Фонд за органите на местното самоуправление в България - ФЛАГ ЕАД

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About FLAG

Fund for local authorities and governments (FLAG) was established in March 2007 by the Council of Ministers with funding provided through the Bulgarian National Budget. FLAG is an instrument of the central government policy for regional development. Its aim is to provide financial assistance to municipalities for the absorption of as much funds as possible from the Structural Funds and the Cohesion Fund of the EU. The contribution of FLAG to the regional development involves coverage of as many municipalities as possible, located at 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.

The Fund is an institution of unique status, having no parallel not only in the Bulgarian financial and legal practice. The Fund is an independent legal entity having the status of a commercial company (joint stock company). It is structured as a revolving mechanism for financing the development and implementation of economically and financially viable projects in the area of municipal infrastructure and for supporting capacity building of municipalities with a view to absorbing funds from the structural and cohesion funds. The Fund is designed as a financial mechanism to overcome the problem of ensuring cash funds to municipalities when they develop project proposals or finance approved projects in the framework of the Operational Programmes, co-financed by the EU funds.


FLAG provides financing to beneficiaries and/or their associated partners, who prepare or implement projects under the Operational programmes, the Rural development programme, the Cross-border cooperation programmes and other programmes and financial mechanisms, financed by the EU, or under other international programmes, but only after the explicit decision of the Board of Directors of the Fund (as of this moment, these programmes are the following: Financial mechanism of the European economic area 2009-2014, the Norwegian financial mechanism 2009-2014, the Bulgarian-Swiss cooperation programme for reduction of the economic and social inequalities in the European Union 2009-2019).

FLAG provides loans only to Beneficiaries eligible for funding from the EU Funds and which are either:

  • municipalities or a group of municipalities in Bulgaria (for development of project proposals or for implementation of investment projects, approved by the Managing authority of the Operational programme), or
  • public utilities operating in Bulgaria, owned or controlled by municipalities, local governments or local government agencies in the Republic of Bulgaria (only for implementation of investment projects, approved by the Managing authority of the Operational programme).

FLAG established a partnership with one of the most respectable commercial banks operating in the country – Unicredit Bulbank (Managing Bank). The bank’s role is to assist the Fund in assessing applicants’ creditworthiness and to administer the loan repayment. FLAG finances only projects, which the Managing Bank regards as financially and economically admissible, and which have been approved by the respective Operational Programme, except for the financing of the preparation of projects (project development). The risk of the projects is minimised by the evaluation carried out by the Managing Bank; afterwards, the Fund has adopted additional criteria that aim to reduce risks for the Fund itself and ensure the prudent management of its portfolio.

Loan applications review procedure

Loan applications assessment procedure




Servicing of the loan



The municipality/municipal company utilizes the approved loan through one or more tranches, depending on what has been negotiated in the Loan agreement. The utilization schedule of the funds under the loans for implementation of projects will comply with the payment requests to the Managing Authorities of OP/RDP.


The repayment schedule of each Loan agreement is negotiated depending on the specific application, the capabilities of the municipality/municipal company and the sources for repayment of the loan. The negotiated interests on the loans are accrued and are due monthly, unless a different schedule is negotiated in the Loan agreement. The source for repayment (regarding loans for implementation of projects) of the eligible costs of the principal are the project payments by the MA, and the source for repayment of the ineligible costs – the own revenues of the municipality/municipal company.




Organisational structure


Organisational structure




Board of Directors


The board of FLAG consists of seven members including representatives of the Ministries which are in charge of the relevant operating programmes. The executive director of the Company is the representative of the National Association of Municipalities in the Republic of Bulgaria (NAMRB).



Dobromir Simidchiev


Dobrinka Krusteva

Plamen Iliev

Julia Tsolova-Ilieva

Valeria Kalcheva

Evgeni Stoev

Nadya Dankinova (FLAG executive director)






The Fund counts on small in quantity but wide profiled personnel with experience in the spheres of project implementation and appraisal, finance and municipal borrowing. The main bodies of the Fund are the departments – General administration, Lending and monitoring, Finances and financial instruments, Risk management. This structure corresponds to the wide profile of these bodies in this initial stage of development of the Fund and enables the departments in the future to develop internal structure and bodies which to focus themselves on definite activities.

Executive director

Nadya Dankinova

Lending and monitoring Department

Juliа Karadjova - director

Rossen Koznitchki - senior еxpert

Nikolay Tzvetanov - senior еxpert

Milena Pashankova - senior еxpert

Radko Bagdasarov - еxpert

Gabriela Dimitrova - еxpert

Rozalina Tsvetanova - expert


Finance, financial instruments and risk management Department

Vanina Chalakova - director

Lyubomir Tsarev - senior еxpert

Iva Petkova – еxpert

Hristo Shumanski - еxpert

Gabriela Apostolova - expert


Internal auditor

Lyubka Mazneva

Chief Accountant

Kalinka Todorova

Office manager

Daniela Nikolova


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