COMMISSION STAFF WORKING DOCUMENT Analysis of the recovery and resilience plan of Bulgaria Accompanying the document Proposal for a COUNCIL IMPLEMENTING DECISION on the approval of the assessment of the recovery and resilience plan for Bulgaria
Date: 2022-04-07
Institutions: European Commission, Secretariat-General
Subjects: Bulgaria, EU aid, coronavirus disease, economic and social cohesion, economic recovery, economic reform, epidemic, investment, structural adjustment

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 7.4.2022  SWD(2022) 106 final  COMMISSION STAFF WORKING DOCUMENT Analysis of the recovery and resilience plan of Bulgaria Accompanying the document Proposal for a COUNCIL IMPLEMENTING DECISION on the approval of the assessment of the recovery and resilience plan for Bulgaria {COM(2022) 172 final}  
 
 
1. 

Executive summary ............................................................................................................................... 2 

2.  Recovery and resilience challenges: scene-setter ................................................................................ 6 

2.1.  Macroeconomic outlook and developments since the 2020 country report ............................... 6 

2.2. 
Challenges related to sustainable growth, cohesion, resilience and policies for the next 
generation ............................................................................................................................................... 10 

Smart, sustainable and inclusive growth ................................................................................................ 10 

2.3. 

Challenges related to the green and digital transition ............................................................... 14 

Green dimension ................................................................................................................................. 14 

Digital dimension ................................................................................................................................ 20 

3.  Objectives, structure and governance of the plan.............................................................................. 26 

3.1.  Overall strategy of the plan ........................................................................................................ 26 

3.2. 

Implementation aspects of the plan ........................................................................................... 30 

4. 

Summary of the assessment of the plan ............................................................................................ 35 

4.1. 

Comprehensive and adequately balanced response to the economic and social situation ...... 35 

4.2. 

Link with country-specific recommendations and the European Semester ............................... 44 

4.3.  Growth potential, job creation, economic, institutional and social resilience, European Pillar of 
Social Rights, mitigating the impact of the crisis, and social territorial cohesion and convergence ...... 50 

4.4. 

The principle of ‘do no significant harm’ .................................................................................... 60 

4.5.  Green transition .......................................................................................................................... 62 

4.6. 

Digital transition .......................................................................................................................... 66 

4.7. 

Lasting impact of the plan ........................................................................................................... 72 

4.8.  Milestones, targets, monitoring and implementation................................................................ 74 

4.9. 

Costing ........................................................................................................................................ 75 

4.10.  Controls and audit ....................................................................................................................... 77 

4.11.  Coherence ................................................................................................................................... 80 

ANNEX: Climate tracking and digital tagging ......................................................................................... 83 

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1.  EXECUTIVE SUMMARY  

The COVID-19 pandemic has interrupted several years of solid economic growth. This robust 
growth  (3.6%  on  average  over  the  five  preceding  years)  was  underpinned  by  growing  private 
consumption and positive labour market developments. Still, Bulgaria has been slow to catch-up 
with the rest of the EU and it has the lowest level of income per capita (55 % of the EU average in 
PPP). After a fall by 4.4% in 2020, real GDP rebounded by 4.2% in 2021, driven by household 
consumption and goods export. This economic expansion is projected to continue with GDP set to 
grow by 3.7% in 2022 and 3.9% in 2023 according to the European Commission Winter Forecast, 
which however did not include the impact from the war in Ukraine. More adverse labour market 
developments have been avoided largely by the swift introduction of short-time work schemes, 
partly supported through the related European instrument for temporary support (SURE), as well 
as the EU’s recovery assistance for cohesion and the territories (REACT-EU). As a result of the 
contraction in  economic  activity and  the  support  measures, the  government  balance  recorded  a 
deficit of 4% of GDP in 2020. According to the latest European Commission forecast, this was 
followed by a slightly improved deficit of 3.6% in 2021, thanks to the rebound of the economic 
activity.  Large  inflows  of  RRF  and  other  EU  funds  are  expected  to  support  the  activity  in  the 
coming years. The general government debt is estimated to have increased to around 27% of GDP 
in 2021. 

Although  Bulgaria’s  economy  has  rebounded  from  the  immediate  COVID-19  shock, 
structural vulnerabilities continue to weigh on its convergence prospects. Bulgaria has one of 
the  highest  levels  of  poverty  and  income  inequality  and  a  weak  performing  health  system 
characterised by a limited access to healthcare services. Strong regional disparities,  a shrinking 
working-age  population  and  rising  labour  shortages,  particularly  in  sectors  demanding  specific 
skills, weigh on productivity growth and upward social convergence in the country. Despite reform 
efforts, the quality and inclusiveness of education remain a concern, with persistently high rates of 
early  school  leaving,  low  levels  of  basic  and  digital  skills,  and  a  strong  impact  of  the 
socioeconomic  status  on  students’  performance.  The  business  environment  is  generally  not 
supportive of investment, also due to many institutional shortcomings. Bulgaria has been unable 
to  create  a  solid  track  record  so  far  in  fighting  corruption,  which  would  help  to  build  up  the 
currently very low levels of public trust in institutions. The uptake of digital technologies is slow 
in  both  public  and  private  sectors  and  Bulgaria  ranks  last  among  EU  Member  States  in  digital 
skills.  The  country  is  also  underperforming  in  the  area  of  research  and  innovation1.  Finally, 
Bulgaria remains the most energy- and greenhouse gas-intensive economy in the EU by a wide 
margin. For many years, there has been a strong reluctance to commit to or even plan a coal phase 
out. This has become urgent to ensure that the high societal and economic costs of the transition 

1 European innovation scoreboard (https://ec.europa.eu/info/research-and-innovation/statistics/performance-
indicators/european-innovation-scoreboard_en) 

2 

 
 
                                                           
are minimised. To sum up, broad-based structural reforms are needed to boost productivity and to 
achieve a sustainable and inclusive growth. 

Bulgaria’s  Recovery  and  Resilience  Plan  (“Plan”)  has  an  estimated  total  cost  of  EUR  6.9 
billion.  It  is  structured  around twelve components grouped in  four policy pillars:  i)  Innovative 
Bulgaria;  ii)  Green  Bulgaria;  iii)  Connected  Bulgaria;  and  iv)  Fair  Bulgaria.  It  consists  of  103 
individual measures (47 reforms and 56 investments). The estimated total cost of the plan is above 
the non-repayable financial support available to Bulgaria under the RRF Regulation of EUR 6.27 
billion. Bulgaria has not requested any loans under the RRF Regulation.  

Bulgaria’s  Plan  represents  to  a  large  extent  a  comprehensive  and  adequately  balanced 
response  to  the  economic  and  social  situation  in  the  country.  Therefore,  it  contributes 
appropriately to the six policy pillars referred to in Article 3 of the Regulation2. The Plan strongly 
supports the green transition and aims to address the major societal and environmental challenge 
of decarbonisation of the economy. The Plan is expected to greatly accelerate the deployment of 
the  renewable  energy  sources  and  to  cut  by  40%  the  greenhouse  gas  emissions  from  power 
production.  It  includes  measures  for  the  decarbonisation  and  the  digitalisation  of  the  transport 
sector, promoting low-emission mobility and use of less polluting modes of trasnport, and for the 
improvement of road safety. Moreover, the Plan includes a host of measures supporting the digital 
transition that are spread over many components, including the large-scale roll-out of very high 
capacity networks across the country, digitalisation of the  public administration,  education and 
training systems,  and judiciary.  Additionally,  a  number of measures will  contribute to  a smart, 
inclusive  and  sustainable  growth,  including  through  reforms  and  investments  for  improving 
business environment, fostering innovation and R&D and supporting SMEs and the cultural and 
creative  sectors.  Social  cohesion  is  strengthened  through  the  reform  of  the  minimum  income 
scheme and the modernisation of the Employment and Social Assistance agencies, as well as by 
providing  support  to  the  social  and  solidarity  economy.  The  Plan  also  contains  measures  for 
improving education and skills, lifelong learning and vocational training, and reforming the system 
of social services, including the long-term care. As one of the critical sectors for crisis preparedness 
and resilience, the health sector is specifically supported by a dedicated component. The Plan also 
includes measures for the next generation, such as the mandatory inclusion of four-year olds in 
pre-school  education,  and  investments  in  the  educational  infrastructure,  including  school 
laboratories and youth centres. 

The Plan constitutes a comprehensive package of reforms and investments addressing all or 
a  significant  subset  of  the  challenges  and  recommendations  identified  in  the  European 
Semester. The  Plan  addresses  the  country-specific  recommendations  in  the  social  field  with 
measures to foster social inclusion, which are expected to improve the adequacy and coverage of 

2 Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the 
Recovery and Resilience Facility (hereafter ‘the Recovery and Resilience Facility Regulation’) (https://eur-
lex.europa.eu/legal-content/EN/TXT/?uri=CELEX%3A32021R0241). 

3 

 
 
                                                           
the minimum income scheme, and with measures to move forward the integration of employment 
and social services. Other measures addressing the  country-specific recommendations focus on 
skills  acquisition  -  in  particular  digital  skills,  on  improving  the  labour  market  relevance  of  the 
education and lifelong-learning systems and on widening the offer of healthcare services across 
Bulgaria. These actions can contribute to reach the objectives and progress further on the European 
Pillar  of  Social  Rights  and  its  Action  Plan  by  2030.  Furthermore,  through  advancing  the 
decarbonisation of the energy sector, increasing the overall energy efficiency, and implementing 
actions on sustainable transport and digital infrastructure and services, the Plan addresses country-
specific  recommendations  in  those  areas.  Finally,  the  Plan  contains  far-reaching  measures  to 
improve  the  efficiency  of  the  public  administration  and  justice  system,  to  prevent,  detect  and 
correct  corruption,  to  improve  the  business  environment  and  to  improve  the  research  and 
innovation system.  

The Plan contributes to climate objectives for 58.9% (close to EUR 3.7 billion), thus over-
achieving the climate target of 37% by a large margin. Reforms and investments in the Plan 
aim to accelerate the decarbonisation of the energy sector by  setting out a clear commitment to 
approve by 2023 a calendar to phase out coal and lignite power generation as soon as possible and 
at the latest by 2038, as well as by facilitating the deployment of renewables and alternative energy 
sources, such as green hydrogen and biogas. The Plan also includes reforms aiming to establish 
competitive wholesale and retail markets through a gradual deregulation of electricity prices by 
2025 and to strengthen the governance of energy SOEs. The biodiversity component of the Plan 
contains measures aiming at protecting and restoring ecosystems and natural habitats and species 
of European and national importance. The Plan is expected to enhance the sustainability of the 
transport sector by  reforming the road and railways sectors, promoting zero-emission vehicles, 
enhancing  road  safety,  and  investing  in  railways,  intermodal  transport  and  sustainable  urban 
mobility. This includes investments in the modernisation and digitalisation of railways, new zero-
emission  rolling  stock,  deployment  of  the  European  Rail  Traffic  Management  System,  a  new 
intermodal terminal in Ruse and clean public transport (Sofia metro and a pilot programme for 
sustainable urban mobility). 

The recovery and resilience plan contributes to the digital objective for  25.8% ( EUR  1.6 
billion), thus achieving the digital target of 20%. Investments in digital connectivity include the 
roll-out of very high capacity networks in rural and sparsely populated areas, which are lagging 
behind  in  terms  of  digital  inclusion.  The  reforms  included  in  the  Plan  aim  to  contribute  to  the 
development and implementation of an effective policy and regulatory framework, the efficient 
use of the radio  frequency  spectrum for the development  of 5G networks and services  and the 
creation of a favourable investment environment. The Plan also includes a comprehensive package 
of reforms and investments to support the digitalisation of the public administration, including the 
judiciary, unlocking the potential in areas such as justice, health, agriculture, environment, culture, 
employment and social protection. The Plan includes measures to increase the level of digital skills 
of the population. The Plan also supports the digitalisation of the transport and energy sectors, thus 

4 

 
 
contributing to their progressive decarbonisation. As regards the private sector, the investments in 
the digital transformation of the business processes and increased cybersecurity capabilities should 
contribute to  improvements in their efficiency and productivity. Moreover, digital  technologies 
and infrastructure are expected to enhance Bulgaria’s innovation capacity, with a particular focus 
on green and digital technologies. 

The implementation of the investments and reforms in the Plan is expected to have a lasting 
impact, primarily by strengthening the public institutions and by structural reforms in key 
policy  areas.  Ambitious  reforms  in  the  judiciary  and  anti-corruption  bodies  combined  with 
administrative reforms in key areas such as research and innovation, green transition and digital 
transformation, aim to improve the quality of public services. In addition, policy changes to reduce 
existing barriers to business activity and reforms to address long-standing problems in education, 
healthcare  and  social  protection  complement  investments  in  these  areas.  Overall,  the  Plan 
addresses  many  of  the  country's  core  problems  in  the  areas  of  environmental  sustainability, 
business environment, education and skills, healthcare, social and labour market. As a result, the 
implementation of the Plan is expected to lead to a faster, more sustainable and more inclusive 
economic growth. 

