EU funding in Bulgaria: more than 2bn BGN will be made available in 2017 for various projects

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1 EU funding in Bulgaria: more than 2bn BGN will be made available in 2017 for various projects Priority areas: Research and Development, Emergency Healthcare, Disadvantaged Children, the Struma and Cherno More Motorway, Promotion of Tourist Attractions as National Monuments of Culture, Development of Rural Tourism and Revival of Crafts. This is but a part of the priority areas where EU funding will be provided in 2017, according to an analysis of the projects that will be eligible for financing in the new programming period, performed by Economist. The private sector, non-governmental organizations (NGOs), municipalities and farmers will be able to apply for financing of over 1.8 billion leva. The amount will certainly exceed 2 billion leva because the managing authorities of the programmes, Environment, Science and Education for Smart Growth, and the Maritime and Fisheries Programme have not yet published plans on the absorption of EU funds for next year. However, the absorption of EU financing will not be the only challenge. In 2017, the European Commission will apply the financing against reforms rule for the first time. The member states will report their fulfilment of the preliminary conditions (author s note: the progress in regards to public reforms) through official self-assessment in This assessment will be reviewed by the European Commission, sources of Deputy Prime Minister Tomislav Donchev s Office told Economist. Example of the public reforms include: the introduction of efficient law on public procurement and respective follow-up control, the drafting of flood risk maps, and performing a national survey of climate change. Donchev s Office said, however, that preliminary monitoring of the progress shows that there are no grounds to expect a delay of the public reforms in Bulgaria. All preparatory measures have been reportedly been taken, including intensified and joint monitoring with their respective European services. Obviously, the country s self-assessment is largely positive. As such, it is yet to be seen whether Brussels will confirm it. Available financing under EU programmes in 2017 EU programme Amount in BGN Innovation and Competitiveness 276,375,132 Human Resources Development 11,000,000 Regions in Growth 376,000, ,145 Transport and Transport Infrastructure Over 350,000,000* Rural Development 800,000,000 Good Governance 22,850,000 Environment To be announced Science and Education for Smart Growth To be announced Maritime and Fisheries To be announced Total 1,836,225,132 *The amount may vary depending on the progress of the public procurement. It does not include the railway sections that are pending construction. Source: Government platform 1

2 EU support for young, old, and female entrepreneurs Special EU subsidies are envisaged for female entrepreneurs, young people up to the age of 29, start-ups and persons over 50 proposing a private undertaking. This is a part of the surprises in the regulations for the absorption of European funds next year. The question is about the scheme Support for the promotion of entrepreneurship in areas, related to European and regional challenges with a budget of 67,227,786 leva. Projects will be accepted from April to June The scheme is a part of Operational Programme (OP) Innovation and Competitiveness of the Bulgarian Economy. Small and medium-sized enterprises, the Sofia Tech Park, the Patent Office, the Sustainable Energy Development Agency and the Bulgarian Institute of Metrology will be able to absorb a total of 276,375,132 leva, according to the project of the Economy Ministry. The entrepreneurs operating in the sectors of IT, mechanical engineering, high technologies, etc. will be able to avail themselves of the long-anticipated scheme Development of product and production innovations with a budget of 68,454,050 leva. In terms of projects, this scheme is similar to the procedure as of the beginning of this year but is mostly oriented towards already existing undertakings unlike the previous one, which was only for start-ups, sources of the Economy Ministry told Economist. In particular, the EU financing will be used to cover operations, related to the development of innovations through applied research in the undertaking or outside it. Application of non-patent discoveries, testing of prototypes and pilot lines will also be financed. The subsidy for projects of microenterprises will be 70%, for medium-sized 60% and for big 50%. However, companies of the Southwest Region, which includes the capital city of Sofia, will receive a half of this amount because it is believed that they are in a better economic condition compared to the other regions in the country. The time period for the project implementation will be 24 months. Project proposals will be accepted from January to April and the maximum support per project will be up to one Another big scheme designed for business, which will be launched next year is Support for pilot and demonstration initiatives for efficient use of resources. The funds are oriented towards existing small and medium-sized enterprises from the processing industry. Technologies for efficient use of waste, waters, recycling of materials and the like will be subsidized. Its total budget is 71,644,656 leva. Proposals will be accepted from September to December next year. The minimum aid per project is 300,000 leva and the maximum 3 An allocation of 8,801,235 leva is available to the business for the creation and development of thematically focused laboratories. Undertakings, developing and installing innovations, clusters and the like will be eligible to apply within the scheme. Proposals will be accepted from June to August next year. The minimum aid will be 100,000 leva and the maximum 2 Sofia Tech Park will receive 39,622,868 leva for the development of innovative infrastructure for studies and innovations and also for improving the exchange of knowledge between the academic circles and the business, according to the draft programme for the European financing for The Economy Ministry told the Economist that Sofia Tech Park has been approved by Brussels as EU funds beneficiary along with the current operational programme as this practice has been coordinated in advance with the business. The Sustainable Energy Development Agency and the Patent Office will receive around 8 million 2

