Bulgaria receives an energy stimulus with an agreement between the EIB and NEC for new hydroelectric plants

The EIB will help the Bulgarian national electricity company NEC to prepare for the construction of two large pumped-storage hydroelectric power plants, which are extremely important for securing the necessary energy supplies for the country and the EU.

The two projects with the participation of the EIB advisory services strengthen the stability of the electricity transmission network and enable the connection of more renewable energy sources.

The European Investment Bank (EIB) will provide consulting assistance to the National Electric Company EAD (NEC), the national electric company of Bulgaria, in the preparation for the construction of two large pumped-storage hydroelectric power plants in the southwestern part of the country.

Each of these two new renewable energy sources, named Batak and Dospat, will provide additional generation capacity of around 800 megawatts (MW) and increase storage capacity, thereby strengthening electricity supplies in Bulgaria and the European Union.

Under the agreement signed today, the EIB Advisory Service - as the main partner of the InvestEU Advisory Center of the European Commission - will study the technical suitability and economic viability of the two projects, as well as assess their advantages and risks. This will allow NEC to make informed decisions essential for the development of both projects.

"The EIB supports the development of strategic sustainable investment projects in the energy sector both in the EU and outside of it," said EIB Vice President Kyriakos Kakouris. "We are pleased to provide the bank's expertise to assess the feasibility and viability of the two projects, which can have a serious positive impact on Bulgaria's energy mix and increase the stability of its electricity transmission network, while strengthening the overall infrastructure of the European energy network".

A pumped-storage hydroelectric plant (PSHP) can not only generate hydroelectric power, but also store it and then feed it into the grid when needed, like a huge battery.

"The partnership between the EIB and the Ministry of Energy is of key importance for the implementation of projects that will contribute to the achievement of the energy transition. Among them is the development of pumped-storage hydroelectric power plants, which could become the largest energy storage batteries in the region," said Acting Minister of Energy Vladimir Malinov. "With the implementation of such projects, our energy security will be improved, Bulgaria's energy infrastructure will be improved and we will achieve the decarbonization goals. We are grateful for the EIB's expertise and support for this extremely important project."

The Executive Director of NEC Eng. Martin Georgiev added that "the agreement signed today between NEC and the European Investment Bank marks an important step not only for the development of the PSHP Batak and PSHP Dospat projects, but also to guarantee security of supply in the Bulgarian electricity system and for achieving the country's decarbonisation goals. The agreement is essential to unlock the potential and contribution of hydropower to the energy transition. The benefits and social significance of investing in such sustainable infrastructure are undeniable and we are privileged to have the expert support of the EIB and the European institutions involved in the process."

The advisory support for NEC confirms the EIB's commitment to a sustainable environmental and energy transformation across the EU.

A significant contribution to the energy stability and security of electricity supply in Bulgaria and the European Union

The two new renewable energy sources, which will use existing hydroelectric cascading dams and reservoirs in the area around the cities of Batak and Dospat in southwestern Bulgaria, are expected to act as large storage batteries storing green energy. This will provide NEC with flexible 24-hour and weekly management, rapid replacement of capacities in emergency situations and additional balancing services. The power plants, whose value is estimated at around 900 million euros each, are expected to be operational by 2032.

The two projects are part of the 10-year network development plan (TYNDP) until 2024 of the European Network of Transmission System Operators for Electricity (ENTSO-E).

The European Investment Bank (EIB) is the long-term lending institution of the European Union and is owned by the member states. It finances sound investments that contribute to the achievement of EU policy objectives. EIB projects strengthen competitiveness, stimulate innovation, promote sustainable development, strengthen social and territorial cohesion and support a fair and rapid transition to climate neutrality. In 2023, the EIB Group, which consists of the EIB and the European Investment Fund (EIF), reported signed financial commitments in Bulgaria worth EUR 1.11 billion – more than double the EUR 494 million in 2022. Overall, The EIB Group has signed contracts worth a total of EUR 88 billion of new funds in 2023.

The InvestEU program provides the European Union with long-term financing by leveraging significant public and private funds to support sustainable recovery. It also helps to attract private investment in the implementation of the European Union's strategic priorities such as the European Green Deal and the digital transition. InvestEU combines all EU financial instruments previously available to support investments in the European Union, thus making the financing of investment projects in Europe simpler, more efficient and more flexible. The program consists of three parts: the InvestEU Fund, the InvestEU Advisory Center and the InvestEU Portal.

Within the framework of InvestEU, the EIB is the main consultant of the European Commission, providing consulting services to project organizers.

National Electric Company EAD (NEC EAD) is a subsidiary of the Bulgarian Energy Holding EAD, whose principal is the Ministry of Energy of Bulgaria. Established at the end of 1991, the company has strengthened its positions in the Bulgarian energy and economy. The main task of NEC is to provide safe, efficient and continuous electricity supply. The company manages 31 hydroelectric power plants and pumped storage hydroelectric power plants with a total installed production capacity of 2739 MW in generator mode and 932 MW in pumping mode. In addition, NEC EAD manages some of the largest dams and hydropower facilities in the country. The total capacity of the dams operated by NEC EAD represents 55% of the regulated volume of water resources in Bulgaria.