The advantages of the Green transition – not only environmental protection, but also economic benefits

The price of the green transition will be paid by companies, and the main part of it will go through private capital. When it comes to the green transition, however, we must also talk about the advantages, which do not only refer to the protection of the environment, but also to the economic benefits. Our country is a good place to do business, the banking system in our country and in Europe is extremely developed and is the basis of the financing and development of companies. The goal is to attract high-tech investments, with high added value and export orientation. These are some of the highlights highlighted by the participants in the "The Price of the Green Transition" panel, part of the most successful forum for green transformation - "Green Transition Forum 4.0: The new perspectives for Central and Eastern Europe (CEE)".

For the fourth year in a row, it is organized by Dir.bg and 3E News. The three-day event began today at the capital's Sofia Event Center and will continue until Friday, June 28. More than 165 speakers from 19 countries participated in the discussions.

The discussion "The Cost of the Green Transition" highlighted how to understand the numbers with an in-depth analysis of the financial dimension of the transition to a sustainable economy. The vision of investors was presented, talking about studies of institutional investors, venture capital investors and impact funds. Also in focus were strategies to attract more capital for large-scale green projects, as well as development banks' strategies to accelerate green investments.

The panel was moderated by Iliana Andronova, Deputy Head of the Strategic Development and Green Policies Department at the Bulgarian Development Bank. The discussion was attended by Dorin Badea - senior expert on investments and capital markets in CEE at the Romanian Development and Investment Bank, Edward Randolph - director of "Investments" at Amber Infrastructure, member of the investment board at "Eneri Bulgaria", Kalina Kisiova - general manager "Corporate and SME Products and Business Development" at UBB, Dr. Manyu Moravenov - CEO of the Bulgarian Stock Exchange and Mila Nenova - Executive Director of the Bulgarian Investment Agency (BAI).

According to Nenova, the price of the green transition will be paid by the companies, "but this is a path that must be taken by them". According to her, the effect of the implementation of green policies is concrete. Large foreign investors in Bulgaria, who apply green policies, expect the small companies they work with here to also apply them. Regardless of the fact that there is no legislative requirement for small and medium-sized businesses, they become part of the process, because if they want to work with large companies, they must apply such policies, the executive director of the Bulgarian Investment Agency pointed out.

According to her, the goal of our country is to attract high-tech investments with high added value and export orientation. "We are ready for this, and the growth of entire sectors shows it. There are exceptional enterprises with high-tech production in Bulgaria. Now is the time for Bulgaria to make a transition to what we want, and this also affects the legislation we apply," Nenova pointed out.

According to her, the Law on the Promotion of Investments lists criteria according to which high-tech enterprises and those that have measures for the green transition receive the maximum amount of aid. This is included in our legislation in order to attract companies and industries that meet these goals, because there is no need to go backwards, but to look to the future and support what is latest, Nenova pointed out.

According to her, Bulgaria is currently in a position to attract serious investments and should take advantage of the external circumstances after the COVID crisis and against the background of the wars that are being fought now. After COVID and as a result of the military conflicts, investors appreciate that there are productions that need to return to Europe because they are strategic and they cannot always return to the country from which they started for financial reasons, noted the executive director of the Agency for investments.

Dr. Manyu Moravenov, CEO of the Bulgarian Stock Exchange (BSE), said that the main part of the green transition will go through private capital. Public capital will also have its function, the banking system in Bulgaria and in Europe is extremely developed and is the basis of the financing and development of companies, he believes. According to him, the projects related to the financing of the new and small companies are especially important, but the rapid steps of the green transition will pass before the financing of large companies.

The EU does not have an integrated capital market, which largely makes it ineffective, Moravenov pointed out and added that in Europe there are five large exchange groups, two or three medium-sized exchanges and seven or eight small ones. For about ten years, a union of the capital markets in the EU has been developing, which is taking small steps. In my opinion, serious steps must be taken to integrate the stock markets in Europe. The Bulgarian Stock Exchange is one of the drivers of this process at the level of Central and Eastern Europe and participates very actively in the talks, but this process is long, he explained.

Dorin Badea, Senior CEE Investment and Capital Markets Expert at the Romanian Development and Investment Bank, pointed out that when it comes to the green transition, we should also talk about its benefits. According to the expert, they do not only refer to environmental protection, but also to economic benefits, especially for Central and Eastern Europe.

Our region can benefit from this transition and for us it is an opportunity to make a big leap forward, so if we talk about costs and benefits, challenges and opportunities, we must first talk about the solutions, Badea pointed out. In his words, Europe lacks access to capital on the domestic markets.

Development banks are generally multilateral institutions, the European Investment Bank works with the whole of Europe and this is a way to mobilize capital, to finance activities and to connect them with private capital, he pointed out.

Edward Randolph, a member of the Board of Directors of Eneri Bulgaria, pointed out that our country is a good place to do business. Our activity is constantly increasing in Bulgaria. We are a big investor in energy. The country is attractive in terms of legislation, and for us as a renewable energy investor, you are blessed because there is a lot of sun and land that is not expensive and projects can be implemented, he noted.

Edward Randolph pointed out that private equity investors are highly specialized in specific assets, which means they are not familiar with others. Many investors are not familiar with Bulgaria and the country is not in the center of attention, and if we have to talk about what can be done to improve the image of the country, it is membership in the Organization for Economic Cooperation and Development, because so capital will be mobilized, he noted. According to him, joining the Eurozone is also important, but not decisive, because the currency can be exchanged.

I would appeal to the politicians not to change the legislation if they want investment because it is dangerous if major changes are made. My second request to them is that if any subsidies are given, they should not be too generous because these projects are long-term, Edward Randolph said.

Kalina Kisyova, General Manager "Corporate and SME Products and Business Development", UBB, pointed out that the financial institution is very responsible to its customers, shareholders and employees. This is why sustainability is one of our strategic priorities, and that means taking a very clear and methodological approach to assessment and setting specific goals when it comes to sustainability. We have targets for our own environmental impacts, she noted.

The largest and most significant conference on the Green Deal "Green Transition Forum 4.0: New perspectives for Central and Eastern Europe (CEE)" is organized by Dir.bg and 3E-news. The forum takes place from June 26 to 28. Representatives of more than 18 countries appear on the conference stages in Sofia Event Center, with a total of more than 2,500 participants, including more than 750 top managers, holding the key conversation about tomorrow's world.

The event is organized by Dir.bg and 3E-news in partnership with ACT Commodities, ProCredit Bank, Visa, European Investment Bank, Elektrohold, Yettel, Artex Engineering AD, UBB, Aurubis Bulgaria, Glavbolgarstroy Holding, Bulgarian Stock Exchange, UniCredit Bulbank, Bulgarian development bank, Geotechmin, Energeo, MET Energy Trading Bulgaria, Dundee Precious Metals, FLAG Fund, ICGB, The Oil and Gas Employers' Federation, Electric Power System Operator, Bulgartransgaz, Fund of Funds, Bulgarian Energy Holding EAD, Kozloduy NPP, Westinghouse, Philip Morris Bulgaria, BMF Port Burgas AD, Information Service, Bulgarian Natural Gas Association, REIB, PCONTRADE, Omega Power Group, PHOTOMATE, OMV Petrom, Bulgarian Recycling Association, TTS (Transport Trade Services) S.A, Morningside Hill, CWP Global , DEVIN, Smart Energy Trade.

Green Transition 2024 is implemented with the media support of BNT, BTA, BNR, bTV Media Group, Darik Radio, Darik Business Review, Euroactive, Economic.bg, ESGnews.bg and The Recursive.