The National Fund Directorate of the Ministry of Finance is designated as the coordinating 
unit for the implementation and control of the Plan. The Directorate will act as a focal point at 
the national level for the preparation of common rules and procedures and for carrying out checks 
and controls on the implementation of milestones and targets. The Economic and Financial Policy 
Directorate at the Ministry of Finance will assist the National Fund Directorate by reviewing and 
confirming  the  implementation  of  reforms  included  in  the  Plan..  The  proposed  qualitative  and 
quantitative  indicators  used  for  the  milestones  and  targets  are  sufficiently  clear,  realistic  and 
comprehensive to ensure that their completion can be traced and verified. Where compliance with 
the Do No Significant Harm principle cannot be ascertained in advance, the milestones and targets 
lay out adequate safeguards for compliance. The large number of milestones and targets appears 
commensurate  to  the  size  of  the  reform  and  investment  package.  To  support  a  successful 
implementation of the Plan, the administrative and implementation capacity of the implementing 
bodies will be reinforced and closely monitored. 

Overall,  the  costing  information  and  supporting  documents  provided  appear  to  be 
reasonable and plausible. The Plan provides adequate explanations on the methodology used for 
establishing the cost estimates for the majority of measures. The justification provided by Bulgaria 
on the amount of the estimated total costs of the Plan is to a medium extent reasonable, plausible, 
and in line with the principle of cost-efficiency. The total cost is commensurate to the expected 
national economic and social impacts. For all measures, calculations behind the cost estimates are 
provided, and these are generally clear and understandable, though in certain cases, more details 
could have been provided to explain how the final budget was computed. The estimated cost of 
reforms  and  investments  included  in  the  Plan  is  in  line  with  –  and  consistent  with  –  existing 
information  for  similar  reforms  and  investments,  including  those  funded  by  other  Union 

5 

 
 
programmes, if available. The  cost  estimates  of the  Plan have been  reviewed by the  Bulgarian 
Executive Agency for ‘Audit of European Union Funds’, which provides further assurance of their 
reliability. Bulgaria provided sufficient information and evidence that the amount of the estimated 
cost  of  the  reforms  and  investments  of  the  Plan  is  not  covered  by  existing  or  planned  Union 
financing. 

The Plan adequately describes the system for the implementation of the audits and controls. 
The internal control system described in the Plan is based on robust processes and structures and 
clearly  identifies  actors  and  their  roles  and  responsibilities  for  the  performance  of  the  internal 
control  tasks.  The  internal  control  system  and  other  relevant  arrangements,  including  for  the 
collection and publication of data on final recipients are expected to prevent, detect and correct 
corruption, fraud, conflicts of interest when using the funds under Regulation (EU) 2021/241 and 
to avoid double funding under that Regulation and other Union programmes. A repository system 
for monitoring of the implementation of the Plan is to be put in place and operational by the time 
of the first payment request. The proposed measures give assurance that there is an adequate level 
of control to prevent, detect, and correct irregularities identified when using RRF funds, provided 
that the pending points on the repository system and administrative capacity are addressed before 
the first payment request, as required by the dedicated milestones.  

The Plan’s twelve components represent a package of coherent reforms and investments. The 
Plan is structured around four coherent pillars supporting the recovery of the Bulgarian economy, 
the  contribution  to  the  green  and  digital  transition,  and  the  enhanced  resilience  towards  more 
sustainable and inclusive growth. Each pillar is built around components which include overall 
consistent  packages  of  mutually  reinforcing  and  complementary  reforms  and  investments.  The 
measures  in  each  of  the  individual  components  are  mutually  reinforcing,  as  investments  are 
accompanied by reforms that aim to resolve structural underlying challenges.  

Table 1: Assessment per criterion 

(1)  
Balanced 
Response 

(2)  
CSRs 

(3)  
Growth, 
jobs… 

(4)  
DNSH 

(5)  
Green 
target 

(6)  
Digital 
target 

(7)  
Lasting 
impact 

(8)  
M&T 

(9)  
Costing 

(11)  
Coherence 

(10)  
Control 
System
s 

A 

A 

A 

A 

A 

A 

A 

A 

B 

A 

A 

2.  RECOVERY AND RESILIENCE CHALLENGES: SCENE-SETTER 

2.1. Macroeconomic outlook and developments since the 2020 country report  

At the onset of the COVID-19 pandemic, economic conditions in Bulgaria were favourable. 
The  positive  trend  of  robust  economic  growth  in  the  last  five  years  (3.6%  on  average)  was 
underpinned  by  growing  private  consumption  and  positive  labour  market  developments.  Still, 
Bulgaria has been slow to catch-up with the rest of the EU and the modest positive trend has been 
interrupted by the COVID-19 outbreak. 

6 

 
 
Bulgaria has also had three rounds of parliamentary elections in 2021, ushering in a period 
of political instability. After the ordinary parliamentary elections in May and a snap election in 
July,  a  new  round  of  combined  presidential  and  parliamentary  elections  on  14  November  has 
finally led to the formation of a government. The government backed by a four-party coalition was 
approved by the Parliament on 13 December. 

The Bulgarian economy is gradually rebounding from the pandemic-induced shock. After 
falling by 4.4% in 2020, real GDP rebounded by 4.2% in 2021, driven by household consumption 
and  goods  export.  This  economic  expansion  is  projected  to  continue.  Private  consumption 
remained relatively unfazed in 2020 given that the industries most hit by the supply restrictions, 
e.g. accommodation and catering services, account for a much smaller share of consumer spending 
in Bulgaria than in other EU Member States. In addition, Bulgaria has had generally less stringent 
restrictions in the second half of the year. In 2021, private consumption grew robustly, supported 
by the job retention schemes, positive wage dynamics, low household debt, and improvements in 
consumer sentiment. Investment growth remained subdued in 2020 and turned negative in 2021. 
The  contraction  in  capital  formation  was  driven  by  high  uncertainty,  combined  with  reduced 
business activity in the sectors most affected by the pandemic. The exports of goods  have fully 
recovered. They reached their pre-pandemic level already at the beginning of 2021, following a 
sharp drop at the onset of the pandemic in Q2-2020. In contrast, in 2021 the exports of services, 
which are normally dominated by revenue from foreign tourism, were still 50% below their 2019 
levels. 

The volatility in energy and food prices has been driving  the overall inflation in 2020 and 
2021.  This  is  expected  to  remain  in  the  next  two  years.  Effects  of  hikes  in  energy  prices  are 
exacerbated by the energy intensity of the economy. The price for electricity on the free market 
has increased four-fold and has become more volatile since mid-2021, while the regulated prices 
have been kept fixed. As the economy is still around three times more energy intensive than the 
EU average, the indirect effect on the producer and final consumer prices is more pronounced than 
in most of the other EU Member States. According to the Commission’s Winter 2022 Economic 
Forecast, Annual HICP inflation is expected to reach 6.3% in 2022 and to fall to 3.9% in 2023. 

The economic expansion is projected to continue. According to the Commission’s Winter 2022 
Economic Forecast, which was finalised before the start of the war in Ukraine, GDP is forecasted 
to grow at 3.7% in 2022 and 3.9% and 2023. Investment rates are projected to increase with an 
important  contribution  from  investment  projects  financed  by  the  Plan.  Exports  are  also  set  to 
contribute  to  the  economic  growth,  following  the  evolution  of  external  demand.  Private 
consumption is expected to grow steadily, albeit at a more moderate pace compared to the high 
2021 rates, amid expected consumer price increases. The dynamic growth in nominal disposable 
income,  supported  by  the  favourable  labour  market  situation  and  increased  social  transfers,  is 
forecast to offset the negative effect of higher consumer prices on private consumption  both in 
2022 and 2023.  

7 

 
 
Unemployment is stabilising after a surge at the onset of the pandemic. Prior to the pandemic, 
unemployment had reached historical lows, before jumping to 6.6% in Q2-2020 as the Covid-19 
crisis took hold. Since Q3-2021 it has levelled off and in January 2022 it stood at 4.7%, (seasonally 
adjusted). As expected, the largest share of job losses was recorded in the accommodation and 
food services sectors. In parallel, the labour market participation rate has dropped on average by 
around 1 pp since the beginning of the COVID-19 crisis, as some dismissed workers may have 
moved at least temporarily into inactivity. More adverse labour market developments have been 
avoided largely by the swift introduction of short-time work schemes and the support received 
through SURE, the EU’s temporary support scheme for national short-term work schemes, and 
REACT-EU, the EU’s recovery assistance for cohesion and the territories. The quick rebound in 
manufacturing production and the relaxation of containment measures already in the second half 
of 2020 also supported the labour market demand. According to the Commission’s Autumn 2021 
Economic Forecast, the favourable economic outlook is set to further tighten the labour market, 
with unemployment rates gradually declining to 4.6% in 2022 and 4.4% in 2023. At the same time, 
the transition back to the full-time work and a projected increase in activity rates are forecast to 
partially alleviate the pressure on the labour market and on wages. Nevertheless, growth of wages 
is expected to remain strong at 9% in 2022 and 7.9% in 2023.  

Emergency  budgetary  measures  helped  to  contain  the  negative  effects  of  the  pandemic, 
making use of the fiscal space created before the pandemic. The Bulgarian government has 
raised health care related funding for providers of medical care and introduced measures including 
the provision of vaccines and PCR tests, as well as additional remuneration payments for medical 
staff. It has also provided relief to those individuals and sectors that have been particularly affected 
and launched measures to protect jobs. The estimated direct budgetary impact of these measures 
in  2020  is  close  to  BGN  3.8  billion  (EUR  1.94  billion),  or  around  3.2%  of  GDP.  Taking  into 
account  these  measures  and  the  impact  of  the  pandemic  on  economic  activity,  the  Bulgarian 
government amended its budgetary target to a deficit of 3.1% of GDP in 2021. In light of the rising 
energy  prices,  the  government  has  introduced  compensations  for  firms  in  certain  sectors.  The 
indicative amount of these measures hover around BGN 1.8 billion (EUR 920 million) or 1.2% of 
GDP. The general government debt is estimated to have further increased to around 27% of GDP 
in  2021.  Overall,  national  as  well  as  EU-wise  measures  to  address  the  exceptional  economic 
situation have helped to lessen the shock on household income and prevented further rise in income 
inequality and poverty risk3.  

Although  profitable  and  well-capitalised,  the  financial  sector  operates  amid  heightened 
uncertainty.  The  system-wide  CET1  ratio  remained  high  at  22.1%  at  the  end  of  Q2  2021. 
Following the pronounced decline in 2020, profitability of banks has improved somewhat in 2021, 
with return on equity at  8.1% in Q2 2021. The measures announced by the Bulgarian National 

3 See “Households´ income and the cushioning effect of fiscal policy measures during the Great Lockdown”, 
https://ec.europa.eu/jrc/sites/jrcsh/files/jrc121598.pdf. 

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Bank  at  the  beginning  of  the  crisis,  including  the  retention  of  profits  and  limit  on  commercial 
banks’ foreign exposures, were instrumental for preserving the banking sector stability. Risks stem 
mainly from the relatively high share of non-performing loans, corporate indebtedness and banks’ 
exposures  to  highly  affected  sectors.  The  NPL  ratio  has  been  on  a  downward  trend  across 
individual banks and segments, declining to 5.6% at the end of Q2 2021 (from 6.7% a year earlier). 
Nevertheless, certain credit risk linked to the expiration of the loan payment moratorium, imposed 
in April 2020, exists. 

Notwithstanding  the  gradual  rebound  from  the  immediate  economic  shock,  structural 
weaknesses hamper Bulgaria’s path towards convergence. GDP per capita in PPP in Bulgaria 
has converged from 45% of the EU average in 2010 to 55% in 2020. The gap in consumer price 
level to EU average has remained relatively unchanged in the last ten years, with overall prices at 
55%  of  EU  average  in  2020.  Bulgaria  has  one  of  the  highest  levels  of  poverty  and  income 
inequality and a weak performing health system characterized by limited and unequal access to 
healthcare services. Broad-based structural reforms are needed to boost productivity and to achieve 
sustainable and inclusive growth.  

In  the  longer  term,  adverse  demographic  developments  and  high  inactivity  rates  pose 
significant risks. Bulgaria is facing a double-trend of an ageing and rapidly shrinking population, 
which decreased by around 10% over the past decade, according to the preliminary results of the 
2021 population census. Combined with the high inactivity rates for some groups, notably those 
living in rural and underserved areas, this remains a key challenge for achieving a fair and inclusive 
recovery. 

Bulgaria entered the COVID-19 crisis with a strong fiscal position. The general government 
budget was in surplus since 2016. Rising revenues from taxes and social security contributions 
counterbalanced increases in expenditure that were mainly due to higher public wages and a partial 
recovery in public investment. In 2020, the COVID-19 pandemic pushed the general government 
balance down. Revenues fell due to the economic downturn and expenditure increased to address 
the social and economic consequences of the crisis, while increases in public wages continued. 
Mainly as a result of these developments, the general government budget registered a deficit of 
4% of GDP in 2020 against a surplus of 2.1% of GDP in the previous year. The Commission 2021 
autumn  economic  forecast  estimated  the  general  government  deficit  at  3.6%  of  GDP  in  2021, 
which is an improvement but still above the 3% of GDP, mainly due to the continued COVID-19 
emergency support measures and new permanent social measures. The general government debt, 
which increased by almost 5 pp, to 24.7% of GDP in 2020, is estimated to have further increased 
to around 27% of GDP in 2021. 

