Minister Julian Popov and Deputy Minister Angelina Boneva: End of public financing with 100% state and European funds. And now where?

Raya Lecheva 

The time for renovating buildings entirely at the expense of the state budget is over. It is no longer possible to rehabilitate cooperatives with only European funding, and the support of households is also needed. And people need to know that. This was the main debate that was discussed today at a working breakfast in which the media, the state and business organizations participated.

In 20 years, we have renovated only 5.4% of multi-family housing

The time for renovating buildings entirely at the expense of the state budget is over. It is no longer possible to rehabilitate cooperatives with only European funding, and the support of households is also needed. And people need to know that. This was the main debate that was discussed today at a working breakfast in which the media, the state and business organizations participated.The time for renovating buildings entirely at the expense of the state budget is over. It is no longer possible to rehabilitate cooperatives with only European funding, and the support of households is also needed. And people need to know that. This was the main debate that was discussed today at a working breakfast in which the media, the state and business organizations participated.The time for renovating buildings entirely at the expense of the state budget is over. It is no longer possible to rehabilitate cooperatives with only European funding, and the support of households is also needed. And people need to know that. This was the main debate that was discussed today at a working breakfast in which the media, the state and business organizations participated.In 20 years, we have renovated only 5.4% of multi-family housing

In 20 years, we have renovated only 5.4% of the need to renew about 66,000 multi-family residential buildings and another 1.3 million single-family residential buildings. This was explained today by Dragomir Tsanev, executive director of the Center for Energy Efficiency EnEfect. Public funds cannot reach everyone without attracting additional investment, Tsanev added. This can be done by the owners themselves, private ESCO companies who can lend funds and profit from the savings afterwards. Financing can also be sought from commercial banks, the Bulgarian Development Bank and other funds. Political will and clarity are needed, people and businesses need to know what follows after using the Recovery Plan funds. It is important to have technical support on the ground, but it is also important to have mechanisms for monitoring the results and to guarantee quality, Dragomir Tsanev also emphasized.

The Minister of Environment and Water, Julian Popov, also spoke about the end of the 100 percent grant. On the part of the state, it is necessary to make a very big effort, to develop a working system, reasonable and also fair, in order to be able to convince people that there is no other option. It is high time we understand that our home is an asset that the state should not pay for. It is a misconception to get money from the state to renovate your home. After that, the benefits are entirely for the homeowner, and they are related to an increase in its price, savings on energy costs, cleaner air and a better environment and appearance of cities.

Partial rehabilitation in Bulgaria should be prohibited

In this regard, the minister stressed that municipalities should prohibit partial rehabilitation. This is an outrage that has cost Bulgaria billions and is functionally a total outrage, there is no such thing in Ukraine, Georgia or Europe, explained Minister Popov.

Because of the elections, this issue is not being commented on at the moment, but I will not stop repeating it even after the elections, he added. When asked by 3eNews about the municipalities and their functions, the minister emphasized that the lack of decentralization is another important problem. But even now piecemeal remediation is partially prohibited, the question is how much the administration makes efforts and controls the process. Savings from energy costs can be turned into capital and the social benefits of remediation can be assessed, according to Minister Popov. He also commented on the measure from the "Environment" program to allocate funds for the replacement of stoves, which is still difficult to manage by the municipalities. The reason is again a lack of capacity, but there are also administrative procedures. The minister admitted that the procedure is really complicated, which delays the process and in many municipalities, because of public procurement, the replacement is delayed by more than a year, but he assured that he will slowly start work in this direction as well.

It is necessary to talk about renovation step by step and by replacing the heating device, to replace the windows, to make insulation, for example. That is why Dragomir Tsanev emphasized that the two programs for energy efficiency and for replacing heating appliances can work much better together.

Grant funding should be reduced to 20-25%

We should reach only a 20% grant, and private investments from owners and funds should be 80%, added the eco-minister. It is important for Bulgaria to set national goals, but this is to be done in the Integrated Plan in the field of climate and energy. However, it is clear that the institutions are not talking to each other and it is currently in the hands of the Ministry of Energy and, despite discussions in separate committees, it is not yet publicly available. The INPEC plan itself needs to be updated and sent to Brussels. According to the plan, this was supposed to happen in June this year, but the debates are still ongoing.

There is funding and there will be enough tools, assured Deputy Minister Angelina Boneva

The most important thing I want to share is that there is funding, there will be enough financial instruments, said the Deputy Minister of Regional Development and Public Works Angelina Boneva, who also joined the discussion. We currently have a lot of work in progress to evaluate the renovation projects that have already come in for both multi-family and single-family housing that are already being evaluated in the MRDPW, she said. The financial tools and sources that people can use are also expected to be introduced soon.

Of the 3,068 projects submitted, about 600-700 will receive funding, because there are still finished projects from the first stage of the program. Their financing is 100 percent. They have paid and prepared technical passports and energy efficiency surveys and are practically ready to join the second stage of the program. Up to 300 more buildings will receive support under the Second Stage, where the grant is already 80% co-financing. After that, we will have another 2,000 buildings with ready-made project proposals, and if we present financing opportunities very quickly, they can also be renovated. According to Boneva, a large part of the owners of these homes will be able to afford to co-finance these investments in energy efficiency.

Vouchers for the energy poor who can't afford renovations

However, it is about a total of about BGN 70 million that the owners have to find, which is not an extremely large amount and is completely realistic, said Boneva. But it should be clear now that the co-financing will decrease and reach 20-25% of the total amount, the Deputy Minister emphasized. The question of helping people in condominiums who cannot afford to rehabilitate the block is very important. We are about to issue vouchers for them, with which we will support them, Boneva also assured.

After the financing under the Recovery Plan comes the role of the National Decarbonization Fund, the structuring of which is also delayed and it will not be operational in February, Boneva emphasized. There, the delay in the processes is about eight months, as well as the implementation of the entire Recovery Plan. Unfortunately, reforms that affect the whole society and a number of other ministries are concentrated as a solution in the Ministry of Energy, which is silent for now.