Irena Pencheva, NTEF to 3eNews: More and more municipalities are realizing the need to introduce energy management

Raya Lecheva

We are talking to Irena Pencheva, director of the National Trust Ecofund (NTEF). 20 out of 25 years of Irena Pencheva's work experience is related to various levels of management of public funds intended for the implementation of Programs and implementation of projects financed both by the EU budget and the national budget. For 10 years, he worked at DF "Agriculture", which since 2006 has been a Paying Agency from the level of expert to Head of Department related to management, organization and coordination of the overall process of organizing reception, evaluation and negotiation of projects financed under SAPARD and Rural Development Program 2007-2013.

In the next 2 years, he became the deputy executive director of the Executive Agency for Fisheries and Aquaculture IARA with the department of implementation of the Operational Program for the Development of the "Fisheries" Sector (2007-2013).

Since 2015, he has been working as the administrative director of BULEKOPAK AD and his main activity is related to organization, management and control over the overall practice of the organization in the field of controlling the compliance of the company's activities with environmental legislation.

At the beginning of 2018, he held the position of Director of the Executive Bureau of NTEF, being responsible for the overall organization, management and control of the Fund's activities.

Mrs. Pencheva, National Trust Ecofund (NTEF) had an open procedure for Energy Efficiency in schools and kindergartens, how many submitted projects and from which municipalities?

During the announced call for recruitment of application forms under the sub-program "Energy efficiency of municipal schools and kindergartens" under the Climate Investment Program (CIP), 13 project proposals were submitted.

Applicants had four months to apply, and admissions closed at the end of June. If they meet the requirements of the Program after completion of all administrative checks, 8 kindergartens, 4 primary schools and one vocational high school will receive funding. The municipalities that prepared and submitted their project proposals are Momchilgrad, Bratya Daskalovi, Elin Pelin, Knezha, Gorna Oryahovitsa, Ruse, Svishtov, Varna, Karlovo, Burgas, Cherven Bryag, Zlatitsa and Gotse Delchev.

The total amount of grants for all approved projects is BGN 6.3 million. How many municipalities will be able to receive support?

Yes, that's right, we are talking about financing projects for the introduction of a package of energy-saving measures, which leads to reaching the legally defined minimum or higher class of energy consumption for the respective type of building. This is happening with the financial means and according to the Agreement concluded in the last quarter of 2022 for the sale of annual emissions allocations (AEAs) between the Republic of Bulgaria and the Federal Republic of Germany.

Energy efficiency in schools and kindergartens in our country occurs through the sale of emissions

NTEF provides grant-in-aid for partial financing for the implementation of energy-saving measures up to 70% of the actually incurred eligible costs, but not more than BGN 420,000. In this sense, if it is assumed under conditions that all projects apply for the maximum allowable grant, the minimum number of projects that can be financed is 15. One beneficiary, as we call the applicants, can submit only one project proposal. Thus, the minimum number of municipalities that can receive support is also 15. This is also the indicative number of projects specified in the Agreement for the sale of an annual allocated amount of emissions that we can support.

When will you announce the results and what is impressing at the moment?

The term for completion of all administrative checks by NTEF is up to three months from the final date of completion of the admission 30.06.2023. At the moment, all projects have passed the administrative check of the submitted documents and requested data, and letters were also sent for all of them to remove the irregularities and ambiguities found by the NTEF team in the submitted documents.

For 8 of them, a site visit was also carried out to establish the actual compliance. 6 projects are completely ready for submission to the committee, while the others are subject to the deadline for submission of additional documents and explanations by the applicants for financial assistance within the time limit set by the rules. The projects managed by NTEF have their own important specifics. First, the technical compliance of the documents is checked by the team of the Executive Bureau of NTEF. The final decision on approval/rejection of project proposals rests with an independent Commission for Selection, Evaluation and Control of Projects.

