A new investment package worth €86.6 million from the European Regional Development Fund (ERDF) adopted earlier this month will finance further works on the western part of the third line of the Sofia Metro, Sofia Municipality announced. The funding will be used to build four new underground stations on a 4 km-long section, from the city centre (Zhitnitsa Street) to the Sofia Ring road via the Ovcha Kupel district, in the south-western part of the city.
The state co-financing amounts to BGN 214.7 million. Sofia Municipality insisted on the construction of a multi-stacked parking right next to Gorna Banya station so that more people could leave their cars and shift to subway transport.
The new underground stations are part of metro line 3 that will run from Valdimir Vazov Boulevard to Zhitnitsa Street and include eight stations. It will link the districts of Suhata reka, Hadzhi Dimitar, Krasno selo, Slaviya, Belite brezi, Lagera, Hipodruma with central Sofia and provide connections to Lyulin, Mladost, Obelya, Nadezhda, Lozentets and Druzhba via lines 1 and 2. The investment also covers the construction of a depot and the purchase of 20 metro trains. When complete, line 3 is expected to expand to a total of 16 km in length, with 19 stations, bringing the network to 56 km of lines and 53 stations by 2020.
Over half a million people a day now use the Sofia Metro and with completion of the first phase of line 3, this is set to rise by additional 96 000 people. The reductions in travel times are expected to generate savings for the economy of over EUR 19 million by 2020. By diverting passengers away from other forms of transport, the new line should help to eliminate 90 000 tonnes of CO2 emissions a year, as well as cutting traffic accidents and transport maintenance costs, leading to additional savings of over EUR 8 million by 2020.
EU co-financing from the ERDF for the Sofia Metro in the period 2014-2020 amounts to EUR 361 million. This equates to a total EU funding contribution of EUR 847 million for the construction of the Sofia Metro from 2007 onwards.
Sofia Municipality plans to gradually launch 60 new gas buses on public transport lines. Buses have a capacity of 100 people and 32 seats. Vehicles are equipped with accessibility platforms, air-conditioners, cameras for the safety of driver and passengers, as well as information boards to help travelers. Public transport in England, Italy and Spain benefits from the same class of buses.
The new vehicles in the metropolitan transport are in line with the measures of the municipality to fight the high air pollution in Sofia. The first 20 buses are in operation as of July 25 on the lines in the northern and western regions of the capital.
Earlier this month, Evgeni Krussev, deputy mayor of transport, announced the installation of USB ports and providing free internet access to more than 230 city buses on a total of 20 urban lines. By the autumn, the charging ports will be gradually installed in all new vehicles. In the long run, provision of chargers in the trolleybuses, trams and subway is also planned.
On July 20 Sofia Airport was awarded the first prize for fastest growing traffic in the category from 3 to 5 million passengers from the online magazine for aviation news and analysis www.anna.aero. The EURO ANNIES award was given because of a record increase of 21.8% of passengers in 2016. The awards are given for the eighth consecutive year after an analysis of the results of more than 350 airports across Europe.
The number of passengers traveling through the airport is increasing again this year, and the trend is expected to continue in 2017 and 2018. A record number of 4 980 387 passengers passed through the two terminals in 2016. Mid July, Wizz Air, which had the largest market share for passengers to and from Sofia in 2016, announced it would increase its passenger capacity to 2.54 million in 2018, an 12% increase over 2017 and 40% over 2016. In early March, the carrier launched the first Sofia-Varna domestic line and plans to launch two more destinations from Sofia Airport – to Lisbon and Nice next year.
Since 2009 the tourist flow to Bulgaria has been growing steadily. The number of tourists and the revenue from the sector has also grown. In 2016 Bulgaria welcomed a record 8 252 000 tourists and the revenue from international tourism was EUR 3 151 900 000. This year a further 10% increase in number of tourists is expected.
A Deutsche Welle report recently highlighted the reasons why Bulgaria is expecting yet another great summer. According to the report, Bulgaria remains one of the most preferred tourist destinations for families from the Russian Federation (71 000 tourists from Russia visited the country for the period January-May, which is a growth of 6.4% compared to the same period in 2016).
The growth from the German market is even greater – over 15%. According to tour operators most inquiries about holidays in Bulgaria come from Germany.
