News

24.10.2023,

The renovation program continues with 80% state subsidy, which will not be increased

Citizens will receive information at the regional information centres, while the MoRDB and the leading municipalities are working on programmes to ensure self participation and guarantee the quality of renovation works, it became clear at a workshop in Sofia.

On 24 October 2023, a media workshop was held in Sofia with government and business representatives on the topics of renovation of residential buildings and the development of energy efficiency policies in Bulgaria. Special guests of the discussion were Yulian Popov - Minister of Environment and Water, Angelina Boneva - Deputy Minister of Regional Development and Public Works, and Ivan Velkov - Member of the Board of the Bulgarian Industrial Association, Chairman of the Bulgarian Facility Management Association and Member of the Board of the International Real Estate Federation FIABCI.

"It is not natural to expect 100% financing of renovation projects, the normal values are 20-25% and we will inevitably move in this direction" - this is what the Minister of Environment Julian Popov said at the meeting, specially organized by EnEffect. "We perceive that building renovation is something that the state owes to the individual, and this is a very wrong notion. Building renovation has a lot of co-benefits, and a mechanism needs to be worked out to assess how much the particular user of the funds will actually benefit," he added. 

3,068 proposals were submitted for renovation projects in the first phase of the "Support for Sustainable Energy Renovation of Residential Building Stock - Phase 1" programme, which last provided a 100 percent grant. However, the available funding will only be sufficient for around 700 buildings, with the results to be announced after the local elections. A further 200 could be funded under Stage 2 of the programme, with no applications currently available. "The associations are waiting for the ranking, and maybe some are expecting the subsidy to increase again to 100%," said Angelina Boneva, Deputy Minister of Regional Development and Public Works. "The requirements of the EC in this respect are clear - there is no going back and there should be no going back, because the owners must take responsibility for their buildings." Change will not be easy, and to help participation, the Ministry of Regional Development is working on several new tools. One of them is the transformation of the District Information Centres into "one-stop-shops" where citizens can get information and administrative support for their participation in energy efficiency and renewable energy programmes. A guarantee scheme for earmarked loans from commercial banks, similar to the one already available for the programme for individual RES installations, is also under discussion. The most innovative approach involves the implementation of an ESCO scheme in which, with the participation of municipalities and construction companies, a third party (ESCO) would finance the participation costs of the owners and guarantee the savings with which they would repay the resulting credits. "For the third NRRP payment, we expect that there will be a development under the National Decarbonisation Fund, and even now we have enough opportunities - FLAG Fund, BDB, Fund of Funds - and we will do our best to use them," Boneva concluded.

The conversation also touched upon the role of local authorities, businesses and the financial sector in implementing building renovation programmes in a mode of co-financing by citizens. "Building renovation must be an integral part of the integrated national energy and climate plan. We continue to insist on transparency in the development of this key instrument for the state and society," said Dragomir Tzanev, Executive Director of EnEffect during the meeting. Ivan Velkov, member of the BIA Board and former Deputy Chairman of the Sofia Municipal Council, identified the difficulties for municipalities to implement their own energy efficiency policies, but emphasized the readiness of the business to participate. Business is also ready - both to manage the projects and to implement them. However, both need predictability and stability in funding policies and programmes, not the campaigning we have seen so far. We also need more investment in knowledge and education because there is a shortage of skilled staff."

The discussion also paid serious attention to the problem of clean air, which, in Minister Popov's words, remains a top priority and should be much more seriously linked to policies for building renovation and reducing energy poverty. Programmes to replace outdated heating appliances in the most polluted cities continue, and a new project funded by the global Clean Air Fund will provide additional financial justification for replacing stoves.

The discussion also paid serious attention to the problem of air cleanliness, which, in Minister Popov's words, continues to be a top priority and should be much more seriously linked to building renovation and energy poverty reduction policies. Programmes to replace outdated heating appliances in the most polluted cities continue, and a new project funded by the global Clean Air Fund will provide additional financial justification for replacing stoves with modern heat pump installations. Unfortunately, however, the work on the update of the National Integrated Climate and Energy Plan, which was due to be submitted to the EC by the end of June this year with detailed priorities, policy measures and financial mechanisms, is still at the energy modelling level in the Ministry of Energy and awaits coordination with other departments. Changes to the Climate Change Mitigation Act are also being prepared, which will for the first time in Bulgaria set a binding decarbonisation target by 2050 with estimates for all sectors.