General project information

The ambitious climate policy objectives set by the European Green Deal pose serious challenges to Bulgarian municipalities in regard of clean energy transition. Тhese challenges come along with certain needs and barriers such as:

  • considerable financial resource needed for the energy efficiency of buildings and RES measures;
  • market barriers for access to CET funding;
  • lack of dedicated technical assistance for preparation of CET projects.

Project FLAG - Financial instrument for clean energy transition (FLAG FICET) addresses these challenges by developing, demonstrating and promoting innovative financial instrument, structured within the framework of Fund FLAG, aiming to support municipal CET investments in collaboration and consultations with a wide number of stakeholders.

The project is approved for financing under LIFE call: LIFE-2021-CET-PDA: Disruptive PDA – Technical Assistance to advance market boundaries for sustainable energy investments. Project Development Assistance (PDA) offers technical assistance to project developers to undertake energy efficiency and renewable energy investments of ambition and scale.

Fund FLAG is а project coordinator, Club “Economika 2000” and Economic Research Institute at the Bulgarian Academy of Sciences are project partners and beneficieries. The duration of the project is 36 months, starting on October 1st , 2022. The project budget is EUR 1,499,141.69, of which EUR 1,424,183.69 is a contribution from the European Commission.

Publication about the project in Bulgarian media.

Project objectives

The general project objectives are:

  • to support the municipalities in Bulgaria in their preparation to face the challenges in the field of climate change mitigation and adaptation in the next decade through CET
  • to mobilize financial resource for supporting CET investments of Bulgarian municipalities in the next decade
  • to build capacity in the Bulgarian Fund FLAG for development, assessment and financing of municipal CET projects
  • to raise the Bulgarian municipalities' awareness in the field of CET and the possibilities to finance green investments.

The specific project objectives are:

  1. To structure and launch an innovative financial instrument in FLAG to support CET investments in Bulgaria, which would upscale the experience and good practices in the country and the EU, and disrupt the barriers on the market for financing such projects.
  2. To improve the capacity of FLAG:
    • to structure financial instruments in entirely new areas, in which it has never operated
    • to administer financial instruments focused on green financing
    • in CET policy issues and to provide technical assistance for development of investment projects in this area
  3. To enhance the inter-institutional coordination in development of climate change mitigation and adaptation financial instruments
  4. To prepare municipal CET investment projects in Bulgaria

Project tasks and activities

The project tasks are structured in 5 work packages:

WP 1: Project management and coordination;

WP 2: Analysis of the supply and demand for CET project financing;

  • Analysis of the activity of FLAG with regard to the implementation of financial instruments; Study of the market for CET project funding in Bulgaria; Study of good European practices and experience in implementation of CET financial instruments (Summary report)
  • Study of the needs for and preparedness of the municipalities to implement CET projects (Summary report)
  • Elaboration of a methodology for evaluation of green projects (Summary report)
  • Improvement of municipal creditworthiness assessment methodology (Summary report)

WP 3: Structuring and launching the financial instrument;

  • Elaboration and consultation of a detailed design of the financial instrument
  • Preparation of the set of application documents, necessary for the launch of the financial instrument, and publishing of the First Call
  • Submission of the Application Forms and evaluation of pilot project proposals, organization of an official ceremony for signing of the first contract under the financial instrument

WP 4: Technical assistance for development of project proposals to be funded by the FI

  • Review of the existing and collection of additional information and documentation for the pilot projects
  • Development of technical and financial documentation for the pilot projects
  • Development of the full application packages for the pilot projects

WP 5: Sustainability, replication and exploitation of project results.

  • Ensuring the institutional sustainability of the innovative financial instrument
  • Ensuring the financial sustainability of the innovative financial instrument
  • Promotion of the financial instrument
  • Development of After LIFE Plan

Project results

The expected project results are:

  • Set up of a large-scale financial instrument focused on mixed financing sources and innovation
  • Development of three targeted financing schemes:
    • Financing scheme or energy efficiency of municipal buildings and energy efficient lighting
    • Financing scheme for clean energy – RES from municipal thermal mineral waters
    • Financing scheme for clean energy – RES for solar systems/parks, incl. those located on closed and recultivated municipal landfills.
  • Provision of technical support for structuring of pilot projects under the three schemes;
  • Ensuring financing of pilot projects under the three schemes, closely linked to achieving ambitious levels of energy saving and decarbonization;
  • Creation of a specialized Climate Financing Unit in Fund FLAG to provide technical assistance for the development and implementation of investment projects;
  • Еstablishment of a working model of coordination and consultation with a wide range of stakeholders regarding projects of local authorities for the transition to clean energy;



General disclaimer

Views and opinions expressed on the project website are however those of the authors only and do not necessarily reflect those of the European Union or CINEA. Neither the European Union nor the granting authority can be held responsible for them.