Rural tourism in Bulgaria has also reported nearly 20% growth since the beginning of the summer, according to the Association of Bulgarian Villages. For August 85% of the accommodation capacity for weekdays is filled, and it is approaching 100% for periods of national holidays. Foreigners in rural tourism account for 20% of all tourists in the sector and from the beginning of the season there is an increase in the number of visitors from
At the end of June, Sofia Municipality was awarded the Partnership and Provision of Best Conditions for Growth in the Technological Sector in Bulgaria by the Bulgarian Outsourcing Association (BAA) and the Bulgarian Association of Software Companies (BASSCOM). At an official ceremony of the second edition of the Innovations, Technology & Sourcing Awards, BAA and BASSCOM recognized the efforts and achievements of Bulgarian companies in the sector of outsourced services and IT, as well as of investors and local authorities.
It is clear to everyone in the sector that Bulgaria continues to be a country that offers very favourable conditions for the development of the outsourcing and the IT industries. This is directly related to the quality labour pool and the long-term vision of local and foreign investors in the country.
Shared services in figures
According to Stanimir Nikolov, Chairman of BAA, the outsourcing industry is creating a sizable percentage of the country’s GDP. For 2016 growth is over 4.5% and the positive trend continues. The association predicts that growth will double by 2020, and the number of people employed in the sector will exceed 60 000 with 45 000 at hand at the moment.
The salaries in both process outsourcing and technology outsourcing are currently approximately four times higher than the national average, according to BASSCOM’s annual report on the state of the software sector in Bulgaria, 2016. The salaries in the sector are expected to continue to grow by 5-10% per year.
According to Cushman&Wakefield Forton, the outsourcing industry generates more than 70% of the demand for office space in the country, followed by pharmaceutical companies and companies in the financial sector. The interested generated is for Sofia, as well as for the other big cities, where many companies are opening a second office.
Bulgaria as an Outsourcing Destination
In 2015 Bulgaria received two awards for best outsourcing destination. In October the country was awarded with European Outsourcing Association Award (which distinguishes the best outsourcers in Europe) and a month later, the National Outsourcing Association of the United Kingdom. Then Kerry Halard, the Head of EOA and CEO of NOA shared in an interview with economy.bg that the awards were given as a recognition for the extremely rapid growth and are a proof of the impressive progress the country is making in building an increasingly stable image of a promising destination for outsourcing. Among the positive trends
The largest information and consultancy network in Europe Enterprise Europe Network (EEN) just launched the pilot phase of its newest online platform NIR-VANA. The project aims to develop online services that will help small and medium size enterprises (SMEs) to innovate together with external partners, often referred to as open or collaborative innovation. Innovation advisors will provide services during the entire innovation process through the online platform where SMEs can collaborate, co-create and co-participate in innovation projects with other SMEs, experts and researchers from all over Europe.
Several innovation support services are currently available – video lessons, each lectured by an expert in the field, videos, articles, publications, practical activities and a self‑evaluation questionnaires. Participants will be both guided and assisted during the process of learning the concepts corresponding to each lesson. After completing each task, the participants can share their solutions in the forums of the platform and the system will allow them to both see the solution that an expert has suggested for each task and share their conclusions with those colleagues that may be active in the forums. The open courses cover the following subjects:
NIR-VANA targets SMEs, Innovation support advisors and researchers and consequently will develop an online solution based on training that will not only consider new and existing technologies and platforms but also the innovation culture in SMEs and their ICT readiness.
The project is based on the Open Innovation concept – an innovation strategy by which companies go beyond their internal boundaries when designing and developing Innovation projects. Combining internal and external knowledge and skills appropriately, these companies are open to share and integrate/acquire ideas with a number of collaborating stakeholders (consumers, users, employees, other companies, technology centres or research institutions, universities…). Cooperations built in such a collaborative manner
Technology Fast 50 for Central Europe, a program organized by the international consulting company Deloitte, accepts applications by start-ups and developed technology companies until July 31. The applications must be completed online form on the Technology Fast 50 website. The ranking of technology companies is based on the revenue growth over the past 4 years – from 2013 to 2016. The applications will be processed by September 31 and the announcement of the list of Central Europe’s 50 best companies will be on October 12.
