A step in the right direction: Bulgaria’s recovery plan improved after lengthy negotiations

After one year of negotiations, at the beginning of April, the European Commission finally endorsed the sixth and final version of Bulgaria’s recovery plan. According to the Commission, nearly 60 per cent of the projects included in the plan support the green transition of the country, which is the highest percentage among all the recovery plans approved so far. 

This is an acknowledgement of the good work of the green civil society sector in the country. In the previous one and a half years, numerous comments and recommendations for improvements were made on all interim versions of the document and project plans. The money that the recovery plan will distribute amounts to 10 per cent of Bulgaria’s GDP, and it was extremely important that potentially corrupt projects and practices not be allowed to creep in. 

The biodiversity perspective 

The biodiversity component is a small but very strategic part of the recovery plan. Bulgaria will take action on setting conservation objectives and measures for Natura 2000 sites, as well as on forest and freshwater ecosystems, improving connectivity within and between Natura 2000 sites, and habitat restoration in line with the EU’s Biodiversity Strategy 2030 objectives. The biodiversity component of the plan amounts to EUR 47.5 million, which is a good sign of the rising importance of nature protection as a part of the Green Deal efforts of the country. However, the component still amounts to less than 1 per cent of the total budget of the plan.  

The most positive development in the final version is that, thanks to the involvement of civil society organisations, the irrigation project that we opposed in the past has finally been excluded from the list of measures. The plan also includes a project dedicated to digitalisation of the complex management, control and efficient use of water, which is a long-awaited measure. Finally, the low-carbon economy component has been planned more strategically, and includes investment in grids, energy efficiency and the development of renewable energy sources. 

As always, there are things that could have been improved further. For example, the large, newly revealed project for the installation of a minimum of 1.4 gigawatts (GW) of renewable energy sources and batteries lacks biodiversity safeguards. 

Building renovation and energy efficiency 

The fact that the plan addresses energy efficiency with a significant amount of money is a good sign, considering that this topic has repeatedly been overlooked as a key tool in the energy transition. There is indeed a huge untapped potential for limiting, and gradually eliminating, foreign energy dependencies.   

However, the EUR 610 million allocated for building renovation covers only 5 per cent of existing multifamily buildings. So far, only 2,000 have been renovated, using EUR 1 billion from the national budget. More than EUR 25 billion will be needed to renovate all the multi-family buildings that have not been covered by the programmes. At the current pace of building refurbishment, we will need at least 200 years to complete this task. Single-family buildings will remain excluded from the scheme, so that leaves out a large number of people living in rural areas who are affected by energy poverty. 

Therefore, investments in energy efficiency need to be substantially increased. The support scheme should be changed to deliver more quality results and a more efficient use of public resources. So far, the current programme provides 100 per cent grant financing without any owner participation. The recovery plan envisages decreasing percentage of co-financing, with 80 per cent financing for those who apply starting in April 2023. It will bring some improvements in mobilising private capital and also an incentive for beneficiaries to control the quality of the renovation works. Further steps will be needed to design the financial measures such that they cover more buildings and to diversify support based on the quality of renovation as well as income levels. 

Energy production 

The biggest improvement to the plan – for which we give credit to the Bulgarian government – is the increase in the installation of new renewable energy sources capacity at an accelerated pace, together with cancelling support for gas turbines that were supposed to replace coal at one of the country’s power plants.  

The Bulgarian’s recovery plan will support investments for the production of at least 1.4 GW from renewable energy sources. This measure will be implemented on the basis of five tender procedures every six months (starting in the third quarter of 2022), each of which will aim to build a minimum capacity of 285 megawatts (MW) of installed capacity from renewable energy sources. However, the requirement of 285 MW of minimum capacity gives an unparalleled advantage to large companies and deprives small companies of the possibility to participate in tenders. 

The plan also includes a surprise measure to increase the flexibility of the energy system, with an ambitious 6 gigawatt hour (GWh) battery project. This will practically double the network balancing capacity of Bulgaria, with the introduction of a new technology that has the advantage of being able to be charged and discharged at the same time. Although this is a good idea, the process chosen to run the project raises questions. It is obvious that there is a plan to attract battery production capacity to Bulgaria. But the fact that the government has decided to structure a state-owned enterprise instead of pursuing a public-private partnership, or allowing for the participation of small companies, reinforces the doubt that this project has been proposed for the benefit of a specific owner of a battery company. 

Some of the important reforms set out in the plan relate to the management of state energy and the introduction of a 40 per cent reduction in greenhouse gases by 2025 compared to their levels in 2019, the completion of the liberalisation of the electricity market, and the closure of coal-fired power plants by 2038. We will see how they will develop. 

Although the plan was changed several times, and the most obvious measures prone to misuse of funds were removed after the continuous insistence of the civil society sector, a few controversial projects are still included.  

For this reason, civil society has proposed to establish an independent monitoring committee that would serve as a supervisory authority on the goals, targets, planned reforms and timelines stated in Bulgaria’s recovery plan. An independent monitoring committee is a must in any democratic country, and we hope that this idea will be adopted soon.