Photo: Rasmus Andersen on Unsplash
Bulgaria is risking delays in payments from a EUR 653 million grant package under the European Union’s Recovery and Resilience Facility, or even losing access. To meet some of the conditions, the government launched tenders for 1.14 GW of wind and solar power and 300 MW of energy storage. Separately, the European Commission approved a EUR 590 million state aid scheme for investments in electricity storage.
Three and a half years of political crisis in Bulgaria have substantially set back its decarbonization efforts, among a range of issues. The country is late with reforms enabling access to funding through the European Union. Amid ongoing turmoil, the European Commission determined that “a number of key milestones and targets are not considered to be satisfactorily fulfilled” for the payment of the second tranche from the National Recovery and Resilience Plan (NRRP).
The approval of EUR 653 million in grants implies yet unmet obligations regarding the liberalization of the energy market, boosting electricity generation from renewable sources, a climate neutrality roadmap, anti-corruption measures, public procurement, entrepreneurship and the introduction of mandatory judicial mediation.
Bulgaria and neighboring Romania are struggling to meet deadlines for several funding mechanisms. Delays can make them lose access to hundreds of millions of euros.
Commissioners can propose to suspend all or part of payment
NRRPs were approved under the EU’s Recovery and Resilience Facility (RRF). It makes up most of the NextGenerationEU spending program for a rebound from the COVID-19 crisis.
RRF consists of EUR 650 billion, of which EUR 359 billion is in grants and the rest are cheap loans. Bulgaria’s EUR 6.2 billion NRRP only consists of grant funding, of which EUR 5.7 billion through the EU. The remainder is financed with national resources.
Bulgaria and Romania are risking hundreds of millions of euros in EU funding because of delays in legislation and project implementation
European commissioners noted that a part of the EUR 653 million package is for support for renewables. They can propose to suspend all or part of the payment.
As part of the second payment request, Bulgaria has successfully implemented some measures, according to the preliminary assessment. The government published calls for tenders for 1.14 GW of solar and wind power and 300 MW of electricity storage installations.
Bulgaria has one month to respond. It then risks suspension of a sum corresponding to unfulfilled targets. After such a decision, the country has six months to meet the conditions.
Other package of grants for electricity storage gets green light
Separately, the European Commission approved a EUR 590 million Bulgarian state aid scheme to support investments in electricity storage to foster the transition to a net zero economy. It is harmonized with the Green Deal Industrial Plan.
The scheme was approved under the EU’s state aid Temporary Crisis and Transition Framework (TCTF). The administration in Brussels launched it in line with the REPowerEU plan to bolster the economy following Russia’s attack on Ukraine. TCTF is fully funded through the Recovery and Resilience Facility.
The purpose of the said scheme is to add at least 3 GWh in new electricity storage facilities to the Bulgarian power system. The idea is to integrate a higher share of renewables into the energy mix. The scheme would be open to all storage technologies.
Grants would be awarded through a competitive bidding process, the EU’s executive arm noted. It can’t exceed 50% of eligible investment costs. Bulgaria has until the end of next year to complete the endeavor.
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