Towards a climate neutral EU:
efficient allocation of EU funds


Organisation: Economic Policy Institute Website: Added: September 16, 2022
Project start date: January 01, 2022
Project end date: June 30, 2022


In the context of the EU’s transition towards a green economy, as one of the central themes of the EU, the Recovery and Resilience Plan focuses on decarbonisation and climate neutrality of cities. Buildings in the European Union account for 40% of energy use and 36% of carbon emissions. To achieve the Commission's proposed target (September 2020) of reducing emissions by at least 55% by 2030, the European Union must reduce greenhouse gas emissions from buildings by 60%, energy consumption by 14% and heating and cooling energy consumption by 18%. Over 97% of Bulgaria's residential building stock is privately owned by individuals, and the programmes implemented so far have focused mainly on multi-family residential buildings, which, given the nature of ownership in the country, are managed through a condominium regime. By providing support to multi-family apartment buildings, many homeowners, including persons from socially vulnerable groups, will fall under the scope of the project.

Specific objectives of the project are:

- improving the energy performance of the national building stock of residential buildings through the implementation of integrated energy efficiency measures;

- achieving an energy performance class of at least B after implementing energy-saving measures in residential buildings;

- incentivising a minimum of 30% primary energy savings for renovated residential buildings;

- resource efficiency, economic viability, decarbonisation through RES, sustainable construction process;

- reducing energy poverty by reducing energy costs;

- improving the living conditions and quality of life of the country's population through technological renovation and modernisation of the building stock.

Other project objectives include: The creation of new jobs and stimulation of economic growth. The project aims to create new local jobs, stimulate investment in the regions, improve the condition of the building stock and support small and medium-sized enterprises. Create momentum in the construction sector which will create new jobs and support supply networks locally and nationally. The provision of support to the green transition. The project aims to improve the energy efficiency of residential buildings by transforming them into buildings with a minimum energy performance class of B and achieving a minimum of 30% primary energy savings. At the same time, it aims at decarbonisation and integration of renewable energy sources, efficient use of resources, and achievement of environmental standards. The ensurance of social stability. By providing financial support for the renovation of existing housing stock, the project will assist low-income owners of detached units in multi-family residential buildings.

Good Practices and Innovations

The scope of the project recognises that currently only 7% of the area of occupied residential buildings (those built after 2010 and those renovated) complies with modern energy efficiency (EE) requirements. The focus will be on multi-family residential buildings nationwide in the remaining 93%, with incentives to renovate residential buildings to achieve 30% primary energy savings for renovated residential buildings. The scope of the project has been chosen in line with the objectives of the Long Term National Strategy to support the renovation of the national building stock of residential and non-residential buildings up to 2050, developed under EU Directive 844/2018, following a higher BFP approach to delivering higher outcomes. Besides, the EE project in the building stock will comply with the 'do no significant harm'/DNSH principle and ensure effective implementation of this principle as far as possible, taking into account the Taxonomy Regulation. The project is also planned to mark the beginning of the transformation of the construction industry into a sustainable one. In addition to the direct environmental benefits, the implementation of the project will have a positive impact on economic growth in the Republic of Bulgaria, innovation, competitiveness, as well as dependence on energy imports, creation of new jobs, contribution to the reduction of energy poverty and improvement of public health.

Financial data

Indicative financial resource: Investment: BGN 1 176 960 000,00 Project organization and management, publicity and visibility measures: BGN 12 543 129,00. TOTAL Recovery and Resilience Facility funds: BGN 1 189 503 129,00 (608 183 292. 54 EUR).


As potential obstacles to the renovation of buildings with EU funds under the RRP can be pointed out the short deadlines, insufficient administrative capacity, and especially some mistakes pertaining to the implementation of previous programs for building renovation with public funds, including the numerous reports of poor quality construction works, lack of monitoring in the selection of subcontractors and so on. Additionally, practice from the implementation of similar projects in the past shows that projects that are fully funded and administered by public authorities lack sufficient monitoring by the beneficiaries. In order to avoid this scenario, the current project aims at transforming the existing model of providing 100% grants to homeowners but does not disclose any details on how this is going to be achieved. Therefore, the project has prospects to be successful provided that a new formula for public-private partnership is implemented and dully communicated.

Information sources B0-%D0%9F%D0%BE%D0%B4%D0%BA%D1%80%D0%B5%D0%BF%D0%B0-%D0%B7%D0%B0-%D1%83%D1%81%D1%82%D0%BE%D0%B9%D1%87%D0%B8%D0%B2%D0%BE-%D0%B5%D0%BD%D0%B5%D1%80%D0%B3%D0%B8%D0%B9%D0%BD%D0%BE-%D0%BE%D0%B1%D0%BD%D0%BE%D0%B2%D1%8F%D0%B2%D0%B0%D0%BD%D0%B5-%D0%BD%D0%B0-%D0%B6%D0%B8%D0%BB%D0%B8%D1%89%D0%BD%D0%B8%D1%8F-%D1%81%D0%B3%D1%80%D0%B0%D0%B4%D0%B5%D0%BD-%D1%84%D0%BE%D0%BD%D0%B4.pptx-1.pdf

Other info

European Climate Initiative (EUKI)
This project is part of the European Climate Initiative (EUKI). EUKI is a project financing instrument by the German Federal Ministry for Economic Affairs and Climate Action (BMWK). The EUKI competition for project ideas is implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH. It is the overarching goal of the EUKI to foster climate cooperation within the European Union (EU) in order to mitigate greenhouse gas emissions.