Bulgarian companies will compete with businesses from Albania, Bosnia and Herzegovina, Estonia, Kosovo, Latvia, Lithuania, Macedonia, Moldova, Poland, Romania, Slovakia, Slovenia, Serbia, Hungary, Croatia, Montenegro and the Czech Republic. Applicants may compete in three categories. The main category, “Fast 50”, ranks companies with at least EUR 50 000 in revenue for each year of the reviewed period. Well-established businesses, with more than EUR 25 000 000 in revenue, will compete in the “Big 5” category. The “Rising stars” category recognizes companies at an early stage of development but with a minimum of 3 years and annual revenue of over EUR 30 000. There is also a special award – “Most disruptive innovation”. This category was opened last year and now will rank for the second time the companies that develop innovative products or services that have a revolutionary impact on the market. For this category, revenues for the previous four years are not relevant. The award is given to organizations that are pioneers in a particular idea or development and its implementation. The first company that was awarded in this category in 2016 was Polish HiProMine, which uses technology based on the natural ability of various insects to process waste organic matter.
In 2016, a total of 261 applications were submitted for Technology Fast 50. Bulgaria’s finalist became Bulpros Consulting AD, which ranked 24th in the main Fast 50 ranking, with a growth rate of 560% for the four-year assessment period. Bulpros Consulting creates and develops software products, provides cloud services, develops web and mobile applications. The company’s profile can be found in the pdf file of the top list of the 50 companies for 2016.
Three international rating agencies improved their assessments of Bulgaria. These are S&P Global Ratings, Moody’s и Fitch Ratings. Here are the ratings.
S&P Global Ratings
The agency upgraded the outlook on Bulgaria’s sovereign credit rating to “positive” from “stable”. S&P affirmed Bulgaria’s long- and short-term foreign and local currency sovereign credit ratings at BB+ and B, respectively. The outlook revision reflects the solid development of the external and fiscal performance, which has lifted Bulgaria’s credit metrics. The economy is more export driven and less leveraged than in the past. The agency expects the economic recovery of our country to continue in 2017 thanks to an increased domestic demand and a smaller share of exports. The improvements are reflected in the labour market, thereby raising disposable incomes and private consumption.
S&P Global Ratings however warns that the level of non-performing loans in the banking system remains high. Bulgaria faces structural constraints related to demographic challenges – emigration of skilled parts of the labour force, and an aging society. The agency could revise the outlook to “stable” if Bulgaria’s balance of payments deteriorated or the financial system needed significant government support or if the downward trend in non-performing loans reversed.
International rating agency Moody’s confirmed Bulgaria’s issuer rating at Baa2 with with stable outlook. The rating is supported by the indicators of sustainable economic development, a good fiscal position and a stable expectation for GDP growth in the medium term.
In 2015 and 2016 Bulgaria’s economy grew by 3.6% and 3.4%, respectively, mainly thanks to rise in private consumption and net exports. In the coming years, Moody’s experts expect continued growth, supported by improved market conditions, strengthened domestic demand and greater absorption of EU funds, which in turn will result in positive contribution of investment to the gross domestic product. Moody’s forecast a GDP growth of 2.9% for both 2017 and 2018.
Another factor for Moody’s positive rating is the Bulgaria’s strong balance sheet – low and declining debt levels and a significant fiscal reserve. The analysis notes the budget surplus in 2016, amounting to 1.6% of GDP, as a result of good revenue collection and lower-than-planned capital expenditures. Furthermore, Bulgaria’s debt is significantly lower than the average for countries with the same credit rating (Baa2).
For the period until 2020 Moody’s forecast a decreasing deficit, a balanced budget and a decline in the government debt-to-GDP ratio to 23%
Don’t miss out in Sofia in June:
Financial Forum Innovation, June 13
Financial Forum Innovation is an unique independent event dedicated to the financial innovations in Bulgaria. The event is organised by the Bank of the Year Association in partnership with UNWE.
Innovations in financial sector are an increasingly significant factor in the development and success of financial institutions. We need to continually innovate in the purpose to be relevant and adequate to the modern global consumer of financial products and services. Consumers are increasingly informed, educated and demanding. Their criteria for a modern financial institution inevitably include availability of online and mobile banking, presence in social networks and other platforms and channels, as well as flexible, innovative products. In this respect, innovations are an integral, essential and vital part of the future of financial sector.
