Author: Petko Kovachev, commissioned by Za Zemiata (Friends of the Earth – Bulgaria)
/The full report, available only in Bulgarian, presents the state of play as of 17 October 2023/
‘On October 7, 2023, Bulgaria officially submitted the documents necessary to receive the second payment under the National Recovery and Resilience Plan (NRRP). This was possible after more than 30 measures were implemented in the last three months. This allowed to catch up with the serious delay in the implementation of the NRRP, as the deadline for these measures was the end of 2022, but they were not delivered on time’. This is how the Ministry of Finance’s communication from 09.10.2023 starts, concerning the second NRRP payment(1).
In our report ‘NRRP and the second instalment – is there real progress?’ we reviewed the implementation of the reforms and investments under the NRRP which are relevant to the implementation of climate policies and for the transition to decarbonisation until mid-October 2023. We reviewed not only activities linked to the energy sector but also those linked to transport, energy efficiency and environmental protection (specifically biodiversity and water management).
The risks that the successful implementations of the reforms and investments faced have manifested themselves almost in full. These were political, administrative, economic and external. Amongst the political risks, we highlight the political instability, the frequent elections, the lack of regular governments, the lack of political support for certain reforms and projects, as well as their acceptance, delays in the adoption of legal acts, and corruption. The role of trade unions has been significant, as they – often in conjunction with employers’ organisations – have directly or indirectly attacked exactly these NRRP measures.
The general failings of the administration in general and in particular the Мinistries of Еnergy, Еnvironment and Waters, Regional Development and Public Works, Transport and Communication also has contributed significantly to the delays and stalling of reforms and projects. It is an issue of low capacity but also direct or indirect attempts to resist certain reforms and projects – coupled with concrete actions or inactions, – as well as the corruptive connections of members of the administration.
Within 2022 (May – September), Bulgaria implemented 22 reforms and projects, which make up the first set of interim targets. Their completion was the condition to receive the first advance payment. With a lot of effort and in a tense political environment, the package was successfully implemented and the first instalment of EUR 1368.9 mln was paid on 16.12.2022. This is how the first (tentative) stage of the implementation of the NRRP was completed.
By mid-October 2023, when our review period ends, the implementation of the Plan progresses through two more (tentative) stages:
- Second stage: from the receipt of the first instalment to the commencement of the current regular government (16.12.2022 – 06.06.2023).
- Third stage with two sub-stages:
- From 06.06 until mid-September 2023;
- From mid-September until 07.10.2023.
The second stage is characterised by delays and attempts to amend some of the commitments. Here, on one hand, there is the objective impossibility of adopting legislative reforms due to the absence of a government, but on the other hand – the willingness and efforts by the administration to design these reforms and projects in a way that is strongly influenced by the political and inter-institutional wars in the country. Furthermore, the 48th National Assembly adopted the Decision from 12.01.2023 to significantly renegotiate the NRRP precisely in the field of climate and energy policies. This decision predetermined part of the actions of the subsequent governments and the next 49th National Assembly. At this stage most of the key milestones needed to obtain the second and third NRRP payments were blocked.
The third stage (from 06.06.2023) started with the loss of valuable time – the period until the end of August was not used effectively. It coincided with the deadline to submit the Territorial Just Transition Plans (TJTPs) and this created an extremely tense situation. The Cabinet presented the main legislative proposals: the Energy Act (EA) and the Renewable Energy Act (REA) as it received them from the caretaker government. These offered formal compliance rather than high quality.
In the beginning of September, 32 out of the 66 milestones needed to receive the second instalment were still outstanding, including 17 out of the 27 reforms and investments linked to energy and energy efficiency (Таблица 1 и 2/ Table 1 and 2, page 11 – data from EUMIS from 07.09.2023).
Table 1
| Payment | Total milestones | Fulfilled | Unfulfilled | Climate, energy and energy efficiency targets | Fulfilled targets for climate, energy and energy efficiency | Unfulfilled targets for climate, energy and energy efficiency |
| 1 | 2 | 3 | 4 | 5 | 6 | 7 |
| 1 | 22 | 22 | 0 | 4 | 4 | 0 |
| 2 | 66 | 34 | 32 | 27 | 10 | 17 |
| 3 | 46 | 3 | 43 | 18 | 1 | 17 |
| 4 | 41 | 0 | 41 | 19 | 0 | 19 |
| Total: | 175 | 59 | 116 | 68 | 15 | 53 |
Source: author’s calculations based on EUMIS data as of 07.09.2023
For the purposes of this analysis, the climate, energy and energy efficiency milestones of the NRRP include also milestones that have been identified by the author as contributing indirectly to these areas.
