Sources of Finance for Development of RES Projects in Bulgaria

EU Programs

Program for Rural Development 2007-2013

The Program for Rural Development ensures financing for RES activities through the following measures:

Measure 121 „Modernization of agricultural farms“

Activities which are financed through this measure include the purchase and/or installation of new machines, facilities and equipment necessary for the improvement of the agricultural production process, including:
• Preservation of environmental components;
• Electricity supply needed for the agricultural activities of the farms by the usage of biomass;
• Improving energy efficiency;

Beneficiaries of this measure could be farmers planning to invest in projects related to one or some of the activities of production, storing or processing of own agricultural products, as well as the preparation of the production for sale. From this opportunity could benefit also recognized producers’ organizations dealing with investments which are beneficial for the whole organization and are related to one or several of the main activities of production and/or storing of agricultural products produced from their members, as well as the preparation of the production for sale. The minimum amount of the total eligible costs for one project is the BGN equivalence of 3500 EUR. The maximum amount of the total eligible costs for the whole period of implementation of RRDP for one candidate is the BGN equivalence of 1 500 000 EUR.

Measure 123 „Adding value to agricultural and forest products“

The activities for which EU financing could be obtained include energy production by processing of primary and secondary biomass from vegetative and animal products. Micro, small, and medium enterprises could take advantage by the financial resources ensured by this measure. The candidates for financial help must have no more than 25% state or municipal participation. The grants depend on the size of the company and represent 50% of the total eligible costs for micro-, small and medium enterprises, 25% of total eligible costs are for intermediate enterprises. The minimum amount of the total eligible costs for one project is the BGN equivalence of 10 000 EUR.

Measure 312 „Support for the creation and development of micro-enterprises“

Finance activities include production of bio-energy for sale in cases of processing of products (raw materials), which are included in Annex №1 (RRDP), as well as the production and sale of energy from renewable sources with installation capacity of more than 1 MW.
From the financial resources granted by measure 312 could benefit micro enterprises, persons who are not registered as agricultural producers, persons who are not registered under the Trade Law, the Law for cooperation or the Law for crafts. The financial help is up to the amount of 70% of the approved costs but no more than the BGN equivalence of 200 000 EUR. The minimum amount of the eligible costs is the BGN equivalence of 5 000 EUR. The maximum amount of the eligible costs is the BGN equivalence of 400 000 EUR. For projects related to energy production from non renewable sources, the maximum amount of the eligible costs is the BGN equivalence of 1 000 000 EUR.

Measure 311 „Diversification toward non agricultural activities“

This financial help is provided in order to stimulate the development of non agricultural activities including the electricity production from RES. The purchase of tangible and non tangible assets and this of licenses are also financed. The amount of the planned investment could vary between 5 000 and 1 000 000 EUR. The granted financial help could reach 70% from the amount of the total investment, but could not exceed 200 000 ЕUR.

Measure 321 „Main services for the population and economy in the rural regions“

Financed activities include: design or rehabilitation and equipment of installations/capacities for production of heat and/or facilities providing different public services using renewable energy sources, development of distribution network for bio fuels or heat/electricity produced by biomass or other renewable energy sources investments aiming at improvement of the energy efficiency of municipal or other facilities used for provision of public services. This financial support could be provided to municipalities in rural regions, juridical persons with non-economic purpose and community centers.

Operational Program Regional Development 2007-2013

The OP Regional development 2007-2013 provides financial help under the measure 2.3 “Access to sustainable and effective energy resources”. Activities which could be financed include development of parts of gas-distributing pipelines in the respective regions as part of the national gas-transporting network for the respective areas. Also development of installations, using renewable energy sources, and connections to the systems for delivery of renewable energy sources could be financed. The measure supports only investments in energy-distribution and will not support activities related to energy production. It will be focused on development of parts of gas-distributing pipelines in the selected areas and municipalities as part of the national gas-transporting network. The municipalities which are potential beneficiaries are municipalities without an issued license for gas-distributing network or ones that are not included in the regions with gas-distributing network. The financial resource for this operation is up to the amount of EUR 60 Mln (about EUR 51 Mln is European funding).