The  authorities’  macroeconomic scenario  in  the Medium-term fiscal framework (MFF) is 
more favourable than the Commission’s projections. The difference in growth rates for 2022 
stems from the more favourable assumptions on private consumption and investment activity. In 
the Ministry of Finance forecast, GDP is set to grow more rapidly, at 4.8% in 2022. The difference 

9 

 
 
in expected GDP growth comes from both the higher private consumption and higher investment. 
The  MFF  forecast  projects  lower  consumer  price  inflation  at  5.6%  in  2022  and  2.7%  in  2023, 
which may partially account for the more buoyant private consumption. The high investment rate 
in the MMF forecast stems from the assumed full additionality of privately co-financed investment 
under the Plan.  

The  expected  labour  market  developments  in  the  MFF  are  more  favourable  than  the 
Commission expectations. According to the forecast by the Ministry of Finance, the number of 
employed is set to increase on average by around 1% in the period 2022-2024 and unemployment 
rate to decline from 5% in 2022 to 4.6% in 2023. The expected employment growth is above the 
Commission  forecast,  while  the  reduction  in  unemployment  is  broadly  in  line  with  that  of  the 
Commission. This suggests more favourable labour supply developments in the MFF forecast. The 
Commission projection acknowledges that the employment growth is limited in the medium term 
by  the  negative  demographic  trends.  Another  factor  that  constrains  higher  employment  rates 
according to the Commission is the shortage of skilled labour, skill mismatches and comparatively 
low  participation  rates,  combined  with  stark  regional  disparities.  The  MFF  macroeconomic 
scenario  envisages  a  continued  wage  growth  at  8.1%  in  2022,  7.4%  in  2023  and  7%  in  2024, 
somewhat below the Commission projections.  

Table 2: Comparison of macroeconomic developments and forecasts 

2.2. Challenges related  to sustainable growth, cohesion, resilience and policies for the 

next generation 

Smart, sustainable and inclusive growth  

Despite significant increase in recent years, labour productivity remains below half of the 
EU average. In 2020, labour productivity per hour worked increased by 0.3% and reached 48.8% 
of the EU average. Total  factor productivity is  also  picking up, outperforming the EU  average 

10 

20192020202420252026COMCOMCOMRRPCOMRRPCOMRRPRRPRRPRRPReal GDP (% change)4,0-4,44,03,73,74,83,93,7n.a.n.a.n.a.Employment (% change)0,3-2,30,00,10,91,10,61,2n.a.n.a.n.a.Unemployment rate (%)4,25,15,15,44,654,44,6n.a.n.a.n.a.HICP inflation (% change)2,51,22,82,96,35,63,92,7n.a.n.a.n.a.General government balance (% of GDP)2,1-4,0-3,6-4-2,8-5,5-2,1-3,6n.a.n.a.n.a.Gross debt ratio (% of GDP)20,024,726,7n.a.26,726,326,828,630,3n.a.n.a.20212022Source: Commission Winter Interim Forecast 2022 for GDP and HICP, Commission Autumn Forecast 2021 for other indicators (COM); Recovery and resilience plan (RRP)2023 
 
 
growth.  Broad-based  structural  reforms  and  additional  investments  are  needed  to  boost 
productivity and  achieve sustainable and inclusive growth,  especially in  the context  of adverse 
demographics, considerable skill shortages and rising regional disparities. The Next Generation 
EU  funds  and  Bulgaria’s  path  towards  euro  adoption  provide  unique  opportunities  for 
modernisation of the economy. Investments in the recovery and transformation and commitments 
to key reforms are expected to boost potential growth.  

The business environment is not supportive of investment and institutional quality is low. 
Bulgaria  ranks  low  in  the  World  Bank’s  Worldwide  Governance  Indicators  and  the  European 
Quality of Government Index. In addition, institutions remain among the least performing areas in 
the Global Competitiveness Index. Despite the progress in past years, Bulgaria still has to address 
issues related to effective criminal investigation and independence of the judiciary, and there are 
some weaknesses in public procurement. In the Single Market Scoreboard, Bulgaria keeps ranking 
low  compared  to  other  Member  States  on  the  account  of  underperformance  in  transparency, 
competition and efficiency dimensions of public procurement.  The country’s performance with 
regards  to  the  transposition  deficit  of  the  Single  Market  directives  and  on  infringements  is 
worsening.  Furthermore,  restrictiveness  of  some  regulated  professions  is  higher  than  the  EU 
average. 

There are longstanding challenges in the fight against corruption. In 2017 and 2018, Bulgaria 
carried out a comprehensive reform of its legal and institutional anti-corruption frameworks. The 
reforms  are  starting  to  bear  fruit  and  have  led  to  improved  cooperation  between  the  relevant 
authorities.  Nonetheless,  corruption  remains  a  problem,  and  the  protests  that  had  erupted  in 
summer 2020 revealed a widespread discontent in the society. The corruption perception surveys 
also show a very low level of public trust in the anti-corruption institutions, which should establish 
a  solid  reputation  of  impartiality,  objectivity  and  independence  in  the  exercise  of  their 
responsibilities. A solid track-record of final convictions in high-level corruption cases remains to 
be established, and sufficient resources should be provided to fight corruption effectively. Finally, 
the country does not yet have legislation on lobbying and protection of whistle blowers.  

The areas of efficiency and quality of justice also need further improvement. The persisting 
data  gaps,  which  can  be  solved  through  better  electronic  tools,  prevent  from  assessing  the 
efficiency of the justice system in a comprehensive manner. The COVID-19 pandemic has further 
highlighted the need for effective justice systems that can continue to function amidst a crisis. The 
resilience  of  the  national  justice  system  could  be  strengthened  by  deploying  secure  electronic 
communication  channels,  by  enabling  proceedings  to  take  place  via  videoconferencing,  and 
ensuring uninterrupted access to services provided by the judiciary via electronic means. 

The Bulgarian research and innovation performance is among the weakest in the EU. This 
represents a significant barrier for the country’s transition towards a knowledge-based economy. 
The weak performance of the public science base is a major bottleneck. The public research system 
continues to be characterized by a high level of institutional fragmentation, whilst public R&D 

11 

 
 
funding remains critically low. The outdated research infrastructure and a dwindling number of 
researchers,  alongside  unattractive  research  careers  and  an  ineffective  R&I  policy  governance 
constitute major challenges. The weak links between academia and business hamper knowledge 
and technology transfer. Moreover, insufficient incentives to commercialize research results and a 
misalignment of research policy with industry needs create barriers for public-private linkages. 
Finally, the uptake of digital technologies is slow in both public and private sectors. The uptake of 
digital technologies is slow in both public and private sectors. 

The stock and quality of physical infrastructure remains inadequate. This pertains to both the 
energy and water infrastructure, as well as to the weak transport connections (especially in the 
north of the country and some cross-border connections). Robust transport and energy networks 
would  help  companies  to  connect  with  global  markets  and  suppliers,  also  boosting  their 
productivity.  A  well-developed  and  sustainable  infrastructure  would  also  help  to  attract  more 
foreign direct investment, which can support the economy’s shift to a production of higher value-
added goods.  

Small  and  medium-sized  enterprises  (SMEs)  continue  to  face  many  difficulties.  Bulgaria 
underperforms with regards to the SME environment, particularly in the areas of entrepreneurship, 
skills,  innovation  and  digitalisation,  where  it  has  one  of  the  weakest  scores  in  the  EU.  So  far, 
measures in support of SME policies have had only a limited effect. On the positive side, access 
to  finance  has  been  relatively  good,  although  it  has  worsened  during  the  pandemic.  Access  to 
equity financing has been improving in recent years as well, but further improvements could foster 
the  creation  and  development  of  innovative  and  high-growth  companies.  With  the  COVID-19 
crisis,  liquidity  support  was  provided  by  the  government  in  the  form  of  grants,  loans  and 
guarantees.  

The performance of state-owned enterprises (SOEs) remains a source of concern. There are 
around 221 SOEs in  Bulgaria, spread across many  important  sectors such as  energy, transport, 
water and health. The financial and operational performance of SOEs is a source of risk for the 
national budget, while their inefficient and non-transparent operation can lead to distortions in the 
market and act as an obstacle to private investment. Improving the transparency and governance 
of SOEs would free up resources and increase the investment potential. Putting in place reforms 
of  the  overall  regulatory  framework  and  market  environment  in  which  these  SOEs  operate  is 
crucial for improving their performance, particularly in the energy and transport sectors. Bulgaria 
is currently implementing a major reform of the corporate governance framework of SOEs. This 
initiative was part of the government’s action plan to prepare for applying to the Exchange Rate 
Mechanism II (ERM II) and it is also included in the Plan. 

Bulgaria has been introducing measures to digitalise the tax administration and to improve 
the tax collection. In 2021, Bulgaria was amongst the countries with the most significant decreases 
in the VAT gap and there has been some progress with the collection of labour and fuel taxes as 
well.  However,  the  tax  compliance  burden  remains  high.  The  tax  rate  on  energy  is  the  second 

12 

 
 
lowest in the EU and there are no specific environmental targets related to tax policy. The green 
taxation in transport is underdeveloped and progress could be made in line with the ‘polluter pays’ 
principle to stimulate the demand for clean vehicles and gradually phase out polluting vehicles. 

Social resilience, healthcare and territorial cohesion 

In  the  longer  term,  adverse  demographic  developments  and  high  inactivity  rates  pose 
significant risks. Bulgaria is facing a double-trend of an ageing and a rapidly shrinking population 
(decrease  of  around  10%  over  the  last  decade).  Combined  with  high  inactivity  rates  for  some 
groups,  notably  those  living  in  rural  and  underserved  areas,  this  remains  a  key  challenge  for 
potential growth and for achieving a fair and an inclusive recovery. 

In the context of labour shortages, it is key to focus on activation measures, reskilling and 
upskilling. Bulgaria’s spending on overall active labour market policies is among the lowest in 
the  EU  and  skill  mismatches  relative  to  labour  market  needs  are  higher  compared  to  the  other 
Central and Eastern European Member States as well as to the EU average. Even the high-growth 
enterprises in Bulgaria exhibit shortages in human capital relative to the EU average4. The already 
very low rates of adult participation in learning and the lowest level of digital skills in the EU have 
worsened due to the pandemic. Participation in adult learning is particularly important considering 
that  the  low  skilled  account  for  17.5%  of  the  working-age  population.  Only  29%  of  the  adult 
population has basic digital skills (close to half of the EU average). The population’s participation 
in vocational education and training (VET) is also low. The digital and green transitions will bring 
new challenges but also potential opportunities for the development of the labour force.  

Access to quality education and low educational outcomes are major issues. Low participation 
in early childhood education and care also remains a major challenge. The rate of early school 
leaving is still high, particularly among disadvantaged groups, including Roma, and in rural areas, 
and influences the employability and labour markets outcomes. Although Bulgaria’s investment 
in  education  continued  to  increase  in  2019  but  was  still  one  of  the  lowest  in  the  EU.  In  2020, 
Bulgaria’s general government expenditure on education increased by 5%, reaching the equivalent 
of 4.0% of GDP and this was largely due to the increases in teachers’ salaries. At the same time, 
insufficient investments in pre-primary and primary education further widen inequalities among 
students  from  an  early  stage.  Educational  outcomes  are  low,  with  almost  half  of  Bulgaria’s 
teenagers lacking basic skills (against one out of five in the EU). Key reforms on pre-school, school 
education, adult learning and higher education, complemented by the corresponding investments, 
including in the IT infrastructure, would help to overcome gaps in the education area. 

4 Amaral-Garcia, S., Compano, R., Domnick, C., Fako, P., Gavigan J and Testa, G. (2022): High Growth Enterprises 
Demographics & Finance with a focus on venture capital: Factsheet - Germany, JRC128693 

13 

 
 
                                                           
 
Bulgaria  is  facing  high  income  inequality  accompanied  by  fragmented  and  relatively 
ineffective social benefits. The situation is particularly dire in terms of the risk of poverty and 
social exclusion, the poverty reduction impact of social benefits and inequality. The labour market 
impact of the COVID-19 crisis is expected to further worsen the situation, with direct long term 
knock-on effects for educational outcomes of children from disadvantaged families. The limited 
capacity  of  the  social  services  and  public  employment  services  and  the  lack  of  an  integrated 
approach affects their ability to improve the employability and social inclusion of the vulnerable 
groups.  

The pandemic has put under spotlight the structural challenges related to the sustainability, 
accessibility and capacity of the healthcare system. Total life expectancy in Bulgaria, at 73.6 
years,  is  7  years  below  the  EU  average.  Limited  access  to  health  care,  which  is  mainly  a 
consequence of high out-of-pocket payments, gaps in health insurance coverage, as well as unequal 
regional  distribution  and  low  number  of  health  professionals  (primarily  nurses),  has  been 
characteristic of the Bulgarian health system for many years. The system is hospital-centred to the 
detriment of ambulatory care. This is a result of low public expenditure on healthcare and public 
health (5.9 % of GDP in 2020, 2.1 percentage points below the EU average), covering only around 
60.6 % of total healthcare costs, against 79.5 % on average in the EU. The share of ‘out-of-pocket’ 
payments  (formal  and  informal)  is  therefore  the  highest  in  the  EU,  bringing  the  burden  of 
healthcare costs above the EU average. The effectiveness of the health care system in Bulgaria 
remains low in comparison to other Member States. Deaths from both preventable and treatable 
causes are well above the rates for the EU as a whole.  