Column 1 shows the numbers of advance payments up to the end of 2023. In column 2, the total number of intermediate targets (milestones) for each advance payment; in column 3, the number of milestones fulfilled for each payment; in column 4, the number of milestones not fulfilled for each payment; in column 5, the climate, energy and energy efficiency targets identified in each payment; in column 6, the climate, energy and energy efficiency targets fulfilled; in column 7, the climate, energy and energy efficiency targets not fulfilled.
The distribution of the 68 climate, energy and energy efficiency targets (including good governance) is as follows:
Table 2
| Ministry | Total | Fulfilled | Unfulfilled |
| 1 | 2 | 3 | 4 |
| Ministry of Energy (ME) | 23 | 5 | 18 |
| Ministry of Environment and Waters (MOEW) | 4 | 0 | 4 |
| Ministry of Regional Development and Public Works (MRDPW) | 10 | 5 | 5 |
| Ministry of Transport and Communication (MTC) | 12 | 2 | 10 |
| Ministry of Economy and Industry | 1 | 1 | 0 |
| Ministry of Agriculture and Food | 3 | 0 | 3 |
| Ministry of Innovation and Growth | 8 | 2 | 6 |
| МE/Ministry of Innovation and Growth (MIG) | 1 | 0 | 1 |
| MOEW/ME | 3 | 0 | 3 |
| MRDPW/ME/SEDA | 2 | 0 | 2 |
| MRDPW/MEOW/MTC/ME | 1 | 0 | 1 |
| Total: | 68 | 15 | 53 |
Source: author’s calculations based on EUMIS data as of 07.09.2023.
The table reflects the change of the responsible ministry for the development of the Mobility Promotion Act – MIG instead of MOEW.
Column 1 – responsible institution; column 2 – total number of climate, energy and energy efficiency milestones for which the institution is responsible for the four advance payments; column 3 – number of climate, energy and energy efficiency milestones fulfilled; column 4 – number of climate, energy and energy efficiency milestones not fulfilled.
Since mid-September, mass mobilisation has started in order to fulfil the conditions to receive the second payment under the NRRP. The issue was not just the NRRP implementation progress, but also the expectation that these funds will solve some of the budgetary issues. Under extreme time pressure and pressure from the Ministry of Finance formal progress was made, and in the end 62 out of the 66 milestones needed to receive the second instalment were reported. Was this the quality implementation sufficient to move forward the necessary decarbonisation and green transition actions? Our answer is – likely no.
In this complex environment the implementation of various reforms and the delivery of investments have been carried out with varying speed, quality and completeness. There were cases in which the reform started on time and in the implementation process there were objective or subjective issues, delays, postponements and in the end – a sprint to complete them in the last possible moment. This is what happened with the drafting of the Roadmap to Climate Neutrality and with the adoption of the amendments to the two key legislative acts in the energy sector – the Energy Act and the Renewable Energy Act. Investments in the transport sector happened under complete lack of transparency and there is still no information about how some of the reforms have happened and what result has been achieved, but they have still been marked as completed in the Information System for the Management and Monitoring of EU Funds in Bulgaria (EUMIS).
On the other hand, there is good progress in the energy efficiency programmes in buildings, specifically in the part related to public consultations, announcements and tendering. It remains to be seen how the actual works will be carried out. There is one big weakness here, however, which is relevant as a whole to the implementation of energy efficiency policies. There is a lack of an adequate campaign to explain to citizens what the benefits of their financial contributions to these programmes are. This is why there is currently a low level of interest in the newly announced tenders which are no longer 100% grant schemes.
Work within the main institution responsible for decarbonisation – the Ministry of Energy – was slow, there was a lack of communication with the stakeholders, the reform proposals were on the verge of only meeting the minimum requirements, and the texts needed to actually carry out the projects were not drafted. This is particularly relevant for the reforms related to active citizens, energy communities and others. We believe that significant internal changes need to happen in the Ministry of Energy if Bulgaria wants to speed up its implementation processes and to fulfil the set targets. The same can be said for the other two ministries – of Environment and Waters and the Regional Development and Public Works, where strong motivation is needed to carry out the activities linked to the NRRP.
