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The Challenges in Financing Energy Communities in Bulgaria in the Low Carbon Economy Transition


The inclusion of citizens in the energy transition process and encouraging the participation of local communities is crucial for achieving carbon neutral economy by 2050. The new European Directive for Renewable Energy Sources (RED II) is a turning point for the European energy communities due to its focus on decentralized initiatives and a citizen-oriented just transition. The development of new financial mechanisms combining the advantages of the market-oriented instruments and non-repayable financial aid is intrinsic for encouraging projects that include not only private and public entities, but also citizens.

On 23 November 2021, the Center for the Study of Democracy organized a round table discussing the challenges in financing energy communities in Bulgaria in the just transition. The project Consumer Stock Ownership Plans for Renewable Energy Sources Projects piloted in energy communities in Prague, Germany, and Italy was presented at the event. The project gathered together local authorities, financial institutions, CSOs and more than 2400 households. The project activities will continue in follower cities across Europe.

The online event gathered participants from across Bulgaria and from different types of institutions, including representatives of local authorities such as the mayor of Gabrovo city Tania Hristova, Elena Anastasova, Energy Security expert in the municipality of Dobrich, and Ivaylo Trendafilov, chief expert in the International Cooperation and Integrated Territorial Investments Unit in the municipality of Burgas. The financial institutions were represented by the Bulgarian Development Bank by the head of Strategic Analysis and Development Sofia Kasidova, the director of the Fund of Funds unit for Project Information and Funding, as well as Iva Petkova, senior expert in Fond FLAG unit for Finances.

The round table was focused on the Bulgarian experience of the municipalities and the financial institutions and discussed the challenges they are facing in continuing their activity for local energy efficiency. One of the main problems identified by the panelists was the lack of legal framework targeting local communities and their projects, also known as energy cooperatives, as well as the low level of awareness across citizens about the energy cooperatives, their advantages and drawbacks and the fight against energy poverty. The lack of politically agreed model for energy efficiency projects was also identified as an important obstacle for the development of a new innovative instrument combining grants and market-oriented financing.  

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