There remain significant inter and intra-regional disparities in Bulgaria. Regional disparities 
have been increasing considerably since 2000, reaching a peak in 2010 and stabilising afterwards. 
The main driver is the concentration of economic activity in the capital  region of Sofia and its 
rapid development in 2000-2010. The capital region of Sofia (South-West) also attracts more than 
half of the foreign direct investment in the non-financial sector, which is mostly concentrated in 
the capital itself. The poorest performers are the North-Central and in particular the North-West 
region. Demographic developments also influence regional trends in GDP per capita. The NUTS2 
regions that were most affected by demographic changes over the last decade are the North-West 
(-28.8%) and North-Central (-23.1%). A balanced distribution of investments to the private sector, 
infrastructure and research and development may lead to a mitigation of regional disparities5.  

2.3. Challenges related to the green and digital transition  

Green dimension  

At  least  37%  of  the  financial  allocation  in  the  recovery  and  resilience  plans  needs  to 
contribute  to  the  green  transition.  The  measures  in  the  Plan  are  expected  to  contribute  to 

5 Crucitti, F., Lazarou, N., Monfort, P., and Salotti, S. (2021). A scenario analysis of the 2021-2027 European Cohesion 
Policy in Bulgaria and its regions. JRC Working Papers on Territorial Modelling and Analysis 06/2021, JRC126268. 

14 

 
 
                                                           
achieving the 2050 climate neutrality objective, and the 2030 energy and climate targets, taking 
into account Member States’ national energy and climate plans. They should also contribute to 
meeting  the  environmental  targets  for  waste,  water,  pollution  control,  sustainable  mobility, 
biodiversity protection and restoration, marine and water resources, and support the transition to 
sustainable  food  systems  as  well  as  to  a  circular  economy,  while  ensuring  that  nobody  is  left 
behind.  It will be essential that local and regional stakeholders from the coal regions are closely 
involved  in  the  implementation  of  the  measures  in  the  RRP  and  in  the  co-designing  of  further 
measures for the transition to climate neutrality. 

Renewable energy  

Bulgaria’s 2020 target on renewable energy of 16% is already achieved. In 2019 the share of 
consumption was 20.5%. The main source of renewable electricity is hydro, which accounted for 
more than half of renewable electricity production in 2018. In the heating sector, the source of 
renewable energy is heavily concentrated (96%) in solid biomass and biogas only accounts for 4%. 
This  puts  a  challenge  on  Bulgaria  to  further  decarbonize  the  sector,  while  maintaining  the 
environmental  requirements  for  biomass  and  air  quality.  Another  challenge  for  a  stronger 
penetration of renewables is the need for a more flexible and smarter electricity network. 

Bulgaria  aims  to  contribute  to  the  EU’s  2030  target  for  renewable  energy  by  reaching 
27.09% of renewable energy. This contribution is just above the 27% share calculated using the 
formula in Annex II to Regulation (EU) 2018/1999 on the Governance of the Energy Union and 
Climate Action (the ‘Governance Regulation’) setting out the national contributions for the share 
of energy from renewable sources. Additional policies and measures will be needed to achieve 
Bulgaria’s 2030 target. 

Energy efficiency 

Bulgaria  has  the  most  energy-intensive  economy  in  the  EU.  Energy  efficiency  will  become 
more  important  in  the  process  of  decarbonisation.  Energy  efficiency  measures  complement 
renewable  energy  deployment  in  reducing  the  carbon  emissions  and  in  increasing  Bulgarian 
competitiveness. Bulgaria’s aims to contribute to the EU 2030 energy efficiency target by reducing 
primary energy consumption by 27.9% and final energy consumption by 31.7% compared to the 
2007 reference scenario projections for 2030. Based on the underlying assumptions of the NECP, 
this translates into a contribution of 17.5 million tonnes of oil equivalent (Mtoe) for primary energy 
consumption and 10.3 Mtoe for final energy consumption. These energy efficiency contributions 
are considered to represent low ambition in terms of the primary and very low ambition in terms 
of the final energy consumption. 

Energy efficiency of the building stock remains a challenge. The NECP lists a number of key 
actions for building renovation with a quantitative objective of renovating a total of 22.2 million 
m2 by 2030, 49.6 million m2 by 2040 and 55.8 million m2 by 2050. According to Bulgaria’s Long-
Term  Renovation  Strategy  (LTRS),  energy  efficiency  funding  provided  through  Operational 

15 

 
 
Programmes until 2020 covers 8% of total financing necessary for the non-domestic sector, and 
9% in the residential sector. The estimated investment needed in the period 2021-2025 is €162m 
per year, rising to €314m per year in the period 2026-2030 – resulting in a total of €1.1 bn until 
2026. 

Energy poverty  

Energy poverty continues to be a widespread issue in Bulgaria. In 2020, 27.5% of the Bulgarian 
people  reported  they  were  unable  to  keep  their  homes  adequately  warm  and  22.2%  of  the 
population was unable to pay their utility bills on time due to financial difficulties. In particular 
people living in rural areas, which account for 32% of the population, have the lowest performance 
for the ability to keep the house adequately warm and having arrears on utility bills.  

Socio-economic impact of coal phase-out 

The  socio-economic  impacts  of  coal  phase  out  are  expected  to  be  high  for  affected  local 
communities. With about 43.1% of electricity produced by indigenous lignite and brown coal-
fired power plants, a significant number of workers will be affected by the necessary gradual coal 
phase out, giving rise to needs for reskilling and the creation of jobs. These socio-economic effects 
are especially expected to affect people living in coal regions, such Maritza, Pernik and Kyustendil. 
This calls for measures and programmes that aim to reskill the affected workforce, provide sectoral 
and geographic mobility support, and repurpose coal mining areas and coal-fired power plants in 
a way that creates new economic and employment opportunities. When defining the vision and 
steps for the transition to climate-neutrality in particular, it will be essential that local and regional 
stakeholders from the coal regions are closely involved in co-design and implementation. 

Air quality 

Air quality in Bulgaria is still a cause for severe concern. Bulgaria continues bearing significant 
health burden due to poor air quality. The Commission has referred the country to the Court of 
Justice of the EU (CJEU) for a second time because of its continued failure to comply with the 
PM10  limit  values  and  to  keep  the  period  of  exceedance  as  short  as  possible.  The  zones  with 
systematic and continuous PM10 exceedances since 2007 at least until 2019 cover a territory where 
approximately  95%  of  the  population  of  Bulgaria  lives.  The  main  sources  of  pollution  with 
particular matter (PM, dust) remain domestic heating sector using solid fuels and transport. The 
lignite-fired power plants are the cause of excessive sulphur dioxide pollution, which is subject to 
a litigation before the CJEU. The heavy reliance on biomass for renewable energy production in 
Bulgaria does not provide a suitable alternative to fossil fuels in this respect.  

Circular economy 

Bulgaria  has  not  yet  adopted  a  strategic  circular  economy  view.  With  2.4%  circular 
(secondary)  use  of  material,  Bulgaria  scores  significantly  lower  level  than  the  EU  average  of 

16 

 
 
11.9%6.  Bulgaria  also  has  the  EU’s  lowest  rate  of  resource  productivity.  Waste  management, 
including separate collection, remains a challenge. While there was some progress in closure and 
rehabilitation of non-compliant landfills, the process is still not completed and illegal landfilling 
remains an issue. The recycling rate of municipal waste is considerably lower than the EU average 
and  Bulgaria  remains  at  risk  of  not  meeting  the  EU  recycling  targets.  The  ‘pay-as-you-throw’ 
principle will only be enforced as of 1 January of the second year following the publication of the 
results of the 2021 census, and the unfair practice of not calculating waste collection fees on the 
basis  of  waste  generation  will  continue  beyond  2023.  There  is  no  national  waste  management 
registry in Bulgaria at present. Such a registry would increase the waste management standards 
and transparency in waste management – a sector prone to fraud and corruption.  

Water 

Little  progress  has  been  observed  in  achieving  compliance  with  the  drinking  water  and 
urban wastewater treatment directives. Following the start of a reform of the sector by Bulgaria, 
significant investments have been made through the Cohesion Policy. These have led to positive 
results such as the conclusion of 16 regional feasibility studies for water/wastewater investments, 
which  are  now  forming  the  basis  for  infrastructure  investments  across  the  country.  However, 
implementation  is  slow  and  needs  are  huge  with  large  investments  still  required  to  achieve 
compliance with the EU Directives, and to reduce the high level of water leakage due to old and 
poorly managed infrastructure. The water management reform is still to be completed in six of the 
28 NUTS3 regions. The consolidation aims to build the resilience of the sector, however, operators 
are in weak financial position and no reform has been put in place yet to ensure their viability and 
long-term sustainability and that of the network. The quality of ground water in Bulgaria is also 
deteriorating. Significant delays in updating Bulgaria’s marine strategy due in 2018 have led  to 
Bulgaria being referred to the Court of Justice of the EU.  

Biodiversity 

Threats  to  nature  and  biodiversity  remain.  While  Bulgaria  has  a  vast  and  diverse  natural 
protected areas (including over 34% of the territory covered by Natura 2000) and a high potential 
for  a  green  economy,  it  has  not  shown  much  commitment  to  exploiting  this  potential  in  a 
sustainable  way.  Bulgaria  has  not  yet  implemented  its  obligation  to  establish  site-specific 
conservation  objectives  and  measures  for  a  majority  of  its  sites.  In  addition,  the  appropriate 
assessment of the impacts of projects and plans on the Natura 2000 sites is not made according to 
standards. Cumulative impacts are systematically not taken into account, nor is the impact on the 
integrity  of  the  sites.  Many  developments  representing  a  major  threat  to  Natura  2000  sites, 
protected habitats and species have still been authorised, while at the same time Bulgaria reported 
that  in  the  period  2013-2018,  only  12.23%  of  its  habitat  types  and  38.06%  of  its  species  of 
Community interest were in favourable conservation status. These factors continue to present an 

6 Eurostat 2019 (https://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=env_ac_cur&lang=en) 

17 

 
 
                                                           
untapped  potential  for  economic  growth  based  on  the  development  of  sustainable  and  niche 
tourism  and  the  recreational  sector.  A  higher  use  of  green  infrastructure  and  ecosystem-based 
solutions would also bring significant benefits to the country in support of biodiversity while also 
addressing some impacts of climate change and contributing to improvements to air quality. 

Bulgaria was the worst performing Member State in the 2019 Eco-innovation index7 by a 
large margin. Certifying a number of companies with environmental management systems has 
not  led  to  a  significant  uptake  in  terms  of  green  products  offered  nor  eco-innovation.  Despite 
certain  success  with  some  waste  streams  (plastics  and  waste  from  electric  and  electronic 
equipment), the potential of a new circular business models is still to be explored. No progress has 
been made in terms of water savings and water reuse. 

Sustainable transport 

The limited development of the transport infrastructure and the slow progress on the Trans-
European  Transport  Network  (TEN-T)  affects  the  economic  and  social  development  of 
Bulgaria. This contributes to  significant  disparities between the different  regions  and a  North-
South divide. The TEN-T investments are crucial for a balanced socio-economic development and 
for  connectivity  with  neighbouring  countries.  An  important  regional  asset  for  transport,  the 
Danube River and the Black Sea, would both benefit from improved navigability and safety. The 
progress in completion of the TEN-T core network is very limited so far (12% completion at the 
end of 2021) and Bulgaria risks not meeting the target to complete the TEN-T core network by 
2030. Decisive action is needed to step up the capacity and resources to adequately prepare and 
implement TEN-T projects in line with related EU standards. 

Greenhouse gas emissions from road transport have increased over the last five years, raising 
concerns on the sustainability of transport. The GHG emissions from transport in Bulgaria have 
increased by 52% from 1990 to 2019. The European rail traffic management systems (ERTMS) 
and  intelligent  transport  systems  (ITS)  remain  underdeveloped.  The  railways  rolling  stock  is 
relatively old, and its modernisation would increase railway usage and speed and promote modal 
shift from roads. Sustainable mobility measures (e.g. electrification of public transport, promotion 
of electric and hybrid cars, deployment of charging infrastructure, low-emissions zones in large 
cities, clean public transport) would bring economic, health, and environmental benefits. Bulgaria 
is among the 10 Member States with the lowest number of newly-registered electric vehicles in 
the EU, and more effort is needed to develop the alternative fuels infrastructure and stimulate the 
demand  for  zero-emission  vehicles,  while  reducing  the  number  of  most  polluting  vehicles  in 
circulation.  

Road safety is a major issue. Bulgaria has one of the worst track records in the EU. In 2019, there 
were 90 deaths per million inhabitants in Bulgaria, vs an EU average of 51. Reforms improving 
the enforcement of rules, increasing vehicles’ inspections, promoting awareness and investments 

7 https://ec.europa.eu/environment/ecoap/bulgaria_en 

18 

 
 
                                                           
in infrastructure/vehicles safety and in the removal of blackspots are crucial to improve road safety, 
to reach the target of 50% reduction of victims by 2030 in line with the EU Road Safety framework. 
There is an urgent need to invest in safety upgrades of road tunnels, 4 of which are currently not 
compliant with the EU Tunnel Safety Directive and are subject to infringement proceedings. 

