Bulgaria’s parliament voted on Wednesday, 159 to 45 with 3 abstentions, to finally ratify two agreements regarding the execution of the contract for the purchase of the first batch of eight F-16 Block 70 fighter jets and related equipment and armaments. The bill was approved with two readings.
One of the agreements is between the Bulgarian Ministry of Defense and the Federal Reserve Bank of New York (FED/NY). The other agreement is between the Bulgarian Ministry of Defense, the US Defense Security Cooperation Agency (DSCA) and the FED/NY and concerns certain accounts related to the financing of foreign military sales by the Government of Bulgaria.
According to the agreements, the estimated cost will be deposited into a Federal Government Trust Fund account for all Bulgarian contracts for the purchase of equipment under the Foreign Military Sales (FMS) program.
The FMS program makes it possible for a part of the funds paid by Bulgaria to be deposited and invested through bank accounts and investments in the FED/NY and generate income for the Bulgarian state. The amount of funds that can be transferred in this way will be determined by the DSCA. Normally, the funds are invested in overnight deposits and federal treasury bills that vary in maturity. Funds covering current repayments under the project for the next 90 days must be held in the Trust Fund account.
On July 11, 2019, Bulgaria contracted the purchase from US Lockheed Martin of eight F-16 Block 70 multi-role aircraft and related support, munitions, Sidewinder AIM 9X Block II missiles, and related materials and services at a price of $1.2 billion. The first two aircraft were to be delivered in mid-2023 and the last two in the first quarter of 2024, but COVID-19 has delayed the implementation of the project.