In the end of August, the tension caused by the large number of key milestones that were not implemented was already felt (it should be recalled that 32 out of the 66 milestones needed to receive the second payment instalment were still not completed in the beginning of September, including 17 of the 27 reforms and investments linked to energy and energy efficiency). The attempts to finalise the TJTPs for the just transition of the coal regions and the Roadmap for Climate Neutrality generated resistance amongst miners and energy workers in the Maritsa East power complex. Their attacks were also extended towards the NRRP.
In the meantime, the Council of Ministers and the National Assembly have been rapidly adopting the final amendments to the Law on Amendment and Supplementation of the Renewable Energy Act and the Energy Act, as well as all other reforms. This rush leads to formal decisions which do not guarantee the successful implementation of the reforms. A typical example of this are the legislative amendments related to prosumers/active citizens/active customers and energy communities which we can already identify as not working – without further legislative amendments.
On 28.09.2023, the Council of Ministers approved a draft update of the budget under the National Recovery and Resilience Plan of the Republic of Bulgaria in light of the reduced maximum EU grant funding, calculated in accordance with Article 11 (2) of Regulation (EU) 2021/241, tasked the Minister of Finance to inform the European Commission of this decision and authorised him to conduct negotiations with the Commission during the procedure for the assessment of the submitted draft. The draft itself is a list of NRRP investments for which it is proposed to either be removed completely or for their funding to be modified. Under this decision, two very important projects, related to decarbonisation and conservation of natural resources were dropped: C8.I4. Intermodal Terminal Ruse and C9.I2. Digitalisation for integrated management, control and efficient use of water. For years Bulgaria has been postoping the construction of intermodal terminals which would reduce the transit road traffic at the expense of rail traffic; water management in the country leads to a huge waste of this resource.
There is reduced funding for four other investments in energy and energy efficiency: C3.I2, Investment 2.2a Grant scheme for combining renewable electricity sources with local storage (for enterprises – editor’s note), C4.I1 Support for the renovation of building stock, C4.I5 Pilot projects for the production of green hydrogen and biogas, and C4.I8. National infrastructure for storage of electricity from renewables (RESTORE). The reduction in funding for these projects is BGN 950 564 139 or 26.13% of their total value. At the same time, this represents 83.81% of the total funds reduction for the entire NRRP, amounting to BGN 1 134 239 406. Together with the dropped projects worth BGN 180 160 000, the total amount of the reduction in energy and climate related projects is 99.69%. In other words, the main fund reductions are at expense of the most important goal of the NRRP – the decarbonisation of the Bulgarian energy sector and the transition to a green economy.
Here is the final result – after the completion of the interventions on the measures that had to be prepared in order to receive the second NRRP payment (15.10.2023):
Table 1А
| Payment | Total milestones | Fulfilled | Unfulfilled | Climate, energy and energy efficiency targets | Fulfilled targets for climate, energy and energy efficiency | Unfulfilled targets for climate, energy and energy efficiency |
| 1 | 2 | 3 | 4 | 5 | 6 | 7 |
| 1 | 22 | 22 | 0 | 4 | 4 | 0 |
| 2 | 66 | 62 | 4 | 27 | 25 | 2 |
| 3 | 46 | 6 | 40 | 18 | 1 | 17 |
| 4 | 41 | 2 | 39 | 19 | 2 | 17 |
| Total: | 175 | 59 | 116 | 63 | 32 | 36 |
Source: author’s calculations based on EUMIS data as of 15.10.2023.
For the purposes of this analysis, the climate, energy and energy efficiency milestones of the NRRP include also milestones that have been identified by the author as contributing indirectly to these areas.
Column 1 shows the numbers of advance payments up to the end of 2023. In column 2, the total number of intermediate targets (milestones) for each advance payment; in column 3, the number of milestones fulfilled for each payment; in column 4, the number of milestones not fulfilled for each payment; in column 5, the climate, energy and energy efficiency targets identified in each payment; in column 6, the climate, energy and energy efficiency targets fulfilled; in column 7, the climate, energy and energy efficiency targets not fulfilled.