There are significant needs for sustainable urban transport projects, also outside the capital. 
The integration of different modes of transport, including sustainable public transport, would be 
beneficial. It is crucial to reflect the needs of population to travel for education and work in the 
local and regional road infrastructure and in the network of public transports, which would benefit 
from the development of a single ticket system to increase interoperability and ease of access. In 
less  developed  regions  outside  the  capital,  the  promotion  of  sustainable  public  transport  is 
important to enhance mobility and transport sustainability.  

Current  taxes  and  charges  linked  to  transport  do  not  cover  the  generated  costs.  Costs  of 
negative externalities in transport (accidents, congestion, air pollution, climate change, noise and 
habitat damage) are estimated to about EUR 7 billion annually for road, rail and inland waterways 
8,  while  the  total  revenue  from  all  land  transport  modes  amounts  to  about  EUR  4  billion 
(respectively 66% and 46% of the costs for passengers and freight). An electronic tolling system 
for  vehicles  over  3.5t  is  in  place  in  Bulgaria  since  March  2020.  Every  further  effort  on  the 
implementation  of  the  Directive  2019/520  (Electric  Tolling  System)  would  be  beneficial  in 
generating  revenues.  The  table  below  gives  an  overview  of  Bulgaria  objectives,  targets  and 
contributions under Regulation (EU) 2018/1999 of the European Parliament and of the Council of 
11 December 2018 on the Governance of the Energy Union and Climate Action. 

8 https://ec.europa.eu/transport/themes/sustainable-transport/internalisation-transport-external-costs_en 

19 

 
 
 
 
                                                           
Table 3: National targets and contributions 

National targets and contributions  

Binding target for greenhouse gas 
emissions compared to 2005 under the 
Effort Sharing Regulation (%) 

National target/contribution for 
renewable energy: Share of energy from 
renewable sources in gross final 
consumption of energy (%) 

Latest 
available 
data 

2020 

2030 

Assessment of 2030 
ambition level 

21% 

20% 

0 

As in ESR 

20.5 

21.4 

27.09 

Sufficiently 
ambitious 
(Above RES 
formula of 27%) 

National contribution for energy efficiency: 

Primary energy consumption (Mtoe) 

18.34 

16.9 

17.5 

Low ambition 

Final energy consumption (Mtoe) 

9.9 

8.67 

10.3 

Very low ambition 

Level of electricity interconnectivity (%) 

7.1 

11.3 

15 

N/A 

Source: Assessment of the final national energy and climate plan of Bulgaria 

Digital dimension  

The  Plan  should  contribute  to  the  digital  transition  and  at  least  20%  of  the  financial 
allocation needs to contribute to digital objectives. The measures in the Plan should, inter alia, 
contribute  to  the  digital  transformation  of  the  economic  and  social  sectors  (including  public 
administration, public services, and the justice and health systems). The objective of the measures 
in the Plan should be to improve not only the competitiveness, but also the resilience, agility and 
security of companies and public actors, all while ensuring inclusiveness. 

Bulgaria ranks 26th among the 27 EU Member States in the Digital Economy and Society 
Index (DESI) 20219. Bulgaria lags significantly behind in all digital areas compared with the EU 
average. Although its performance in absolute values has increased since 2019, it ranks lower than 
before due to the better performance of its peers. This situation reflects the need for a step change 
in digital policies. 

9 https://digital-strategy.ec.europa.eu/en/policies/desi-bulgaria 

20 

 
 
 
 
 
 
 
 
 
                                                           
Chart 1: DESU Scoreboard 2021 

connectivity,  Bulgaria 

scores 
On 
particularly  poorly.  The  country  ranks 
26th among EU countries with a score of 38 
against  the  EU  average  of  50.  Bulgaria 
scores only 59% in overall broadband take-
up  of  households  subscribing,  which  is 
below  the  EU  average  of  77%  and  is 
significantly  below  the  EU  average  as 
regards  the  take-up  of  high-speed  fixed 
broadband  of  at  least  100  Mbps  (15%, 
against an EU average of 34%). While there 
has  been  some  increase  in  the  very  high 
capacity  network  (VHCN)  coverage  in 
recent years, Bulgaria (43%) still has a significant gap to overcome to reach the EU average (59%), 
while VHCN coverage in rural areas is only 1%. 5G coverage it is at 0% compared to 14% EU 
average. Take-up of mobile broadband is still low at 63%, compared to an EU average of 71%. As 
regards 5G readiness, Bulgaria has made significant progress with the completion of 5G auctions 
in  some  bands  (20.55%  compared  to  the  EU  average  of  39%),  although  there  is  still  a  lack  of 
sufficient spectrum in certain bands. Other 5G pioneer bands should be assigned on a timely basis, 
under conditions conducive to investment. 

Bulgaria  ranks  21st  in  the  EU  in  digital  public  services.  Concerning  digital  public 
administration,  the  outdated  legal  framework  remains  a  major  obstacle.  E-government  users 
represent only 36% of internet users, well below the EU average of 64%. This is consistent with 
the score of 57 on the provision of digital public services for citizens, for which the EU average is 
75. In contrast, digital public services for businesses have a score of 87, slightly above the EU 
average of 84. Bulgaria performs at the EU average level on open data.  

However,  digital  public  services  for  enterprises  and  the  use  of  open  data  by  public 
administrations are slightly above the EU average. A national strategy in this domain and the 
activity  of  the  national  state  e-government  agency  have  delivered  promising  improvements. 
Several  actions  have  been  taken  to  engage  with  people  to  encourage  take-up  of  e-government 
services (supported by EU funds). Electronic identification and electronic signatures are still facing 
delays,  although  there  are  other  means  of  identification  in  place.  Systems  to  support  e  health 
solutions  were  prioritised  to  support  health  administration  processes  and  the  COVID-19 
vaccination campaign. 

On digital skills, Bulgaria ranks last in the 27 EU countries. The overall level of basic digital 
skills in Bulgaria is the lowest in the EU; people with at least basic digital skills account for 29% 
of the total Bulgarian population aged 16 to 74, against an EU average of 56%. Only 11% of people 
have above basic skills, slightly less than a third of the EU average. Furthermore, most businesses 
report difficulties filling vacancies for ICT specialists. ICT specialists account for 3.3% of total 

21 

 
 
employment. This marks an increase compared to 2019, bringing it back to the levels of 2018, 
albeit a small one in proportion to the workforce given the labour market shortages and the faster 
increase of the EU average (which now stands at 4.3%). In contrast, women account for 28% of 
all ICT specialists, making Bulgaria a leader for this indicator within the EU. 

Overall, basic digital skills remain a significant challenge among the population. Enterprises 
still have difficulties in matching the skills they need to the available competences and skills of 
the workforce. Increasing the number of Bulgarian ICT specialists and reskilling the labour force 
are both of great importance for Bulgaria if it is to fully take advantage of the digital transition. 

Bulgaria’s  performance  regarding  the  integration  of  digital  technology  in  enterprises  is 
mixed  and  it  ranks  last  among  EU  countries.  There  is  a  relatively  high  uptake  of  artificial 
intelligence, used by 31% of enterprises, which is well above the 25% EU average. At the same 
time, only 33% of SMEs have at least a basic level of digital intensity (while 60% do so in the EU 
on average). Only 8% of Bulgarian SMEs sell online (below the EU average of 17 %), only 3% of 
SMEs are selling across borders (versus 8% in the EU) and only 3% of turnover comes from the 
online  segment  (against  12%  in  the  EU).  6%  of  enterprises  use  big  data  compared  to  14%  on 
average  in  the  EU.  Bulgaria  launched  several  successful  initiatives  in  several  pioneering 
technologies,  e.g.  high-performance  computing,  quantum  communication  research  and 
development. However, the integration of digital technologies is uneven across regions, and small 
enterprises show a significant delay in this respect. Policies for the digitalisation of enterprises that 
support regional balance and all SMEs are crucial and should be further pursued. 

Chart 2: DESI 2021 ranking 

22 

 
 
 
 
 
 
 
Box 1: Progress towards the Sustainable Development Goals 

Sustainable  Development  Goals  and  the  four  dimensions  underpinning  the  Annual  Sustainable 
Growth Strategy 

The objectives of the Sustainable Development Goals (SDGs) are integrated in the European 
Semester  since  the  2020  cycle.  This  provides  a  strong  commitment  towards  sustainability  in 
coordination of economic and employment policies in the EU. In that respect, this section outlines 
Bulgaria’s performance with respect to SDGs with particular relevance for the four dimensions 
underpinning the 2021 Annual Sustainable Growth Strategy and of relevance to the recovery and 
resilience plans (green transition, fairness, digital transition and productivity, and macroeconomic 
stability), indicating possible areas where investments and reforms in line with the objectives of 
the Facility could further accelerate the progress on the SDGs. 

The  SDGs  are  represented  under  a  specific  Commission  guiding  principle  for  competitive 
sustainability  from  the  2021  Annual  Sustainable  Growth  Strategy,  to  which  they  are  strongly 
associated.  It  should  be  noted  that  most Sustainable  Development  Goals  contribute,  to  varying 
degrees, to several guiding principles. 

Bulgaria is improving on most SDG indicators related to green transition. Even though there 
is improvement (SDG 2, 6, 7, 9, 11, 13), challenges remain in some areas (especially in SDG 12). 
On the other hand, the country performs well on SDGs 15 and 17. The ‘responsible consumption 
and production’ indicators (SDG 12) rate way below the EU average with the ‘circular material 
use  rate’  shrinking  from  3.1%  of  the  material  input  for  domestic  use  in  2015  to  2.6%  in  2020 
(compared to  12.8% in  the EU) or the ‘generation of waste excluding major mineral  waste’ of 
3097 kg per capita (1820 being the EU average). Also the ‘average CO2 emissions per km from 
new passenger cars’ exceeds the EU average of 108.2 g CO2 per km by 24.8 g. In addition, the 

23 

 
 
 
‘sanitation’ indicator (SDG 6), in spite of some improvement, remains below the EU average with 
7% of population (in 2020) ‘having neither a bath, nor a shower, nor indoor flushing toilet in the 
household’  (compared  to  11.1%  in  2015  and  1.6%  of  the  EU  average  in  2019)  and  64.5%  of 
population (in 2020) ‘connected to at least secondary wastewater treatment’ (while the EU average 
was 80.9% in the same year). On ‘affordable and clean energy’ (SDG 7), Bulgaria has achieved 
some progress in regards to the share of renewable energy in total energy consumption (increase 
from 18.3% in 2015 to 23.3% in 2020) and is in line with the EU average in this indicator (22.09 
% in 2020). While Bulgaria outruns the EU average on the ‘energy import dependency’ (BG 37.9% 
of imports in gross available energy compared to 57.5% in the EU), it shows challenges when it 
comes to ‘access to affordable energy’ with 27.5% (2020) of the population ‘unable to keep home 
adequately warm’ (EU average: 8.2% in 2020).  

Bulgaria underperforms in all indicators related to no poverty (SDG 1). Although Bulgaria is 
improving on some SDG indicators related to fairness (SDG 1, 2, 3, 8), this is often from a low 
level and it needs to catch up on others (SDG 4, 5, 10). Despite progress made on the percentage 
of ‘people at risk of poverty or social exclusion’ (33.6% of population in 2020 compared to 43.4% 
in 2015; the EU average in 2020: 21.9%) as well as on the percentage of ‘severely materially or 
socially deprived people’ (22.5% in 2020 compared to 36.8% in 2015 and the EU average in 2020: 
6.8%), there is still room for improvement to catch up with the performance in the EU. It is equally 
the  case  for  the  ‘in-work  at-risk-of-poverty  rate’,  where  a  deterioration  is  observed  (9.6%  of 
population aged 16 or over in 2020 compared to 7.7% in 2015). While Bulgarians enjoy a longer 
‘healthy life years at birth’ (SDG 3) (66.3 years in 2020 compared to EU 64.6), they are more often 
victims of ‘standardised avoidable mortality’ (2018: 414.5 per 100 000 persons compared to EU 
252.1 in 2017) as well as ‘fatal accidents at work’ (2019: 3.37 per 100 000 persons compared to 
EU 1.74) or ‘road traffic deaths’ (rate of 9 in 2019 compared to 5.1 in EU). On ‘quality education’ 
(SDG 4),  Bulgaria shows rather ‘low  achievements  in  reading’  (47.1% of 15-year-old  students 
with low achievements in 2018 compared to EU average of 22.5% in the same year) and an above-
average amount of ‘early leavers from education and training’ (in 2020: 12.8% of population aged 
18 to 24). There is room for improvement also when it comes to ‘gender equality’ (SDG 5), as 
only  12.9%  of  board  members  (senior  management)  are  female  compared  to  29.5%  in  the  EU 
(2020). 