The panelists of the Conference are experts from the banking sector, not bank financial institutions, hi-tech companies, innovative companies from different areas of business in Bulgaria. In the Agenda:
For more information and registration, visit the official website of the event.
Strategic Infrastructure and Investment Conference, June 15
Annual Conference Strategic Infrastructure and Investments will take place for the twelfth time on June 15, 2017 at Sofia Event Center.
The conference is organized by The CITY Media Group, and represents a highly appreciated by the industry event that provides a platform for communication and discussion at the highest management level – for the public sector and the institutions, the leading companies on the market and the experts in the sector. The event provides an opportunity to communicate and discuss trends, policies and strategies in the planning, financing, construction and development of the strategic projects in Bulgaria and the region.
Highlights in the programme for 2017 will be Development and funding of strategic infrastructure of Bulgaria, Transport and transport infrastructure Bulgaria 2014 – 2020, Ecologic infrastructure, Energy infrastructure.
For more information, please cisit the website of the event.
ON!Fest 2017, June 24-25
ON! Fest is one of the largest urban culture festivals returning to Inter Expo Center with a promising
For the fourth consecutive year, Innovation Starter organized Academy of Innovation – Sofia Innovation Hackathon for students. The most important part of the competition was a 24-hour marathon, where the young teams developed and presented great ideas within three categories: Digital Environment, Products and Services of the Future, Branding /Competitive Advantages/ of Sofia City.
This year students from New Bulgarian University (NBU), Sofia University “St. Kliment Ohridski” (Sofia University), University of National and World Economy (UNWE), American University in Bulgaria (AUBG), Software University (SoftUni), University of Finance, Business and Entrepeneurship (VUZF) took part in the event.
The competition is supported by the European Commission in Bulgaria and Sofia Municipality. The prize pool was 10,000 lv. for the team with the most creative applicable idea and a visit to Brussels with the assistance of the European Commission in Bulgaria.
Out of a total of 110 registered teams on the first day of Sofia Innovation Hackathon 2017, 28 teams of innovators qualified and went on to the 24-hour thought and work marathon to come to an idea for achieving a quality change in the capital city. In all 24 hours of the hackathon, the students were accompanied by mentors who went from team to team, asked questions, gave directions for the development of the idea, or deliberately diverted the conversation in a bid to boost its development. Among the teams’ first ideas were proposals for medical breakthroughs, how to travel smarter and faster on the subway, how to work in the park, a new registered sign for Sofia, how to unite people for urban causes, how to live together in a more eco-friendly, quality and digital way. Twenty-one of the 28 teams dared to participate in the final stage and presented their final ideas to the jury, which chose four finalists:
After the final vote, Phil`s mind was declared winner with an idea that would matter in medicine far beyond the boundaries of Sofia – an apparatus which converts magnetic resonance
Sofia gathered more than 60 lecturers and over 2,500 visitors during the annual two-day technology conference DigitalK – one of the leading digital technology forums in Southeast Europe.
On June 8 and 9, the organizers from “Kapital” and the funds LAUNCHub Ventures and NEVEQ gave the audience the opportunity to meet with the latest trends in the world of digital transformation. Key topics this year were the new business models, structures and processes created by the turbulent digital transformations, the latest blockchain technology, technology innovations in payments, self-driving cars, the best ad channels and formats for today’s consumer and what will be the first applications of artificial intelligence.
Among the lecturers of the event were Naveen Jain, serial entrepreneur and author of the Moon Express project which envisages extracting resources from the moon (and in fact the first person licensed to fly passengers to the moon as the company has NASA’s and the US Federal Aviation Administration’s approval for such flights); Dani Behrendt – the man behind Apple’s self-driving car; Brock Pierce – among the pioneers in the introduction of digital currencies in games and chairman of the Bitcoin Foundation, as well as a co-founder of Blockchain Capital; Peter Kim – digital strategist, currently head of Digital Consumer Engagement at the Lego Group; Masha Yoveva – Senior Product Designer at Instagram and many more of the visionaries who set the themes of the future today.
Photos and videos from the event can be viewed on the Facebook page of DigitalK 2017.