The distribution of the 116 climate, energy and energy efficiency targets (including good governance) is as follows:
Table 2А
| Ministry | Total | Fulfilled | Unfulfilled | |||
| Second payment instalment | Total | Second payment instalment | Total | Second payment instalment | ||
| 1 | 2 | 3 | 4 | 5 | 6 | 7 |
| Ministry of Energy (ME) | 23 | 12 | 13 | 12 | 10 | 0 |
| Ministry of Environment and Waters (MOEW) | 4 | 2 | 2 | 2 | 2 | 0 |
| Ministry of Regional Development and Public Works (MRDPW) | 10 | 5 | 6 | 5 | 4 | 0 |
| Ministry of Transport and Communication (MTC) | 12 | 5 | 5 | 3 | 7 | 2 |
| Ministry of Economy and Industry | 1 | 0 | 1 | 0 | 0 | 0 |
| Ministry of Agriculture and Food | 3 | 0 | 0 | 0 | 3 | 0 |
| Ministry of Innovation and Growth | 8 | 2 | 3 | 2 | 5 | 0 |
| МE/Ministry of Innovation and Growth (MIG) | 1 | 0 | 0 | 0 | 1 | 0 |
| MOEW/ME | 3 | 0 | 0 | 0 | 3 | 0 |
| MRDPW/ME/SEDA | 2 | 1 | 2 | 1 | 0 | 0 |
| MRDPW/MEOW/MTC/ME | 1 | 0 | 0 | 0 | 1 | 0 |
| Total: | 68 | 27 | 32 | 25 | 36 | 2 |
Source: author’s calculations based on EUMIS data as of 15.10.2023.
The table reflects the change of the responsible ministry for the development of the Mobility Promotion Act – MIG instead of MOEW.
Column 1 – responsible institution; column 2 – total number of climate, energy and energy efficiency milestones for which the institution is responsible for the four advance payments; column 3 – number of climate, energy and energy efficiency milestones for which the institution is responsible for the second payment; column 4 – number of climate, energy and energy efficiency milestones fulfilled; column 5 – milestones fulfilled for the second payment; column 6 – number of climate, energy and energy efficiency milestones not fulfilled; column 7 – milestones not fulfilled for the second payment.
What conclusions could we draw?
- The prolonged political crisis is a destroyer of good and timely decisions. The main damage is:
- It causes politicians to speak untruths and to attack sensible proposals (in this case – related to NRRP) due to purely expedient political and personal ambitions;
- It hinders and even blocks the possibility of adequate communication with the other stakeholders on specific issues or on the whole NRRP.
- As usual, the old weakness of the administration has manifested itself: to expect instructions for every action, for every step in one direction or another. At the same time we can see again that where the status quo needs to be preserved, bureaucrats do not hesitate to act. If we want to make progress and to use EU funds efficiently, as well as national funds, we need to commit to a fundamental reform of the administration of all levels.
- It has become clear that the interdependence of strategic documents and plans such as the NRRP, the National Energy and Climate Plan and the TJTPs can play a bad trick, especially in a period of crises with the threads of blockades, strikes and political attacks (demands for resignations). This requires a very strong communication strategy to all stakeholders which is currently lacking.
- Part of this communication strategy is the system EUMIS (Information System for Management and Monitoring of EU funds in Bulgaria). Unfortunately, in the process of drafting this report, we have encountered some serious flaws. Two of these are the following: 1) the lack of information updates (for example when a certain reform is transferred from one institution to another) and 2) the lack of information for procedures that are allegedly closed. The cases, outlined in Annex 2, provide us with a reason to request an extensive review of EUMIS by its managers. The system is Bulgaria’s contribution to efforts to make it easier to work with potential EU funds beneficiaries, to clear public communication and open information. It would be a shame to lose this valuable asset (and to compromise its credibility).
- With regards to the quality of the NRRP activities of interest to us in the last 12-15 months, as we have often pointed out, requires a separate analysis. Here we have attempted to touch upon some elements of such a qualitative analysis but within the timeframe, which coincided with the second substage of the third stage of NRRP implementation, such a comprehensive examination has been impossible to conduct.
There will now be two months of negotiations with the European Commission on the second payment instalment request. When and how it will occur and whether in the meantime the implementation of commitments, related to the receipt of the third and fourth payment, what deadline extensions will be agreed on them and also how the implementation of the already reported investments and reforms will continue, remains to be seen. We will follow these because they are important for Bulgaria. Not for yet another transition but for its sustainable progress towards decarbonisation, towards a greener economy and a greener life.