3 leva to increase their efficiency in service of the business and the Bulgarian Institute of Metrology 4 Subsidies for the disadvantaged Children with disabilities and disadvantaged youth have been given priority in the absorption of the funds under OP Human Resources Development. For this purpose, the mayoralties will receive 6 million leva to build daily centres for complex support of children with disabilities and their families. The EU financing will be provided under the scheme Support for children with disabilities as the maximum value of the projects will be 1 The call for proposals will last from the first quarter to the second quarter of next year. At present, there are over 70 daily and weekly centres for children with disabilities. Our idea is to keep on extending the network of such centres in the next few years. This will be fulfilled thanks to the European financing, Social Minister Zornitsa Roussinova said a few weeks ago. Several municipalities in the country felt obliged provide working outfits to mothers taking care of children with disabilities. We have sent instructions to the municipalities that it is not necessary to provide working outfits but rather give the respective amount in cash, Roussinova also said. Another 4 million leva will be provided under the scheme Find Me to NGOs for encouraging the social inclusion of disadvantaged children and youth, including children with disabilities. Experts will teach the youth skills for independence and personal development. Projects will be accepted from the first to the second quarter of The minimum EU subsidy per project will be 50,000 leva and the maximum 150,000 leva. The Social Assistance Agency will receive directly 1 million leva under the scheme New chance for social inclusion. The funds will help the Agency s experts in applying a new approach of assessment of the working capacity of vulnerable people. The Ministry of Labour and Social Affairs told Economist that the programme s Monitoring Committee will hold a meeting in December and is expected to take a decision on the launching of another 10 schemes for the absorption of EU funds next year. It is yet to be decided, however, what these schemes will be and the amount of their budget. Healthcare a key priority Emergency healthcare will be a leading priority for the absorption of EU financing under OP Regions in Growth next year. A total of million leva have been envisaged under the scheme Regional health infrastructure. The funds account for 43.5% of all 376 million leva allocated for Regions in Growth for next year. It is envisaged to implement one big project for modernization of the emergency medical care system with the Health Ministry being the beneficiary, the Ministry of Regional Development and Public Works told the Economist. The EU funds will be used to purchase of modern ambulances, equipped with communication devices and medical apparatuses for emergency medical care. The money will be disbursed for construction, reconstruction, building repair, equipment of the emergency care branches within and outside the regional centres. Investments in the emergency wards of the regional multiprofile hospitals will also be subsidized. The Ministry said that hospitals cannot apply on their own. At present the Health Ministry is preparing a feasibility study that will identify the specific sites, which will be covered by the programme, sources of the Ministry sad. Projects will be accepted as of January 2017 as no end date for submission has been set. 3