— Digitalk (@digitalkcon) June 8, 2017
The traditional competition for start-ups with a prize pool of EUR 10,000 took place at the main stage of DigitalK. Out of this year’s 200 applications, 15 ideas under development gained the right to be presented before investors on a big stage on the first day of the forum. Three teams reached the final – two from Bulgaria and one from Turkey.
The big winner this year was Bulgarian ClaimCompass with its project for providing legal assistance for delayed and cancelled flights or in case of denied boarding an airplane. So far, the young company works for flights within Europe, but plans to expand its services to India, Brazil and the United States.
Krum Hadjigeorgiev is co-founder and CEO of the Bulgarian software development outsourcing company Melon.
Melon is a Microsoft Gold Certified Partner, a member of the Bulgarian Association of Software Companies (BASSCOM) and the Bulgarian Web Association (BWA), and has won a number of awards, including the Software Development award at E-volution Awards 2016 organized by Forbes. Melon is running offices in Macedonia, Belgium and Austria, but still, most of the company’s staff is located in Sofia delivering cervices to customers from all over Europe and the USA.
Please tell us briefly about your investments in Sofia? What does your company do in Bulgaria and outside?
Melon is a software development company delivering outsourcing services to customers all over Europe and the USA. We’ve been around since 2000. We set up business in Sofia as all the founders are from the city. We have been growing here since, but also for the last few years we’ve been running offices in Veliko Tarnovo and Skopje. Still, Sofia is where most of our 160+ people are and that will be the case going forward.
What motivated you to invest in Sofia?
As locals, this was the natural choice. Still, our business is our people and when it comes to software engineers, Sofia is the one city in Bulgaria with the largest, fastest-growing and most vibrant community of IT and software professionals. We’ve seen our sector grow and flourish. We somehow got together with peer companies into our software association BASSCOM and mostly helped each other face the common challenges as a community and sharpen our competitive edge through fair competition for talent and clients. We love the city’s growing greener and more European. The airport is 10 minutes away from our office, which brings Europe to a mere 2 hours from most places our clients operate.
What are the advantages of investing in Sofia?
The biggest advantage for companies like Melon to invest in Sofia is the growing community of great software engineers and IT professionals. The city has great schools as well as private academies to create new talent which our industry needs. It has the infrastructure and the spirit to keep these people in and give them the opportunity for good quality of living and professional growth. The city is growing and improving.
What sort of disadvantage have you faced so far?
Air is bad. Probably one of the worst in
The Climate-KIC Accelerator Bulgaria program is open for the second consecutive year for applications by start-ups with ideas in the field of clean technology, environmental protection and sustainable energy solutions. Climate-KIC Accelerator is the largest European entrepreneurial initiative for clean technologies to tackle climate change. It is held by the Cleantech Bulgaria NGO and is supported by the European Institute of Innovation and Technology. Those willing to apply for the program must complete the application form on the Climate-KIC Accelerator website no later than July 3. The application must include a brief presentation of the company and the team.
The program will select eight teams that will go through a number of training sessions for 14 weeks. The sessions include mentoring courses, lectures and workshops for development of strategies behind the products, their marketing and presentation to investors. The teams will also work on individual schedules and on individual tasks and objectives pursuant to the nature of the business idea.
The format of Climate-KIC Accelerator is open to start-up companies at an advanced stage of development but also for those who do not have a ready-made project but have studied the market well and are ready to start their business during the 14 weeks of the program. Ideas offering sustainable energy solutions, innovations to tackle pollution and climate change, purification systems, etc. will be assessed. A basic requirement for all candidates is to have a well-formed team, a good level of English and a possibility for responsible participation in the training program for the period from August to December 2017.
The selection of the most promising eight teams and their ideas will take place in two stages. The initial selection is made by a local jury based on the submitted projects in the completed application form. The selected finalists from the first stage will have to present their ideas to an international jury consisting of representatives of the accelerator network. The best Bulgarian companies that will join the program will be announced at the end of July. In addition, the international jury will have to determine the amount of the grant that each team will receive, depending on the needs of the development on the way to its realization. The amount of the financial support is between EUR 15 000 and EUR 25 000.
Those who have participated in the first edition of Climate-KIC in Bulgaria will continue