Recovery and resilience plan for Bulgaria

Following an unprecedented crisis due to the pandemic, Bulgaria’s recovery and resilience plan responds to the urgent need of fostering a strong recovery and making Bulgaria future ready. The reforms and investments in the plan will help Bulgaria become more sustainable, resilient and better prepared for the challenges and opportunities of the green and digital transitions. To this end, the plan consists of 56 investments and 47 reforms. They will be supported by €6.27 billion in grants. 58.9% of the plan will support climate objectives and 25.8% of the plan will foster the digital transition.

The transformative impact of Bulgaria’s plan is the result of a strong combination of reforms and investments which address the specific challenges of Bulgaria. The reforms address bottlenecks to lasting and sustainable growth, while investments are targeted to address common European challenges by embracing the green and digital transitions, to strengthen economic and social resilience and the cohesion of the single market. In particular, Bulgaria’s plan will accelerate the decarbonisation of the energy sector, promote the large-scale deployment of digital infrastructure, including in rural areas, as well as support investments in improving the business environment, education and skills, research and innovation, social protection and healthcare. All reforms and investments have to be implemented within a tight time frame, as the Regulation on the Recovery and Resilience Facility foresees they have to be completed by August 2026.

The plan will foster economic growth and create jobs. It will lift Bulgaria’s gross domestic product by 1.9% to 3% by 2026. This boost to the economy will bring up to 36,000 citizens into jobs. Bulgaria will benefit significantly from the Recovery and Resilience Plans of other Member States, for instance through exports. These spill-over effects account for 0.6 percentage points of gross domestic product in 2026. This demonstrates the added value of joint and coordinated action at the European level.

When designing the plan, Bulgarian authorities consulted national and regional social partners and stakeholders, while pursuing a close dialogue with the Commission ahead of the formal submission of the plan on 15 October 2021. On 7 April 2022, the Commission gave its green light to the plan. On this occasion, President Von der Leyen symbolically transmitted the Commission’s assessment to Prime Minister Kiril Petkov during her visit in Sofia. The Plan was in turn adopted by the Council on 4 May 2022 opening the door to its implementation and financing.

Green transition

In the area of climate and environmental policies, Bulgaria faces challenges related to the decarbonisation of the power sector, fostering clean and efficient production and use of energy and resources, improving the energy efficiency of the building stock, making the transport sector more sustainable and ensuring the protection and restoration of ecosystems.

Key measures for the green transition

Bulgaria’s recovery and resilience plan supports the green transition through ambitious reforms, including the adoption of a clear framework for the coal phase-out and binding commitments to cut greenhouse gas emissions of the power sector by 40% by 2025; accelerating the deployment of renewable energy sources; market liberalisation of the wholesale and retail electricity markets, governance reforms, as well as the removal of financial and regulatory bottlenecks for energy efficiency investments. The plan foresees €1.7 billion investments in renewable energy sources, electricity storage and interconnection capacities and over €1 billion in energy-efficiency renovation of the building stock. In the area of transport, the plan includes a sizeable allocation (€666 million) to decarbonisation measures such as the introduction new electric rolling stock for sub-urban and inter-regional rail transport; the construction of a new section of the Sofia metro; sustainable urban mobility pilot scheme with purchase of zero-emission public transport vehicles and charging station infrastructure. Dedicated measures in the area of biodiversity aim to protect and restore ecosystems and natural habitats and species (€48 million).

Example project: Renovation of private and public buildings

The plan contains a comprehensive national support scheme for energy efficiency renovation of residential, public and commercial buildings. The investment of €924 million will result in the renovation of at least 3.6 million m2 in residential buildings, at least 1.4 million m2 in non-residential public buildings and of 866 non-residential buildings in manufacturing, trade and services, as well as the tourism sector. The project will help achieve at least 30% primary energy demand savings, limit energy waste, lower carbon emissions, while also ensuring positive social, health and environmental implications.

Digital transition

Digital challenges for Bulgaria are related to insufficient connectivity through very high-capacity networks, low offer and uptake of digital public services, low level of digital skills and limited uptake of digital technologies by enterprises.

Key measures for the digital transition

Bulgaria’s recovery and resilience plan supports the digital transition with reforms and investments aimed at increasing the coverage of very high capacity networks across the country, including in rural and sparsely populated areas (€270 million); enhancing the digital skills (€319 million); improving the digitalisation of public administration and the provision of digital public services in key areas such as justice, postal services, health, employment and social protection (€297 million); supporting the digitalisation of businesses (€EUR 15.7 million), as well as of the transport (€202.6 million) and energy sectors (€75.7 million).

Example project: Large-scale deployment of digital infrastructure

Bulgaria plans to invest substantially (€270 million) in the widespread availability of very high capacity networks throughout the country. The project will aim to upgrade and extend the coverage of the state network to all municipal centres and provide coverage with VHCNs in areas where this infrastructure is unlikely to be developed soon due to the lack of market interest (“white areas”). This will contribute to reducing the urban rural divide and to creating prerequisites for equal access to high speed connectivity services for all citizens.

Economic and social resilience

Key macro-economic challenges for the Bulgaria’s economy include improving the quality of institutions and fighting corruption; addressing labour and skills shortages as well as skills mismatches relative to the labour market needs; improving the quality, inclusiveness and labour market relevance of education and training; improving access to integrated employment and social services and more effective minimum income support; strengthening the resilience, accessibility and capacity of the health system.

Key measures in reinforcing economic and social resilience

The plan reinforces economic and social resilience through comprehensive anti-corruption measures, including reforms to ensure the accountability and criminal liability of the Prosecutor General, strengthened anti-corruption institutions and increased transparency and competition in public procurement; support for e-justice; better governance of state-owned enterprises (€71 million). The plan also foresees the creation of industry parks (€111 million) and a large-scale economic transformation programme to support the technological modernisation of SMEs and mid-caps, notably their green and digital transitions (€801 million). There are also important measures for modernising education and enhancing research and innovation (€748 million). The plan aims at strengthening the adequacy and coverage of the minimum income scheme, improving the provision of employment and social services and their integration, as well as modernising long-term care with a focus on people with disabilities and older people (€440 million). Access to healthcare will be improved through modernization of hospitals and medical facilities; establishing an air ambulance system; the construction of outpatient care units in remote and under-served regions (€372 million).

Example project: STEM centres and innovation in education

The €245 million project will aim to modernise teaching tools and enhance learning in the fields of science, technology, engineering and math (STEM) subjects in Bulgarian schools through the construction and/or refurbishment of a national and three regional STEM centres. The project also foresees the establishment of more than 2 200 STEM laboratories in schools, including high-tech classrooms, which will promote the digital literacy and teaching methods of STEM subjects.

The plan is consistent with relevant country-specific challenges and priorities identified in the European Semester, an annual cycle of coordination and surveillance of the EU’s economic policies. For a detailed explanation of the European Semester see the following link: The European Semester explained | European Commission (europa.eu)