since beginning of 2008 – MEUR 72.6 • Current open calls for National Road Agency at the amount of MEUR 256 Rural Development Programme – ca. 579 MEUR for infrastructure in rural municipalities • Since the beginning of September 2008 has started the submission of project proposals

5. Main Priority Projects financed with national budget, loans and private partners Roads, Railways, Ports • Trakia Highway – expected value ca. MEUR 300, out of them MEUR 46 from the budget surplus 2008 • Railway infrastructure – allocated MEUR 15 from the budget surplus 2008 • Railway facilities – envisaged investments at MEUR 184 until 2013, loan to be arranged; • Modernization of Varna and Bourgas ports – investments at MEUR 230, loan concluded with JBIC; • Modernization of Varna and Bourgas airports – the concessionaire Fraport plans to invest MEUR 65; • Modernization of Plovdiv airport – promoted by the state and the concessionaire, investments at MEUR 20 • Sofia Lightning Project – envisaged amount of about MEUR 80 Energy Sector • Belene Nuclear Power Plant – Atomstroyexport is the main contractor with Areva and Siemens as sub-contractors. Total project cost – BEUR 4 • Petrol pipeline Bourgas-Alexandroupolis – expected project cost BEUR 1.5 • Natural gas pipeline South Stream – expected project cost BEUR 1.4

6. Thank you for your attention! If you want to know more about EU Funds & Public Finance in Bulgaria, please contact ecc@unicreditgroup.bg

7. Project & Structured Finance

8. The PSF Team is a supporting entity to existing Corporate, Key Clients and Foreign Investors, who are clients of the Group. • The Project & Structured Finance Team (PSF) • Function of PSF Team – advisory and arranging services to customers and corporate entities for providing specialised financing. • PSF competences: local arranging unit for small/mid-sized local transactions (E5m-E50/75m), supporting local unit to UniCredit Markets & Investment Banking for larger deals (>E50/75m)

9. The Project & Structured Finance Team: Competitive Advantages • comfortable local underwriting capabilities; straight-forward approval procedures also at higher approval levels (Vienna) • professional arranging and syndicating, both at local and Group levels • close cooperation and know how exchange with UniCredit Markets and Investment Banking: • a dedicated globally acting UniCredit Group Division with deep experience in Project Finance, Structured Finance, Derivatives, FX; • Key player in its core markets (Austria, Germany, Italy, Emerging Europe); • Particular CEE Competence: one of the region’s leading arrangers of Leveraged Buy-Out financings and leading project finance house (Bank Austria Creditanstalt AG)

10. Current Trends: PSF Focus in Bulgaria A.Lending to Private Equity • Mergers and Acquisitions B. Greenfield Investment Projects – • Energy & Energy Efficiency (incl. Renewables – Hydro, Solar, Wind and Biomass); • Manufacturing Industry; • Transportation Infrastructure – Roads, Seaports and Airports & PPP; • Infrastructure – Water, Waste and Utilities; • Telecommunications; • Corporate solutions • Full debt repackaging • General Corporate purposes and Large Scale CAPEX

11. Selected Transactions 2007 – September, 2008 (UniCredit Bulbank as an Arranger and/or an Underwriter): • Lending to Private Equity – Mergers and Acquisitions: • Up to 14.5 MEUR for Thermoblock Ltd, Bulgaria (Degennaro Scianatico Group, Italy) – acquisition and investment financing – completed transaction. Building materials, construction industry; • Up to 10 MEUR Revolver for KAI AD as part of UMIB (BA-CA) for 65 MEUR – acquisition from Advent – completed transaction. Building materials, construction industry; • Greenfield Investment Projects: • Renewable Energy Resources: • Up to 20 MEUR of total 54 MEUR (MLA EBRD/BA-CA) – Small Hydro Power Plants Cascade for VEZ Svoge (Petrovilla Group, Italy) with total installed capacity of 25 MW – completed transaction; • Up to 9.5 MEUR Investment Loan + L/G limit – Hydro Power Plant on Arda River (Mecamidi Group, France) with installed capacity of 8.7 MW – completed transaction; • Up to 7 MEUR investment loan + VAT limit – Small Hydro Power Plant (CO-VER Group, Italy) with installed capacity of 3.8 MW – mandated transaction; • Up to 20 MEUR from a total of 208 MEUR Senior facilities+25 MEUR VAT facility for development of 156MW Wind Farm, Kavarna, Bulgaria, with Key Sponsor AES (USA), MLA EBRD/IFC/UCMIB – mandated transaction; • Building materials, Construction Industry: • Up to 10 MEUR UCB intake from a syndication of up to 26 MEUR (UBB Partner) for Technogips (Balkanstroy Group) for the construction of three plants for gypsum and plaster, stucco, adhesives and mixtures from calcified gypsum – completed transaction; • Pharmaceutical Industry: • Up to 33 MEUR for Sopharma AD (Sopharma group) for construction and furnishing of tablet plant - mandated transaction;

12. The PSF Team in Bulgaria THANK YOU FOR YOUR ATTENTION!