Most of the project proposals are for small to medium-sized sites with a built-up area

What is striking at the moment is that most of the project proposals are for small to medium-sized sites with a built-up area. In addition, most of the forms were applied without a prepared investment project. This means that the potential beneficiaries have farsightedly planned to spend funds on its construction only after receiving a positive opinion and approval of their projects. The other interesting fact is related to the types of investments applied for. More and more municipalities are aware of their responsibility regarding the reasonable management of their energy costs, and in this regard, in over 80% of the projects received under this Program, in the selected package of energy efficiency measures, a measure for the introduction of an energy management system is foreseen. In about half of the projects, the implementation of measures for the installation of photovoltaic systems with an installed capacity suitable for the building's power is also included.

Do you think they will be able to meet the requirement of 35,100 tonnes of emissions saved over the life of all approved projects over 30 years and what does that mean per site per year?

These parameters are specified in the Agreement for the sale of annual allocated amount of emissions, which I mentioned above. The funds from the sale of these emissions are intended to finance a sub-program within the Climate Investment Program. It aims to reduce greenhouse gas emissions in the construction sector. Only energy efficiency and energy saving measures in municipal schools and kindergartens are eligible for financing.

The savings to be achieved are 1170 tonnes of CO2/year or 35,100 tonnes over the life of all approved designs of 30 years

It is very important that the sub-program stimulates the introduction of an appropriate behavioral model among users, which will enhance the effect of the applied measures, which is laid down as a specific requirement in the Agreement.

Its main goal is for students, teachers and the administration of Bulgarian schools and kindergartens to shape saving behavior by taking care of the reasonable and economical use of energy in their school and kindergarten. On average, for a minimum of 15 projects to be financed, according to the will of the buyer under the Agreement, the Republic of Germany must guarantee the achievement of 1170 tons of CO2 savings per year.

This means that each project follows to bring savings of at least 78 tons of CO2/year.

Thus, one of the main criteria by which project proposals are prioritized is precisely the amount of savings. They are guaranteed by the application of minimally quantified energy efficiency measures defined as mandatory in EE surveys. As ineligible for financing under the rules of the sub-program is 60 tons, which is below the average for a site. But it is assumed that projects will come in whose higher savings rates will compensate for this deviation.

Are the criteria expected to change in this regard if they are difficult to meet?

Such are our commitments for the quantities of emissions saved and they are specifically defined in the Agreement and should necessarily be achieved. In this sense, this criterion will not change.

What projects are under implementation and of what value under the Climate Investment Program - energy efficiency from a total of how many applicants?

The Climate Investment Program (CIP) is the largest program administered by NTEF. Unfortunately, since 2017, no more additional funds have been provided for financing projects under it, and at the moment we are working with residual funds under the two decisions of the Council of Ministers and with the transfer of funds received from the sale of the so-called "aviation allowances". At the moment, only 10 projects under the Energy Efficiency Scheme and 75 projects under the Scheme to promote the use of electric vehicles are being implemented.

The implemented projects under the Energy Efficiency Scheme are currently related to the introduction of measures in several schools, hospitals, community center and municipal administration.

Is it a problem to find 15% co-financing and from where do municipalities usually use this?

Ensuring the co-financing from the individual beneficiaries, which in some cases exceeds the percentage indicated by you, is a process in which NTEF is not directly involved. But from what has been shared with us, we are aware that it presents some difficulty. From the review of the documents that are deposited with us, we see a different practice. Some co-finance the implementation of their projects through their own funds from their budget, others use borrowed funds - banks, FEEVI, FLAG Fund, and we have also financed a project that was implemented with a financial instrument, the so-called ESCO contract.

Are there any requirements for proper performance, what?

All programs that NTEF administers have detailed publicly available rules that are related to the implementation of the approved projects. These rules are as relaxed as possible, as part of the necessary information is filled in and collected by the NTEF team.

We have the possibility to execute the projects in parallel with our candidates, as we are flexible and provide direct assistance in the implementation of their projects.

For example, NTEF's legal team has developed sample PPA tender procedures that we provide to our applicants in order to both ease project implementation on their part and minimize possible gaps in implementation. Our engineers look for possible solutions for every problem that arises, and even at the level of investment project approval, they give their recommendations in order to minimize the risks of errors. Our finance department provides full assistance in the preparation of reporting forms and documents. In general, we try to help as much as possible without breaking our own rules of course.