Small and medium enterprises in Bulgaria will receive a $38 million (€30 million) loan from the European Investment Bank, the EU institution said on Thursday.

The EIB loan will be used to finance the private industry and fund municipal infrastructure projects in the south-eastern European country. A major Bulgarian bank, DSK Bank will receive around $25.4 million (€20 million) and will then lend it to enterprises using “favorable conditions”, EIB said. The other $12.6 million (€10 million) will support infrastructure finance notably in the municipal sector.

The loan will enable the EIB to provide much-needed medium and long term funding for Bulgarian small and medium-sized enterprises and municipalities, said Philippe Maystadt, President of the EIB.

“SME form the backbone of a vibrant economy, and the EIB’s credit line will not only continue to assist SME development in the country but will also strengthen local financial institutions. The loan will also support the important needs in municipal infrastructure and the combination with EU grants under the Municipal Finance Facility will result in improved financing conditions,” Maystadt added.

To date, the cumulative financing by the EIB in Bulgaria amounts to $1.57 billion (€1,24 billion) which includes investments in a wide range of key economic sectors.