A large-scale EIB program could cover the municipalities' co-financing of 20% under the next measure of the recovery program

Raya Lecheva

Large-scale ELENA program of the European Investment Bank will support minimum investments of up to 30 million euros in renewable energy, energy efficiency and electric mobility. The aim is to support large investment projects and to promote consolidation, cooperation between municipalities and entire regions for the development of integrated ideas and plans. This was explained by Asen Gaštarov from the European Investment Bank at the national conference on zero-energy buildings of the Center for Energy Efficiency EnEfect in Burgas.

In Europe, around 27 million euros per year are needed to achieve energy efficiency targets and to phase in the renovation of the building stock, of which 75% of all buildings are inefficient. From 1% per year to 2% per year, the renovation of buildings should increase, according to data from the European Investment Bank. In Bulgaria, over 80% are energy inefficient buildings, and the need for funds is huge. The last measure, which ended with a budget of BGN 1 billion, with submitted projects for over BGN 5 billion, the shortage of funds is BGN 3-4 billion, and people can invest their own capital to some extent, commented Gashtarov.

Therefore, Europe's banking institutions are creating guarantee schemes to be able to support investments in energy efficiency and renewable energy sources in cities. Thus, the 5 billion euros available can attract additional private investments from companies and banks up to over 50 billion euros, the EIB expert explained. In fact, the best approach is the unification between the municipalities, and Gastarov even pointed out that in small Bulgaria even half of the municipalities in the country could be united. For example, in Italy, 44 municipalities are coming together to modernize their lighting. However, there are no such projects in Bulgaria.

The EIB's program includes three key areas. First of all, renovation of buildings (public and private), renewable sources in buildings, including solar and biomass boilers, cooling, innovative heating systems. Next are investments for renovation in single-family buildings (public and private), integrated introduction of renewable sources, including solar boilers, biomass boilers, heat pumps and use of geothermal sources for heating. Thirdly, it is about innovative public transport and the promotion of electromobility. These three investment programs can also be combined, Gaštarov emphasized.

The minimum investment must be EUR 30 million

The ELENA program does not have open procedures and competitive selection, it is always open, Gastharov explained. The minimum investment of local authorities and private companies must be a minimum of 30 million euros, while for urban transport, energy renewal or heating networks, investments may exceed 150-200 million euros. The investment can be less than EUR 30 million in very rare cases, the bank has made an exception only twice, Gastharov also said. In order to carry out such a large-scale investment, in return the EIB offers technical assistance, it must be proportional to the investment. The technical assistance will be tailored to the needs, he assured, and the goal is for the applicants to complete their projects. However, the deadline for the implementation of such large-scale investments is three years. ELENA finances up to 90% of the necessary investments for project preparation. If the project is not implemented, there may be a return of funds, but we are talking about the unfulfilled measures of the project, said Gashtarov and assured that the goal is to implement the projects to the maximum extent.

The term of implementation is three years

Beneficiary of ELENA can be almost any type of organization can receive a grant, it is important to have a good project, to have an established activity. The technical assistance from the municipality can be a share of the salaries of the municipal workers who work on the project. This can also be a percentage for the municipality to cover. It became clear after questions from representatives of the local authorities, i.e., 10% co-financing can be part of municipal workers' salaries. Unlike other financial institutions, there is no constant control and monitoring of daily performance.

Another very important point for the municipalities is that the program can take 20% co-financing in the next stage of the rehabilitation program that has started. From now on, it will not be possible for European programs to carry out complete rehabilitation without the need to pay owners and municipalities. This ELENA program is an exceptional opportunity for the municipality to find the necessary 20% co-financing. The program may be good at finding other sources of funding for the main investment, but could provide up to 90% of the co-financing needed for it.

The program is looking for its first project in Bulgaria

Currently, under this large-scale EIB program, 150 projects have been implemented in Europe and grants for over 260 million euros have been provided. Only in Malta, Cyprus and Bulgaria are there no completed projects under the ELENA program and therefore she is looking for her first project in Bulgaria.

Implemented projects are, for example, a housing program in Poland, which finances the replacement of individual coal boilers with energy-efficient heating devices in 15 municipalities, the investment being 48 million euros, and the ELENA grant is 2.7 million euros. The program finances an integrated change in urban mobility, new electric municipal transport, infrastructure, improving the efficiency of transport, parks and provision of parking spaces, development of cycling infrastructure in Slovenia. The investment is for EUR 98 million, and the program provides EUR 2.39 million in grant aid. In France, the project of a regional company providing public services on a one-stop-shop basis and supporting the preparation of projects and energy surveys for the rehabilitation of single-family homes was financed. The investment is for nearly 40 million euros, and the technical assistance provided under ELENA is 1.8 million euros.

In fact, the financing that municipalities, private owners and organizations must provide is large-scale and it is somewhat logical that there is no project from Bulgaria. But in fact, it makes sense if the investment finds financing under the structural programs of the EU and other European funds and provides the co-financing and technical assistance that is so spectacular for the Bulgarian municipalities.