Nearly 24 billion euros will be available to the municipalities under the operational program and the Recovery Plan by the end of 2027

The main challenge remains the planning of the Fair Transition Fund, which is more than 1.2 billion euros

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Raya Lecheva

By the end of 2027, municipalities will be able to invest a huge European resource, which will be about 24 billion euros, both under the programs funded by European funds and the Recovery and Sustainability Plan. This became clear at a joint meeting of the standing committees on European funds of the National Association of Municipalities in Bulgaria (NAMRB), which was attended by over 224 representatives of 124 municipalities.

"The projects are living organisms and are not interested in the COVID crisis, and despite the elections, the work at the municipal level and the implementation of investments has not stopped," said NAMRB Executive Director Silvia Georgieva. As positive signals from the last days, she noted the return to normal rhythm of payments under the Operational Program "Regional Development" and the projects managed by the State Fund "Agriculture".

One of the most important challenges of the new programming period, which is already current, is the integrated way of absorbing the funds, as the preparation for it is significantly lagging behind, she commented. However, local authorities are active and two agreements have already been signed for the implementation of integrated territorial investments.

Only about BGN 7 billion, which will be invested by and with the participation of the municipalities under the Recovery and Sustainability Plan in an extremely short time.

By the end of the year, there may still be ready

territorial plans for Pernik, Kyustendil Stara Zagora

The main challenge remains the planning of the Fair Transition Fund (FAF), which is more than 1.2 billion euros. The funds are integrated in the "Regions in Rats" Program, which replaces the "Regional Development" Operational Program. They are identified in a separate priority axis 3. This creates a serious challenge for programming, because it finances a wide range of activities, including those in which the Managing Authority of the program does not have much experience from previous periods such as soft measures, training, etc., which are specific to programs financed by the European Social Fund.

On the other hand, in order to identify priority axis 3, it is necessary to prepare at least the initial versions of the Territorial Plans for a Fair Transition, which are being developed for the most affected areas. Currently, 3 districts in the country stand out, which will be supported as a priority under this mechanism: Pernik, Kyustendil and Stara Zagora. The Ministry of Energy is responsible for the elaboration of the Territorial Plans for Fair Transition. According to their assurances, they are currently in an active phase of preparation of the strategic documents, which gives grounds to believe that by the end of the year there is a chance to formulate a more detailed and priority axis 3.

Regional development strategies are awaiting environmental assessment

The other serious challenge for the preparation for the programming period 2021-2027 is the integrated territorial approach. The Integrated Strategies for Regional Development have not yet been finalized, and they are the main strategic document on the basis of which future investments will be financed.

The strategies are in the final phase of environmental assessment, which is carried out by the Ministry of Environment and Water (MoEW). It is expected that in the next 10 days opinions will be learned from the eco-department. According to the Regional Development Act (RDA), the next stage envisages the Integrated Regional Development Strategies to be submitted for approval by the Regional Development Councils (RDCs), after which they will be approved by a decision of the Council of Ministers. The realistic deadlines for this process to be completed is the beginning of 2022.

The integrated approach or the ITI approach in the RDP part is focused on the "Europe for Citizens" policy objective and allows for funding of different sectors. This enables potential beneficiaries to offer projects tailored to local specifics. It is important to note that for key sectors such as health, education, road infrastructure, culture, social activities, prior identification of future investments is required. This is a priority of the line ministries, which have the authority to define the respective policies, and it is expected that their mapping will be completed in the short term.

We are actively working on the legislative changes related to the implementation of the new programming period. Proposals for amendments to the Law on Management of European Funds (ZUSESIF) and the Law on Regional Development (RDA) are being prepared in order to describe in detail the procedures and steps for the implementation of the ITI instrument and the first phase – application with concepts, their verification and selection by the Regional Councils. The mechanism for management and coordination of the Program itself will in practice be clarified with the adoption of the normative acts.

The district centers will assist in consulting the integrated projects

The Managing Authority has included in the process the regional information centers (DICs), as they are expected to be a key partner both in the preparation of the ITI and in their implementation. Their staff are included in the PCD expert panels in the mediation units and will be involved in stakeholder coordination and communication at the local level.

Intensive negotiations are still underway with the European Commission on the Plan for Reconstruction and Sustainability of Bulgaria submitted by the government on October 15, 2021, commented the director of the Central Coordination Unit in the administration of the Council of Ministers Ivan Ivanov. So far, the issues surrounding the set key reforms have been discussed as a matter of priority. Now the talks go into the essence, in the details of the individual projects. The important clarification that Ivan Ivanov made is the clear understanding that the payments under the mechanism for recovery and sustainability, which finances the Plan, are not made “on documentary verification, but when achieving pre-set milestones. Serious reforms are set in the Plan, in short terms and in case of non-implementation, funds will not be reimbursed "- he specified. This makes the project management process much more complicated. An important factor in the process is the existence of political agreement on the reforms envisaged in the Plan.

Intense conversations begin

with the EC regarding the budgets of the projects of the Recovery Plan

Intensive talks with the EC on project budgets begin next week. The two key elements of the negotiations with the Commission are related to the measures envisaged by our country to achieve decarbonisation, ie. the closure of coal-fired power plants and the rule of law - judicial reform. The EC expects from our country more ambitious priorities for the decommissioning of coal-fired power plants. For the time being, Bulgaria is approaching the issue very carefully, both due to the lack of a regular government with a mandate to make long-term political decisions, and with a view to affecting our national security, of which our energy is a part. Our vision of what capacities will replace the decommissioned coal-fired power plants and how the balance in the energy mix will be guaranteed is still not clear enough.

The Recovery and Sustainability Plan (DIA) currently envisions expanding renewable energy production capacity and building a steam-generating plant, but the EC says more ambitious reforms are needed in the sector.

The other key issue in the negotiation process is the rule of law. A certain hardening of the tone on the part of Brussels is felt after the announcement of the list of persons under the Magnitsky Act. The EC sees insufficient activity in the implementation of measures related to the fight against corruption, the establishment of the rule of law and the functions of the Prosecutor General. Part of this package of requirements is directly related to regulatory changes, including the Constitution.

In the "expert package" of measures, our country is expected to have more ambitious plans regarding the reforms related to electric mobility. There are also some recommendations in the field of healthcare. There, the emphasis that Bulgaria places with the Plan is to shift the burden to prevention in order to reduce the pressure on the hospital system.

The good news is that there are no open issues with the measures set out in the Plan, which directly concern the municipalities.

A turning point in the negotiations with the Commission would be a possible desire of the future regular cabinet to make adjustments to the Plan. This would significantly complicate the negotiation process, the deadline for which is April 30, 2022. After this date, our country will irretrievably lose the opportunity to participate in the allocation of funds from the Mechanism for Recovery and Sustainability.

The projects themselves, funded by the IEP, will be implemented through UMIS. The vision at the moment is that the financial resource does not represent funds from shared management and therefore ZUSESIF will not be applied to the projects. The Ministry of Finance is working on detailed management rules, which are expected to be significantly simplified.

"The implementation period is short, but with good mobilization we can do it," said the director of the CCU directorate.

300 million less funds for the South-West Planning Region,

Sofia must be removed from the region

The negotiations on the Partnership Agreement for the period 2021-2027 are in the final stage. The two issues that have been commented on and consensus reached have been the request for a higher resource for the Southwest Planning Region (SWR), which is already in the category of those in transition, as well as the scope of areas to have access to funds from the FSP. At the suggestion of the EC, the funds for SWR are about 690 million euros.

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