Concerning  the  productivity  related  SDGs,  Bulgaria  does  not  perform  well.  On  ‘Industry, 
innovation, and infrastructure’ (SDG 9), Bulgaria performs below the EU average on the gross 
domestic  expenditures  on  R&D  ranking,  with  0.86%  in  2020  compared  to  the  EU  average  of 
2.32%. The expenditure share has been increasing between 2016 and 2020, albeit at a very slow 
rate. The share of research personnel in Bulgaria is almost twice lower than in the EU in general. 
The country is seriously lagging behind in patent applications, with only 7.5 per million inhabitants 
sent  to  the  European  Patent  Office  in  2020,  compared  to  an  average  of  147  at  EU  level.  The 
performance on SDG 8 ‘Decent work and economic growth’ is also weak. In particular, ‘real GDP 
per capita’ is the lowest in the EU and ‘resource productivity’ is the second lowest in 2020. On 

24 

 
 
digital skills (SDG 4), Bulgaria had the lowest share of adults having at least basic digital skills in 
the EU in 2019. 

Bulgaria  is  improving  on  SDG  indicators  related  to  macroeconomic  stability  (8,  16)  and 
performs well on SDG 17. While Bulgaria is moving towards the EU average on indicators related 
to ‘decent work and economic growth’ (SDG 8), several challenges remain in this field. The real 
GDP per capita of EUR 6380 remains well below the EU average (EUR 26380). Also not only 
does the ‘investment share of GDP’ (last value given: 18 .5% of GDP in 2017) rank below the EU 
average of 22.3% but it has even shrank compared to 2012 (21,3%). On the other side, Bulgaria is 
much less indebted other EU countries (average: 90.1 % of GDP). In addition, Bulgaria has shown 
some improvements on the ‘peace, justice and strong institutions’ indicators (SDG 16). While still 
below  the  EU  average,  the  country  has  made  some  progress  when  it  comes  to  the  ‘peace  and 
personal  security’ with  a decrease in  the  ‘population  reporting  crime, violence or vandalism  in 
their area’ (from 26.3% in 2015 to 19.1% in 2020 (EU average: 13.2% in 2015 and 11% in 2019). 
On the other hand, there has been no change when it comes to the ‘standardized death rate due to 
homicide’ (1.2 per 100 000 persons both in 2013 and 2018 (EU average: 0.9 in 2013 and 0.7 in 
2017).  

25 

 
 
 
 
3.  OBJECTIVES, STRUCTURE AND GOVERNANCE OF THE PLAN 

3.1. Overall strategy of the plan  

The  Plan  of  Bulgaria  is  a  wide-ranging  response  to  the  economic  repercussions  from  the 
COVID-19 pandemic. It targets the main challenges and systemic weaknesses of the economy. It 
builds  on  the  country’s  global  vision  “National  Development  Programme  BULGARIA  2030”, 
which proposes solutions for growth and development by setting out strategic objectives such as 
an accelerated economic development,  a demographic upswing  and a  reduction of inequalities. 
Even though the government had adopted BULGARIA 2030 before the outbreak of the pandemic, 
the strategic choice of objectives remains valid, as the identified socio-economic vulnerabilities 
either persist or have worsened in the last two years. At the same time, the Plan aims to extend the 
scope of the set of reforms and investments to other dimensions, while ensuring coherence with 
measures planned in parallel under the EU Cohesion Policy. 

The  Bulgarian  Plan  is  composed  of  twelve  components  grouped  in  four  policy  pillars:  i) 
Innovative Bulgaria; ii) Green Bulgaria; iii) Connected Bulgaria; and iv) Fair Bulgaria. 

Innovative Bulgaria includes reforms and investments aimed at contributing to a shift towards a 
knowledge-based  economy  grounded  on  smart  growth,  in  order  to  increase  competitiveness.  It 
includes measures in  the fields  of  education, digital skills,  science, innovation, technology and 
their interconnections. This pillar is divided in 3 components: 

  Component 1: Education and skills (total financial envelope of EUR 733.5 million). 
The  policy  objective  is  to  increase  the  quality  and  coverage  of  education  and  training, 
improving  the  skill  set  of  the  workforce  to  adapt  to  technological  transformation  in  the 
labour market. It includes investments in the modernisation of educational institutions and 
youth centres, a comprehensive education reform, covering pre-school, school and higher 
education, the creation of a national STEM environment for skills of tomorrow and the 
establishment  of  a  national  online  platform  for  adult  learning,  covering  upskilling  and 
reskilling  of  the  population.  The  component  contributes  to  addressing  country-specific 
recommendations related to employability by enhancing skills, including digital skills and 
improving  the  quality  and  equal  access  to  education  and  training  (country-specific 
recommendation 4 from 2019 and 2 from 2020). 

  Component 2: Research and innovation (EUR 211.3 million). The policy objective is 
to  provide  a  favourable  environment  for  the  development  of  innovative  enterprises, 
creating  conditions  for  businesses  to  pursue  new  products,  processes  and  services, 
improving the innovation output of Bulgaria and, consequently, economic growth in the 
medium and long term. The component contains a reform of the Bulgarian research and 
innovation ecosystem, through the adoption of the Research and Innovation Act, aimed at 
defining the legal parameters of innovation policy funding, and the establishment of the 
Innovation Board, an advisory body to the relevant ministries on research and innovation 
policy.  The  component  further  includes  investments  in  science  and  innovation  in  a 

26 

 
 
programme  for  accelerating  economic  recovery  and  transformation  and  in  projects  to 
enhance  the  innovation  capacity  of  the  Bulgarian  Academy  of  Sciences  (BAS).  The 
measures  address  country-specific  recommendations  focusing  on  investment-related 
economic policy on research and innovation (CSR 3, 2019) and streamlining and accelerate 
the procedures to provide effective support to small and medium-sized enterprises and self-
employed (CSR 3 of 2020). 

  Component  3:  Smart  industry  (EUR  800.7  million).  The  reforms  and  investments 
included in this component aim to create favourable conditions for private investment in 
Bulgaria. In particular, the component aims to attract industrial investments and develop 
industrial  ecosystems  and  support  small  and  medium-sized  enterprises  and  mid-
capitalisation companies in modernising their technology and in their transition to green, 
circular and digital-oriented business practices. The investments  include the setup of an 
economic transformation programme (with a budget of EUR 690 million, almost 10% of 
the entire Bulgarian Plan, a far-reaching support programme for businesses composed of 
grants  and  financial  instruments),  and  a  support  program  for  the  infrastructural 
development  of  industrial  parks  and  zones.  The  measures  address  country-specific 
recommendations  focusing  on  investment-related  economic  policy  on  research  and 
innovation  (CSR  3,  2019)  and  streamlining  and  accelerate  the  procedures  to  provide 
effective support to small and medium-sized enterprises and self-employed, also ensuring 
their continued access to finance and flexible payment arrangements (CSR 3, 2020). 

Green Bulgaria includes reforms and investments  focusing on the sustainable management of 
natural resources, biodiversity, sustainable agriculture and a transition to a low carbon economy. 
This pillar is divided in 3 components: 

  Component  4:  Low-carbon  economy  (EUR  2  612.5  million).  The  objective  of  the 
component is to address the main challenges of the Bulgarian energy sector in terms of 
decarbonisation,  renewables  share,  energy  efficiency  and  internal  energy  market.  In 
particular, it aims to accelerate the decarbonisation of the energy sector by setting-out a 
date for the coal phase-out, while facilitating the deployment of renewables and alternative 
energy sources, such as green hydrogen and biogas, setting ambitious targets for expanded 
storage capacity for solar and geothermal electricity and a series of market liberalization 
reforms on wholesale and retail markets to allow for greater competition and easier market 
access for renewables. The component also supports measures related to the renovation of 
the stock of residential and non-residential buildings (the biggest measure of the Plan at 
EUR 924 million). The component addresses the recommendations related to the energy 
infrastructure and energy efficiency (CSR 3, 2019) and the progressive decarbonisation of 
the economy, including in the coal regions (CSR 3, 2020). 

  Component 5: Biodiversity (EUR 47.5 million). The objective is to reform the strategic 
framework in the field of biodiversity and ensure effective management of the National 
Ecological Network in order to protect and restore ecosystems, natural habitats and species 

27 

 
 
of  European  and  national  importance.  The  component  contributes  to  addressing  the 
country-specific recommendations on focusing investment on environmental infrastructure 
(CSR 3 of 2020). 

  Component  6:  Sustainable  agriculture  (EUR  233.8  million).  The  reforms  and 
investments  aim  at  enhancing  the  sustainable  management  and  competitiveness  of  the 
Bulgarian agricultural sector in the context of the green transition. It includes updating the 
strategic framework of the agricultural sector and investments to support farmers  in the 
implementation of activities ensuring the protection of the environment and climate change 
mitigation,  introducing  innovative  production  and  digital  technologies,  agricultural 
production  and  organisation  technologies,  the  automation  of  work  processes,  the 
shortening  of  supply  chains  and  the  conservation  of  genetic  resources.  The  component 
contributes  to  the  steering  of  investments  and  investment-related  policies  to  the  green 
transition (CSR 3 of 2019 and CSR 3 of 2020). 

includes 

Connected  Bulgaria 
the 
competitiveness and sustainable development by improving transport and digital connectivity, as 
well as promoting regional development through the endogenous and specific local potential. This 
pillar is divided in 3 components: 

focusing  on  enhancing 

reforms  and 

investments 

  Component 7: Digital connectivity (EUR 385.2 million). Reforms in this component are 
related  to  the  development  and  implementation  of  an  effective  policy  and  regulatory 
framework,  the  efficient  use  of  the  radio  frequency  spectrum  and  the  creation  of  a 
favourable  investment  environment.  The  investments  foreseen  involve  the  large-scale 
deployment of digital infrastructure, the digital transformation of the Bulgarian post and 
the development of the digital TETRA system and radio relay network. The component 
directly or indirectly contributes to addressing country- specific recommendations related 
to  the  reinforcement  of  digital  skills  (CSR  4,  2019);  the  promotion  of  digital  skills  and 
equal access to education (CSR 2, 2020); the need to focus investments on the green and 
digital  transition  (CSR  3,  2020);  and  the  effectiveness  of  public  administration  and 
reinforcement of digital government (CSR 4, 2020). 

  Component 8: Sustainable transport (EUR 665.8 million). The main objective of the 
component is to enhance the sustainability of the transport sector by reforming the road 
and  railways  sectors,  promoting  zero-emission  vehicles,  enhancing  road  safety,  and 
investing in railways, intermodal transport and sustainable urban mobility. This includes 
investments in the modernisation and digitalisation of railways, new zero-emission rolling 
stock, European Rail Traffic Management System deployment, a new intermodal terminal 
in Ruse and clean public transport (Sofia metro and pilot programme for sustainable urban 
mobility). The component is expected to contribute to the green and digital transition, as 
well  as  to  a  more  balanced  territorial  growth.  The  reforms  and  investments  address  the 
country-specific recommendations conveyed to Bulgaria in 2019 and 2020 on the need to 
focus investments on sustainable transport. 

28 

 
 
  Component 9: Local development (EUR 211.1 million). This component aims at setting 
the  framework  for  improving  the  competitiveness  and  sustainable  development  of  the 
regions of the country and promoting local development. It also targets water management, 
which is an important aspect of the green transition. It includes reform introducing a new 
regional  approach  with  direct  involvement  of  local  communities  in  the  management  of 
European  funds  and  instruments,  as  well  as  investments  in  water  supply  and  sewage 
systems,  digitalisation  of  the  management,  control  and  use  of  water.  Reforms  and 
investments  address  the  country-specific  recommendations  related  to  the  regional 
disparities and investment-related policies on water and on environmental infrastructure 
(CSR 3 of 2019 and CSR 3 of 2020). 

Fair  Bulgaria  includes  reforms  and  investments  focusing  on  the  inclusiveness  and  shared 
prosperity,  particularly  for  disadvantaged  groups.  It  also  focuses  on  building  effective  and 
accountable public institutions oriented towards the needs of citizens and businesses. This pillar is 
divided in 3 components: 

  Component 10: Business environment (EUR  188.1 million). This component aims to 
strengthen the potential for sustainable growth and increase the overall resilience of the 
Bulgarian  economy  by  addressing  challenges  in  the  overall  business  environment  and 
improving the institutional framework. It includes reforms and investments in areas such 
as  justice,  the  fight  against  corruption,  the  digitalisation  of  the  public  administration, 
strengthening the governance of state-owned enterprises, the anti-money laundering and 
insolvency frameworks, the quality of legislative process, public procurement, and audit 
and control mechanisms. There are also legislative measures for protecting whistleblowers 
and regulating lobbying. The measures included in the component contribute to improving 
business environment (CSR 3 of 2019) and the effectiveness of public administration and 
reinforcement of digital government (CSR 4 of 2020). 

  Component 11: Social inclusion (EUR 440.4 million). This component of the Plan aims 
to  foster  social  inclusion  by  improving  social  protection  and  service  provision, 
encompassing  a  reform  of  the  minimum  income  scheme  to  improve  its  coverage  and 
adequacy and the development of new tools for the Social Assistance Agency and for the 
Employment Agency, which are expected to move forward the integration of employment 
and  social  services.  It  also  contains  measures  to  reform  long-term  care  provision  in 
Bulgaria, support the provision of assisting devices to people with disabilities and promote 
the  social  economy  and  cultural  and  creative  sectors.  The  component  contributes  to 
addressing  the  country-specific  recommendation  to  address  the  shortcomings  of  the 
minimum  income  scheme  (CSR  2  2020  and  4  2019),  as  well  as  to  improve  access  to 
integrated employment and social services (CSR 4 2019). 

