The European Bank for Reconstruction and Development is considering providing loans of up to EUR 200 M in aggregate to the Schwarz Group’s Kaufland operations in Poland and Bulgaria and Lidl operations in Bulgaria and Romania.

The proceeds will be used to finance the expansion and entry, respectively, of the two discount formats in these countries, the bank announced.

The project will primarily finance Lidl and Kaufland stores in the more remote / rural store locations of the countries. It is the fourth in regional co-operation to finance the Schwarz Group’s strategic expansion and its cost has been estimated at EUR 440 M.

The proposed project will bring new formats of modern retail and the convenience of discounter shopping to large portions of the Polish, Romanian and Bulgarian population in the more remote and rural regions, EBRD said.

The project is also expected to benefit the countries through advanced logistic systems and infrastructure as well as energy efficient construction techniques, that are closely correlated to the group’s store rollout plans.

German retailer Tengelmann decided at the end of February to sell its discount retail chains in Romania and Bulgaria to its rival Lidl, which is part of Germany's Schwarz retail group.

Tengelman, the parent company of Plus, owns 94 and 16 stores in Romania and Bulgaria respectively.

Lidl plans to launch its business in Bulgaria by the end of this year.

Kaufland is a part of the Swartz Group, which also owns Lidl. It is a soft discounter that entered the Bulgarian market in 2006 in Plovdiv. Now it is strongly positioned on the market with 31 hypermarkets across the country, five of which are located in the capital Sofia.

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