4 Another 98,530,686 leva will go for the development of tourist attractions. The European funds will be used for conservation and restoration of sites and for the launching of equipment and programmes for translation, guide services, etc. Subsidies for religious sites are also envisaged. Tourist products with market information, such as marketing surveys and regional studies of visitors, development of tourist packages and advertising activities will also receive support. EU financing will also cover the development of tourist paths, climbing, equestrian and cycling routes, picnic areas, information signboards, visitor information centres, etc. near the tourist landmarks. Subsidies are envisaged for the training of staff, working for the landmarks, and for participation in national and international tourist exchanges, exhibitions and fairs. The Culture Ministry, municipalities, religious institutions, etc. will be eligible to apply with projects. The call for proposals will be opened in May 2017 as the subsidy per site of national importance will be up to 9,779,150 leva and for sites of world importance 19,558,300 leva. Another two big schemes, which will be implemented next year, are Support for deinstitutionalization of social services for children and Support for deinstitutionalization of social services for elderly people with a budget of 57 million leva and 42.3 million leva, respectively. The EU funds will be used to cover costs on construction, studies of the energy efficiency studies and the structures of existing buildings, etc. At least 15 million leva are allocated for the retrofitting of buildings in small towns in the country s 28 regions. The call will be launched in December 2017 and will last until March 2018 as the maximum investment value of each project is about to be set. The money will be used for the retrofitting of residential, administrative, public and municipal buildings. The Regional Ministry noted that a National Programme for Energy Efficiency of Multifamily Residential Buildings is implemented parallel to this scheme. It is financed by the Bulgarian Development Bank. Its budget is 1 billion leva. As many as 4,434 associations of owners from across the country have already been registered. The buildings, which have contracts for targeted financing with the Bulgarian Development Bank, are 2,018. A few days ago Prime Minister Boyko Borissov said that additional 1 billion leva will be budgeted for retrofitting next year. We have allocated 1 billion leva on average annually and we will provide this amount as long as we are in power, the Prime Minister said. Financing for infrastructure projects Next year EU financing for roads will be disbursed for sections of the Strouma Motorway, preparation of the Cherno More Motorway and the Sofia Underground as well as for sections of the Bourgas-Alexandroupolis railway line. The amount for a larger part of these projects cannot be determined yet because the schemes have been launched already since end-2015 and public procurement procedures are going on. The Road Infrastructure Agency told the Economist that 20,417,746 leva will be spent on roads next year. The first project is for preparation of the Cherno More Motorway. EU funds will be used to subsidize the development of an extended conceptual design and parcelling plans along with all coordination, approval, authorization and other activities for the motorway. Cherno More is of a total length of slightly over 100 km and is a part of the Pan-European Transport Corridor VIII (Drac-Tirana-Skopje-Sofia-Bourgas-Varna). Due to the limited EU financing for roads within the current programming period, only costs on the preparation of the motorway will be covered. Part of the financing will go for the preparation of the Rousse-Veliko Turnovo project as the larger part of the money will be for payment of the costs on expropriation procedures. 4

5 The Road Agency also noted that the construction of the Strouma Motorway, lot 3.1 Blagoevgrad-Kroupnik, lot 3.3 Kresna-Sandanski and Zheleznitsa Tunnel will continue through the next year. On November 30, 2015, the Strategic Infrastructure Projects National Company opened a procedure for the assignment of the design and construction of the Strouma Motorway, lot 3.1 Zheleznitsa Tunnel. Since the company terminated its operation, the procedure will be finished by the Road Infrastructure Agency. The indicative value of the public procurement is 300 The project contractor is expected to be selected at the beginning of 2017, the Agency, headed by Lazar Lazarov, also said. The extension of the Sofia Underground is also funded by EU money. Its third line will run via the Vladimir Vazov Blvd. Evlogi & Hristo Georgievi Blvd. Eagle s Bridge National Palace of Culture Krasno Selo quarter Ovcha Koupel quarter. Its total value is 848 million leva before VAT, of which 685 million leva will be provided under OP Transport and Transport Infrastructure The third line of the underground is expected to be completed in August The fast railway track Bourgas-Alexandroupolis will also be constructed next year. This is the so-called sea-to-sea project. It will run via Svilengrad- Simeonovgrad-Nova Zagora-Karnobat-Bourgas on Bulgarian territory. The Karnobat-Bourgas section will be built within OP Transport. Greece has the task to electrify its section. Funds for the Agro sector The long-anticipated call within the rural tourism measure Investments in support of nonagricultural activities is expected in the agricultural sector. It will be launched in November 2017 with a budget of 50.2 million euro and will cover development of local crafts, investments in renewable sources, etc. Overall, the Agriculture Ministry, headed by Minister Dessislava Taneva, is planning to announce calls on a total of 20 measures with the Rural Development Programme. Their total budget exceeds 423 million euro or around 800 million leva. The budget for environmentally friendly measures has not been set yet. Entrepreneurs and farmers expect also the second call for investments in the modernization of workshops of the food processing industry. The total budget is up to 85 million euro. The maximum value of one project in this sector is up to 3 million euro. Projects within the measure Investments in the development of small holdings with a total budget of 12.5 million euro will be accepted in the first two months of the year and a call under another attractive measure, Establishment of holdings of young farmers with a budget of 41.5 million euro, will be announced in July. Three forestry-related measures will be launched in October: Prevention of forest damage from wildfires, natural disasters and catastrophic events, Restoration of forest damage from wildfires, natural disasters and catastrophic events and Investments in forestry technologies and the processing, mobilization and trade in forestry products. Regardless of the initial reports that a call within the agrarian innovations measure will be announced for the first time next year, it has turned out that it does not feature in the project, released for public discussion, as was the case last year. Source: Economist BG by Dragomir Nikolov 5