  Component 12: Healthcare (EUR 367.9 million). This component aims to improve the 
provision and availability of health services across Bulgaria. It includes investments in the 
health sector across the territory, the construction of outpatient care units, the establishment 

29 

 
 
of an air ambulance system, as well as reforms and investments addressing shortages of 
healthcare  professionals,  including  their  unbalanced  geographical  distribution.  The 
enhancement of e-health and digital innovation in healthcare is expected to be supported 
by the implementation of the full National Health Information System and the development 
of digital platforms, including for the diagnostics of diseases. The component contributes 
to  addressing  the  country-specific  recommendations  to  mobilize  adequate  financial 
resources to strengthen the resilience, accessibility and capacity of the health system, and 
ensure a balanced geographical distribution of health workers (CSR 1 2020), as well as to 
improve access to health services and addressing shortages of health professionals (CSR 4 
2019). 

Table 4: Table of components and associated costs. 

Component 
Innovative Bulgaria 

1: Education and skills 
2: Research and innovation 
3: Smart industry 

Green Bulgaria 

4: Low-carbon economy 
5: Biodiversity 
6: Sustainable agriculture 

Connected Bulgaria 

7: Digital connectivity 
8: Sustainable Transport  
9: Local development 

Fair Bulgaria 

10: Business environment 
11: Social inclusion 
12: Healthcare 

Total 

Costs (EUR million) 

733.5 
211.3 
800.7 

2 612.5 
47.5 
233.8 

385.2 
665.8 
211.1 

188.1 
440.4 
367.9 
6 897.9 

3.2. Implementation aspects of the plan  

Complementarities with other EU funds 

The Plan is structured so as to complement projects funded via other EU funds. The Bulgarian 
Plan describes complementarities and synergies with other EU funds, including ESF+, ERDF and 
Cohesion Fund. This is likely to have a significant potential impact on the Bulgarian economy, as 
Bulgaria  is  one  of  the  main  beneficiaries  of  EU  funds,  measured  as  share  of  GDP,  over  the 
financing  period  2021-2027.  The  2021-2027  Partnership  Agreement  with  Bulgaria  and  the 
cohesion policy programmes are at advanced stages of preparation, but not yet adopted. Therefore, 
some  areas  of  support  indicated  in  the  Plan  might  be  subject  to  changes.  However, 

30 

 
 
 
 
 
 
 
complementarities  are  particularly  relevant  in  the  field  of  research  and  innovation,  business 
environment for small and medium enterprises, circular economy, waste and water management, 
energy, transport, education, labour market, social inclusion and healthcare.  

A number of reforms and investments are complementary to investments financed by the 
ESF+. ESF+ interventions are expected to focus on strengthening the quality and inclusiveness of 
education and training as well as access to employment, upskilling and reskilling measures and on 
actions  to  improve  the  capacity  and  effectiveness  of  public  employment  services  and  social 
services,  thus  complementing  a  significant  subset  of  measures  in  the  Plan.  Namely, 
complementarities are expected in the areas of education and training, provision of employment 
and social services, including long-term care, and healthcare, including the provision of outpatient 
care across the territory of Bulgaria. In a number of components, the Plan covers measures related 
to  the  construction  and/or  renovation  of  buildings  and  development  of  IT  systems,  which  are 
expected to  be complemented by ESF+ support of training and/or other  measures targeting the 
development of human capital. For instance, the education component covers the set-up of science, 
technology, engineering, and mathematics (STEM) laboratories in schools, while the trainings of 
the  teachers  should  be  covered  via  ESF+.  A  similar  demarcation  also  applies  to  newly  built 
facilities  providing  long-term  care  and  the  training  of  their  staff.  In  the  area  of  healthcare,  the 
investment in outpatient units in the Plan is expected to be complemented by a relocation package 
covering the costs of medical professionals who will work in those units located in remote areas. 
Finally, both the Plan and the ESF+ are expected to fund trainings in digital skills but will target 
different participants on the basis of their labour market status. In addition, under ESF+, targeted 
and  mainstream  measures  are  envisaged  for  marginalised  communities,  including  Roma,  to 
promote better access to education, social inclusion and labour market integration. Support will be 
provided to improve access to services, including family or community ones, as well as healthcare 
and prevention.  

The Plan will also complement investments planned with the ERDF, cohesion fund and Just 
Transition Fund (JTF) notably in the areas of environment, transport, regional development, 
health and energy. For example, the ERDF and cohesion fund will finance water and waste water 
investments  in  larger  agglomerations,  while  the  Plan  will  focus  on  smaller  agglomerations.10 
Cohesion  policy  will  complement  the  biodiversity  reforms  and  investments  in  the  Plan  by 
supporting the newly established Natura 2000 management bodies and through the development 
of management plans once all Site-Specific Conservation Objectives (SSCOs) for the country have 
been  developed.  The  Plan  will  focus  on  ecosystems  while  the  cohesion  policy  will  invest  in 

10Larger  agglomerations  are  defined  as  agglomerations  above  10  000  population  equivalent,  while  smaller 
agglomerations are agglomerations between 5 000 and 10 000  population equivalent. Population equivalent is the 
technical term used in waste water projects. In particular, it refers to the amount of oxygen—demanding substances 
whose oxygen consumption during biodegradation equals the average oxygen demand of the waste water produced 
by one person.  

31 

 
 
 
 
                                                           
conservation measures for species and habitats.  As regards the circular economy, the  Plan will 
focus on business while cohesion policy investments will prioritise investments in municipal waste 
management to ensure investments in the higher echelons of the waste management hierarchy and 
measures to incentivize behavioral change. In the area of transport, cohesion policy will further 
develop  the  core  and  comprehensive  Trans-European  Transport  Network  (road  and  rail 
infrastructure) while the Plan will focus on zero-emission rolling stock, electric mobility, Sofia 
metro and an intermodal terminal in the north of the country. The ERDF will promote a bottom-
up, place-based approach to regional development through integrated territorial investments which 
will  be  supported  by  the  reforms  in  the  Plan,  notably  through  the  development  of  integrated 
territorial  strategies  and  integrated  municipal  development  plans  and  the  involvement  of  the 
Regional Development Councils in the pre-selection of project ideas. Energy efficiency projects 
including replacement of fossil-fuel based heating systems will be financed by both the Plan and 
Cohesion policy, with either a territorial or project level demarcation. Major energy projects under 
the  Plan  will  be  supplemented  by  the  Just  Transition  Fund.  The  latter  will  mitigate  the  socio-
economic impact of the transition to a climate neutral economy in the coal regions. In particular, 
investments should focus on economic diversification, upskilling and reskilling of workers who 
will be impacted by the transition, as well as on investments to mitigate the environmental impacts 
of the transition following the cessation of some activities or decommissioning of facilities. 

In  the  areas  of  research  &  innovation  and  small  and  medium  enterprises  (SMEs),  the 
different EU instruments will be complementary and synergies will be sought. In particular in 
the field of R&I, the measure included in the Plan will focus on developing a national research and 
innovation ecosystem to bolster the country’s smart economic transition at national and regional 
level. This will be achieved by strengthening the interaction with business, providing support to 
research universities, and stepping up efforts to enhance the innovation capacity of the Bulgarian 
Academy of Sciences (BAS) and its specialisation in key development areas such as green and 
digital technologies. Sectoral support for the design, implementation and evaluation of research 
and innovation policy reforms will also be available via the Horizon Policy Support Facility. In 
addition,  the  Plan  will  support  five  strategic  industrial  parks  by  financing  their  infrastructures, 
while  cohesion  policy  funds  will  complement  the  effort  with  industrial  parks  of  regional 
importance implemented as part of integrated territorial investments. For what concerns SMEs, 
the support schemes to investments included in the Plan will be complemented by other measures 
funded under ERDF.  

The Plan will also exploit synergies with the activities supported under the Technical Support 
Instrument  (TSI).  Namely,  the  TSI  will  provide  technical  support  for  the  development  of  a 
National Skills Strategy and of a strategy for Financial Literacy, both relevant in the context of 
addressing  the  skill  relevance  of  the  Bulgarian  population.  These  Strategies  complement  the 
effectiveness of some of the investments included in the Bulgarian Plan, namely the investments 
in STEM centers, in the platform for adult learning, and in the youth centres. In addition, the TSI 
will also cover the strengthening of a Commission in charge of Anti-Corruption and Illegal Assets 

32 

 
 
 
 
Forfeiture, the further decentralization of the Public Finance Model of Bulgarian Municipalities 
and  a  better  distribution  of  the  workload  in  the  judiciary  system.  These  activities  magnify  the 
objectives set out in the education and business environment component of the Bulgarian Plan, 
thus contributing to providing a more robust institutional environment for the overall management 
and delivery of the resources from Union Funds, including the Recovery and Resilience facility, 
as well as to improving the business environment further.  

Implementation  

In line with the administrative arrangements put in place, the following horizontal structures 
are involved in the coordination, control and audit of the Plan: 

-  The  National  Fund  Directorate  of  the  Ministry  of  Finance  shall  collect  and  report  data  on 
progress and act as the Authority responsible for preparing and submitting payment requests 
and receiving payments from the EC. The Directorate shall act as a focal point at national level 
with regard to the preparation of common rules and procedures for the implementation of the 
Facility, for carrying out checks and controls on the implementation of investments and reforms, 
including active monitoring of the progress in implementing the measures on the basis of the 
milestones and targets set in the RRP. 

- 

-  The Economic and Financial Policy Directorate at the Ministry of Finance shall be responsible 
for  the  reporting  on  the  progress  in  the  implementation  of  the  milestones  and  targets  of  the 
Bulgarian RRP within the European Semester cycle. 
 The Central Coordination Unit Directorate shall be responsible for the development of the 
Plan, the programming documents, including the allocation of funds under the Facility and the 
drawing up of a strategic framework for information and communication activities in relation 
to  the  implementation  of  the  Plan.  The  Directorate  shall  be  responsible  for  monitoring  the 
implementation  of  the  milestones  and  targets  of  the  Plan,  including  progress  on  common 
indicators,  green  and  digital  contribution  of  investments  etc.  The  Directorate  shall  also  be 
responsible for the setting up of the information system with all the functionalities required for 
the monitoring of the implementation of the Bulgarian RRP as well as for the further upgrades 
to the Unified Management Information System.  

-  The Executive Agency “Audit of EU Funds”, attached to the Minister of Finance, shall carry 
out the audit work under the Facility in order to provide assurance on the reliability of the data 
on the implementation of the milestones and objectives and the way in which they are collected, 
as well as assurance that the implementation ensures that double funding, fraud, corruption and 
conflict of interest are prevented and the principle of sound financial management is respected. 

Bulgaria consulted a wide range of stakeholders. This included social partners, regional and 
local authorities, civil society organisations, business community and other relevant stakeholders 
at the initial stages of the Plan’s preparation. The first draft of the Plan was subject to a public 
consultation which gathered over 90 positions from interest parties. These have provided input to 
the  subsequent  versions  of  the  Plan.  Consultation  at  the  later  stages  has  been  more  targeted, 
involving  mostly  the  social  partners  and  specific  sectoral  representatives.  The  plan  does  not 
include cross-border or multi-country projects. 

33 

 
 
The Bulgarian Plan provides a security self-assessment for investments in digital capacities and 
connectivity,  in  accordance  with  Article  18(4),  point  (g),  of  Regulation  (EU)  2021/241. 
Throughout  the  Plan,  several  components  include  a  section  that  explains  the  adherence  of  the 
measures to the Union’s open strategic autonomy and security issues. 

The  Plan  sets  out  Bulgaria´s  communication  plans.  The  objectives  of  the  country’s 
communication strategy are in line with the RRF Regulation and aim to raise awareness about the 
Plan’s  contribution  to  the  economic  and  social  recovery  and  to  the  twin  transition.  More 
specifically,  the  strategy  will  aim  at  ensuring  maximum  visibility  and  transparency  of  the 
governance  and  implementation  process,  informing  potential  beneficiaries  and  final  recipients 
about  funding  opportunities  under  the  Plan,  as  well  as  ensuring  the  active  involvement  of  all 
relevant  parties  in  the  implementation.  Communication  will  be  targeted  to  the  general  public, 
potential and final beneficiaries, sectoral representatives, media and multipliers. 

