Towards a climate neutral EU:
efficient allocation of EU funds

An RRP project-to-monitor: Support for sustainable energy renovation of non-residential buildings

Organisation: Economic Policy Institute Website: Added: September 20, 2022
Project start date: April 01, 2022
Project end date: June 30, 2026


According to data from the Long-term National Strategy to Support the Renewal of the National Building Stock of Residential and Non-Residential Buildings by 2050, certified buildings for administrative services account for over 20%. The analysis shows that 52.2% of the existing administrative buildings were built and commissioned in the period 1959 - 1977, i.e. their design was carried out according to the oldest building and technical standards from 1959, and the remaining 32% of the buildings were designed and constructed according to standards from 1974 to 1986. The review and analysis show that within the framework of the projects implemented and under implementation under Operational Programme Regional Development 2007-2013 and Operational Programme Regions in Growth 2014-2020 only 1.7% sq. m. of the renovation needs of administrative buildings and only 2.1% sq. m. of the renovation needs of cultural infrastructure buildings have been covered. Accordingly, one of the Recovery and Resilience Plan’s projects, namely ‘Support for sustainable energy renovation of non-residential buildings’, focuses on the sustainable energy renovation of non-residential buildings, and will cover the following types of buildings: Municipalities and competent national authorities (regional administrations, ministries); The Bulgarian Academy of Sciences; Public-private partnerships for buildings in the field of production, trade and services; Non-profit legal entities, municipal enterprises, commercial companies, etc.

The sustainable energy renovation of these buildings is funded under two project Components, as exemplified below. The objectives of the project ‘Support for sustainable energy renovation of non-residential buildings’ under the Recovery and Resilience Plan are:

- To establish a sustainable model of implemented energy efficiency measures, closely aligned to the Green Deal criteria through the implementation of high-performance measures leading to near zero energy consumption;

- To transform the construction industry into a sustainable one;

- To introduce Green Public Procurement (GPP) in the implementation of EE measures as a key tool to achieve sustainable practices and use environmental criteria in the procurement process. The introduction of green criteria in public procurement is a well-established means to reduce the negative environmental impact of public consumption and to stimulate the use, supply and development of more environmentally friendly goods and services with a higher "societal value". By selecting goods and services that are environmentally friendly and make rational and responsible use of natural resources, the implementation of the project will contribute to achieving sustainable and environmentally friendly production and consumption and increasing the resource efficiency of the economy.

- To create a sustainable model for the financial provision of energy efficiency measures in their comprehensiveness, by defining, creating, situating and structuring a Single National Decarbonisation Fund as the main financial scheme to support the Bulgarian strategy for the long-term renovation of the building stock in the country, thus creating a sustainable model of long-term financial provision, by applying and using different revenue sources and return on investment over a period of 5 to 15 years. The decarbonisation fund created will be able to finance energy efficiency measures beyond the end of the project, with the expectation that around 60% of residential buildings and 50% of all buildings in the country will be renovated by 2050.

- To achieve 30% primary energy savings for each site in the non-domestic building stock. Investments in the non-domestic building stock are tracked at 100% to support climate change targets;

- To improve the energy performance of the national non-residential building stock through the implementation of sustainable integrated high-performance energy measures;

- To achieve energy performance class "A" and exceptionally class "B" after implementing energy-saving measures in public buildings;

- To reduce energy consumption costs, which will also lead to savings of public resources;

- To improve the conditions in the premises for the provision of services and for work.

It is, however, important to note that, according to the implementation schedule of the National Recovery and Resilience Plan, 70% of the financial resource should be contracted by the end of 2022, and 100% by the end of 2023, and should be implemented and reported to the EC by 2026, respectively. Therefore, as stated below in the recommendations, the deadlines can present a risk in front of the timely planned implementation of the project under the Recovery and Resilience Plan. More specifically, this project sets the following deadlines by component for contracting beneficiaries and procurement: 1. Component 1 (covering public buildings) - 2022-2023 for contracting, and 2022-2024 for procurement by final beneficiaries. 2. Component 2 (covering manufacturing, commercial and service buildings) - 2022-2023 for contracting, and 2022-2024 procurement by final beneficiaries.

Good practices and Innovations

Expectations related to the implementation of the project are that after the application of energy efficiency (EE) measures by 2026 what will be achieved is 379 GWh / year reduction in annual primary energy consumption as a result of energy saving measures and a reduction in greenhouse gas emissions (CO2) by 208 ktoe. In addition, the project covers functionally different non-residential buildings. Component 1 of the project provides funding for measures for sustainable energy renovation of state and municipal buildings, including buildings for administrative services, buildings for public services in the field of culture and art, and buildings dedicated to sporting activities, as well as buildings owned by the Bulgarian Academy of Sciences. Whereas Component 2 provides funding for sustainable energy efficient renovation of buildings in manufacturing, trade, and services. The implementation period is 51 months (2022-2026) for both Component 1 and 2. Component 1 is planned to cover 616 buildings in total, representing 1 426 837 sq. m., whereas Component 2 is planned to cover 250 buildings in total, representing 570 371 sq.m.

Financial data

The indicative financial resources under the project are in the amount of BGN 617 656 233,00 (excluding VAT) of 100% European funding under the Recovery and Resilience Mechanism (315 802 617. 31 EUR). The financial resource will be indicatively allocated as follows: For buildings under Component 1 - BGN 370 345 508,00 without VAT, or 59,96% of the funding. For buildings under Component 2 - BGN 235 200 000,00 without VAT, or 38,08% of the funding. The outstanding funding is allocated for publicity and visibility measures.


Recommendations Since the project is yet to be started, its success could be jeopardized by the combination of accumulated delays (already registered in September 2022 in comparison to the initial schedule) and short periods for implementation of the ambitious objectives, set out in the project background information. Another potential bottleneck might be insufficient administrative capacity on national but mainly on regional/local capacity to handle such large-scale projects. Therefore, a more flexible approach, setting cross-institutional task forces and active outreach to stakeholders are recommended. A potential risk to hinder the implementation in its initial scope and coverage might occur due to the rising inflation and more precisely because of the hike in construction material prices and labour costs. Therefore, appropriate solutions are to be accordingly addressed before the start of the project.

Information sources

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.