Operational Program Environment 2007-2013

The enterprise for management of the activities for environment prevention within the Ministry of Environment and Water provides funds, in the form of interest free loan
for building small Water Electric stations. The loan parameters are to the amount of 70% of the project total value. Within Priority axis 2 of the OP Environment in sector Waste Management, activities which will be funded include building of installations for utilization of the separate gas emissions (methane) from the depots for daily waste used in electric energy generation. Still actions in the axis promotion and development are forthcoming.

Operational Program Competitiveness

The OP Competitiveness ensures financing for RES related activities through measure 2.1. “Improvement of the technologies and management in the enterprises”. The priority of this measure is oriented towards funding of activities aiming at implementation of energy-saving technologies. The potential candidates could be enterprises or cooperation, registered according to the Trade Law or the Law for cooperation. The procedure for project’s submission is planned to be published during the third quarter of 2009. The maximum percentage of co-funding for micro and small enterprises is 70% of the total eligible costs for the project, for medium enterprises – 60% of the total eligible costs of the project and for big enterprises – 50% of the total eligible costs of the project. The maximum amount of the grant could reach 2.5 million BGN for small and medium enterprises and 5 million BGN for big enterprises. Another measure of OP Competitiveness related to the financing of RES activities is measure 2.3 “Support for implementation of energy-saving technologies and usage of renewable energy sources”. Activities aiming at the implementation of energy-saving technologies as well as these related to the usage of renewable energy sources from the enterprises will be supported.

Energy Efficiency Fund

Another option for financing RES related activities is using the financial resources of the “Energy Efficiency Fund” (FEE). FEE finances investment projects for energy efficiency and supports the development of market for projects for energy efficiency in Bulgaria. FEE has the functions of funding institution providing credits and credit guarantees, as well as a consultation center. FEE assists the Bulgarian companies, municipal and private persons in preparation of investment projects for energy efficiency. The fund provides financing, co-financing or guaranty in front of other financial institutions. Main principle in the management of FEE is the public-private partnership. The fund follows orders and rules, developed by the technical assistance, provided by the World Bank and approved by the Bulgarian Government.
Bulgarian Energy Efficiency and Renewable Energy Credit Line

The Bulgarian energy efficiency and renewable energy credit line was established in the country in mid 2004 with main goal to support energy efficiency and renewable projects through European Bank for Reconstruction and Development funds. The credit line provides grant support in the form of a completion fee to sub borrowers up to15% for energy efficiency projects and up to 20% for renewable energy projects until 30 September 2009 and up to 15% after October 1 2009. EBRD agreed additional EUR 55 Mln funding till June 2011. The grant funds also provide free technical assistance (energy auditing, financial analysis, risk assessment, business plan, loan application). The credit line is established through local banks which on-land to the private industrial companies. Up till now Unicredit Bulbank and United Bulgarian Bank agreed for the extension of the credit line. Project sponsors receive an incentive grant upon project completion (validated by independent energy expert). Under the credit line framework any sub-borrower will be eligible to borrow up to a maximum EUR 2.5 Mln. By March 2009 the company 150 projects were co-funded with the total amount of EUR 81.5 Mln. Eligible renewable energy sub projects include:
• Investments in new hydro power or run-of-the-river with installed capacity less than 10 MW(investments in second hand hydro power or rehabilitation of existing sites are not eligible);
• Investment in new and second hand wind turbines with installed capacity of less than 5 MW;
• Biomass investments with installed capacity of less than 5 MW electric output (for biomass heat only boilers with a thermal input higher than 10MWth, the EBRD will confirm eligibility based on an outline of the investment prepared and submitted by the REUP Consultant outlining the origin of fuel supply and establishing if an Environmental Impact Assessment is needed for the project);
• Solar
• Geothermal
• Biogas

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