Bulgaria’s €653 Million Recovery Fund at Risk of Being Lost

Bulgaria faces significant challenges regarding its National Recovery and Resilience Plan (RRP), according to Deputy Prime Minister Tomislav Donchev. He revealed that half of the funds under the RRP are at risk due to unfulfilled reforms. The second payment of 653 million euros, which was intended for Bulgaria, will certainly be denied despite the country completing 85% of the reforms required for this stage. With the funds already used from the first payment, the remaining resources are expected to last only until September of this year.

Donchev explained that the deadline for completing payments under the national plan is August next year, and any costs incurred after this date will not be eligible for reimbursement. This situation forces the government to analyze which projects should be abandoned in order to avoid financing them from the national budget. If projects are not dropped now, the country risks incurring a significant budget deficit in 2026. The decision on which projects to cut will be based on whether they have started, whether public procurement has been carried out, and if implementation is underway.

According to Finance Minister Temenuzhka Petkova, the Ministry of Finance has identified seven projects that cannot be implemented by the August 2026 deadline. Additionally, 15 other projects have a very low likelihood of completion on time. These investments, if they proceed without EU funding, would burden the national budget, which could lead to adverse financial impacts for 2025 and 2026.

The situation in the energy sector is described as critical, with Energy Minister Zhecho Stankov pointing out that reforms in this area are not feasible due to their potential threat to energy security and contradictions with national interests. He cited two major reforms, including creating strategic energy companies and meeting a commitment to reduce emissions from coal-fired power plants. Stankov emphasized that the reforms could lead to increased costs for Bulgarian citizens and create political tension within the country.

Minister of Regional Development and Public Works Ivan Ivanov highlighted that delays in the rehabilitation program were not due to unfulfilled reforms but to criminal inaction. He noted that the program was at least 15 months behind schedule. Meanwhile, Transport Minister Grozdan Karadjov expressed concern about the high risk of missing key deadlines, particularly the tender for rail transport and the purchase of 35 electric trains. With only 16 months left, there is little chance that the trains will be delivered on time. Another at-risk investment includes broadband access projects.

In response to these challenges, the government is working to revise its approach, focusing on which projects to prioritize in the next few weeks. The analysis should be completed within two weeks, aiming to minimize the financial fallout while attempting to save parts of the plan and budget for 2026.

Sources:

• BNR
• BNT
• Nova TV