The  communication  activities  will  be  carried  out  via  several  channels.  The  dedicated  web 
portal11 will provide summary information about the Plan, links to relevant websites and resources, 
as well as possibility to signal cases of corruption, fraud, conflict of interest and double funding. 
Social media channels will be used to disseminate information on the implementation of the Plan. 
Public  outreach  activities  will  be  organised  for  the  general  public  around  key  stages  of  the 
implementation;  while  key 
through  coordinated 
communication with  the EC,  including the EC  Representation and the Bureau of the European 
Parliament  in  Bulgaria.  Projects  of  high  societal  relevance  will  be  communicated  separately 
through dedicated press briefings, newsletters, presentations, dedicated internet channels to ensure 
that messages reach the target audience. Relevant line ministries will act as “spokespersons” on 
the four pillars of the Plan. All communication activities of the ESP will ensure a single visual 
identity,  namely  the  use  of  the  EU  emblem  and  slogan:  “European  Union-funded  —  next 
generation EU. 

individual  projects  will  be  promoted 

State  aid  and  competition  rules  fully  apply  to  the  measures  funded  by  the  Recovery  and 
Resilience Facility. Union funds channelled through the authorities of Member States, like the 
RRF funds, become State resources and can constitute State aid if all the other criteria of Article 
107(1)  TFEU  are  met.  When  this  is  the  case  and  State  aid  is  present,  these  measures  must  be 
notified and approved by the Commission before Member States can grant the aid, unless those 
measures are covered by an existing aid  scheme or comply  with  the applicable conditions  of a 
block  exemption  regulation,  in  particular  the  General  Block  Exemption  Regulation  (GBER) 
declaring certain categories of aid compatible with the internal market in application of Articles 
107 and 108 TFEU12. When State aid is present and it requires notification, it is the duty of the 
Member State to notify State aid measures to the Commission before granting them, in compliance 
with Article 108(3) TFEU. In this respect, the State aid analysis carried out by Bulgaria in the Plan 

11 https://www.nextgeneration.bg 
12 Commission Regulation 651/2014, OJ L 187, 26.6.2014, p. 1 

34 

 
 
                                                           
cannot be deemed a State aid notification. In as far as Bulgaria considers that a specific measure 
contained in the Plan entails de minimis aid or aid exempted from the notification requirement, it 
is the responsibility of Bulgaria to ensure full compliance with the applicable rules. 

The Plan contains measures that are expected to help Bulgaria address the challenges in the 
area  of  gender  equality  and  equal  opportunities  for  all  and  describes  existing  national 
challenges in the area of gender equality and inclusion of vulnerable groups, including Roma. 
The Plan also states that equal participation of men and women and non-discrimination based on 
sex, race, ethnicity, religion or belief, disability, age and sexual orientation will be respected in the 
implementation  of  the  measures.  To  monitor  the  implementation  of  the  Plan,  data  will  be 
disaggregated by gender, age, disability and ethnic origin for reporting purposes, where possible. 
Measures  in  the  Plan  that  contribute  to  addressing  some  of  the  national  challenges  on  gender 
equality  and  access  to  equal  opportunities  for  some  groups  cover  the  personal  development  of 
young  people  from  vulnerable  groups,  including  Roma,  the  mobility  and  opportunities  for 
independent living of people with disabilities and the quality of life of older people. The Plan also 
covers  investments  in  kindergartens,  with  implications  for  the  labour  market  participation  of 
women. 

4.  SUMMARY OF THE ASSESSMENT OF THE PLAN 

4.1. Comprehensive  and  adequately  balanced  response  to  the  economic  and  social 

situation  

The  Bulgarian  recovery  and  resilience  plan  amounts  to  EUR  6 897.9  million  of  estimated 
costs.  It  represents  a  comprehensive  and  fairly  balanced  package  consisting  of  103  individual 
measures (47 reforms and 56 investments). The Plan contributes to the general objective of the 
Facility  to  promote  the  Union’s  economic,  social  and  territorial  cohesion  by  referring  in  a 
comprehensive manner to the six pillars structuring the scope of application of the Recovery and 
Resilience  Facility  (Article  3):  (i)  Green  transition,  (ii)  Digital  transformation,  (iii)  Smart, 
sustainable and inclusive growth, (iv) Social and territorial cohesion, (v) Health and economic, 
social  and  institutional  resilience,  and  (vi)  Policies  for  the  next  generation.  Table  4.1  below 
summarises the coverage of each of the components in the Bulgarian Plan to one or more of the 
six pillars.  

Overall, the Plan includes an appropriate balance of reforms and investments addressing the 
six pillars, reflecting the overall financial allocation and the country's challenges. Allocations 
to the green and digital transitions meet the requirements of the Recovery and Resilience Facility 
Regulation, and the Plan contributes to these two pillars substantially. The health, economic, social 
and institutional resilience pillar benefits most prominently from different components; at the same 
time, a significant number of components also contribute to the green and digital transitions, the 
smart, sustainable and inclusive growth, and social and territorial cohesion pillars. Finally, the two 
components for education, and research and innovation provide an important contribution to the 
pillar on policies for the next generation. 

35 

 
 
Table 5: Coverage of the six pillars of the Facility by the MS RRP components 

Green 
transition  

Digital 
transformation  

Component 1: Education 
and skills 

Component 2: Research 
and innovation 

Component 3: Smart 
industry 

Component 4: Low-carbon 
economy 

○  

○ 

○ 

●  

Component 5: Biodiversity  ● 

Component 6: Sustainable 
agriculture 

● 

● 

○ 

Component 7: Digital 
connectivity 

Component 8: Sustainable 
transport 

Component 9: Local 
development 

Component 10: Business 
environment 

Component 11: Social 
inclusion 

Component 12: Healthcare. 

○ 

○  

○ 

○ 

○ 

● 

○  

○ 

● 

○ 

○ 

Smart, 
sustainable & 
inclusive 
growth  

Social and 
territorial 
cohesion  

Health, and 
economic, 
social and 
institutional 
resilience  

Policies 
for the 
next 
generation  

○ 

● 

●  

● 

 ○ 

○ 

○ 

○ 

○ 

○ 

○ 

●  

○  

● 

○ 

○ 

○ 

● 

○ 

Key: “●” investments and reforms of the component significantly contribute to the pillar; “○” the component partially 
contributes to the pillar 

Green transition 

The  Plan’s  reforms  and  investments  addressing  the  green  transition  are  expected  to 
effectively  contribute  to  the  green  transition,  and  to  addressing  the  challenges  resulting 
therefrom.  Eight  out  of  the  twelve  components  contribute,  to  different  extents,  to  the  green 
transition. In terms of investments, the Plan arrives at a climate tracking contribution of over 58%. 
The energy and climate measure include a large package of reforms, notably in relation to setting 
out a date for the coal phase-out and enshrining this in a law/strategy to be approved in 2023 by 
the Bulgarian Parliament, establishing a mechanism to cut the greenhouse gas emissions from the 

36 

 
 
 
  
  
  
  
  
  
  
  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  
  
 
 
 
 
 
 
 
 
 
electricity sector nearly in half on a permanent basis, reforms to facilitate and speed up deployment 
of RES as well as laying out the regulatory framework for off-shore wind power and commitments 
to more than tripling RES installed capacity within four years, and a series of market liberalization 
reforms on wholesale and retail markets to allow for easy market access for renewables, among 
others. 

The Plan includes reforms and investments to support deployment of renewable electricity 
generation. They contain ambitious targets for expanded generation and storage capacity for solar 
and geothermal electricity. The Plan also includes a dedicated measure to support the development 
of pilot projects enabling the introduction of green hydrogen and biogas for industrial applications, 
as well as for their future use in transport and for the production of electricity and heat. 

The Bulgarian Plan includes an investment in electricity network infrastructure. This is with 
a view to modernising the electricity grid through the introduction of the state-of-the-art digital 
tools and methods to provide the necessary tools for the management of the electricity system and 
to increase its flexibility to allow for increased penetration of electricity from renewable sources.  

The plan includes significant investment in energy renovation of buildings. The investments 
will  finance  energy  renovations  of  residential  and  public/private  buildings,  street  lightning  and 
renewables for households not connected to natural gas and/or heat transmission networks. 

The Plan includes a sizeable allocation to sustainable transport (EUR 665.8 million). Several 
important reforms are included in the Plan, such as regulatory measures to strengthen the capacity 
to implement TEN-T projects, increase the European Rail Traffic Management System (ERTMS) 
coverage of the rail network, create a legal framework for a single transport ticketing system and 
single integrated transport scheme, as well as the law on promoting electric mobility, aiming at 
accelerating the electrification of road transport in Bulgaria and reducing related greenhouse gas 
emissions and air pollution. This is expected to deliver 10 000 electric charging stations and a total 
of 30 000 zero-emission and low-emission vehicles, and a 50% reduction in road safety blackspots. 
The investments include the acquisition of electric rolling stock for sub-urban and interregional 
rail transport, upgrade of existing railways infrastructure with ERTMS and digital systems, the 
extension  of  Sofia  metro  line  3,  a  new  intermodal  terminal  in  Ruse,  the  digitalisation  of  rail 
transport  with  deployment  of  European  Rail  Traffic  Management  System;  a  sustainable  urban 
mobility  pilot  scheme  including  zero-emission  public  transport  vehicles  and  charging  station 
infrastructure. 

In  order  to  improve  water  management,  the  water  sector  reform  included  in  the  Plan  is 
expected to optimise the regulatory framework for water supply and sewerage services. The 
new legislation aims at refining the tariff setting mechanisms, ensuring cost-based pricing for the 
use of the systems and the consumed services while also ensuring financial sustainability of the 
operators. Investments in this area include of the construction, reconstruction and modernisation 
of water supply and sewerage systems, and drinking and waste water treatment plants, as well as 
the digitalization of water management and improving the control of water use. 

37 

 
 
The  biodiversity  component  of  the  Plan  contains  measures  aiming  at  protecting  and 
restoring ecosystems and natural habitats and species of European and national importance. 
The reforms and investments in this component are expected to contribute to building an effective 
Natura  2000  management  structures  in  the  country,  as  well  as  to  restoring  climate-related 
ecosystems and protecting biodiversity. 

The  Plan  includes  measures  that  aim  at  enhancing  the  sustainable  management  and 
competitiveness of the Bulgarian agricultural sector in the context of the green transition. In 
particular,  the  Plan  includes  a  reform  for  adopting  a  National  Action  Programme,  which  is 
expected to set out a framework for the management and protection of the environment and natural 
resources in the field of agriculture. The Plan also includes dedicated investments that consist of 
setting  up  a  Fund  for  promoting  the  technological  and  ecological  transition  of  the  Bulgarian 
agricultural sector, as well as a digitalisation measure that is expected to facilitate the automated 
data exchange between the administration and farmers. 

The  Plan  further  supports  research  and  innovation  in  the  field  of  green  and  digital 
technologies  and  includes  measure  for  the  support  of  businesses  in  their  sustainability 
enhancing  investments.  In  particular,  the  Plan  includes  the  following  measures:  a  grant 
investment scheme for combining renewable electricity with local storage (EUR 102 million), a 
grant  scheme  for  the  transition  to  circular  economy  (EUR  73.6  million),  a  guarantee  financial 
instrument  for  energy  efficiency  and  renewable  energy  (EUR  75  million),  and  an  equity 
instruments for climate neutrality and digital transformation investments (EUR 30 million).  

Digital transformation 

The  Plan’s  reforms  and  investments  are  expected  to  effectively  contribute  to  the  digital 
transition. Digital measures are included in  eleven out of twelve components of the Bulgarian 
Plan  reflecting  the  broad  and  crosscutting  nature  of  the  envisaged  digitalisation  efforts.  A 
significant allocation to the digital transition is included in component 7 (Digital Connectivity). 
Investments and reforms in digital connectivity include the roll-out of very high capacity networks 
in rural and sparsely populated areas, which are lagging behind in terms of digital inclusion. The 
measures  thus  contribute  to  reducing  the  urban-rural  divide  in  connectivity  and  increase  the 
national  broadband  coverage.  The  reforms  included  in  the  Plan  aim  to  contribute  to  the 
development and implementation of an effective policy and regulatory framework, the efficient 
use of the radio  frequency  spectrum for the development  of 5G networks and services  and the 
creation  of  a  favourable  investment  environment.  The  Plan  also  features  an  investment  in  the 
digitalisation and modernisation of the Bulgarian Post Office with the aim to provide e-government 
in rural and remote areas where the public administration is not present and other services (such 
as  capturing  biometric  data  for  Bulgarian  Identity  Documents),  thus  contributing  to  enhancing 
territorial cohesion and access to e-government as well as other complex services across the whole 
territory of Bulgaria. 

38 

 
 
A  strong  focus  of  the  Plan  is  the  acquisition  of  digital  skills.  Component  1  (Education  and 
Skills)  includes  significant  measures  such  as  creating  STEM  laboratories  in  schools,  including 
high-tech  classrooms,  is  expected  to  promote  digital  literacy  and  enhance  teaching  methods  of 
STEM  subjects.  The  setting  up  of  youth  centres  are  expected  to  foster  young  people’s  skills, 
including  digital  skills.  Other  targeted  investments  include  digital  skills  trainings  and  the 
establishment of a national online platform for adult learning. Measures aimed at re-skilling and 
upskilling and adult learning are expected to contribute to increasing employability by enhancing 
skills, including digital skills, and increasing the quality and inclusiveness of education, which can 
in turn support the digital transition.  

Measures included in many components across the Plan represent a very significant effort 
towards  the  provision  of  digital  public  services,  digitalisation  of  public  administration, 
including  the  judiciary,  and  raising  digital  administrative  capacity.  In  particular,  the 
component  on  business  environment  includes  measures  aimed  at  the  digitalisation  of  the 
construction  sector,  the  judiciary,  the  digitalisation  of  data  and  registries  in  the  public 
administration,  and  the  provision  of  digital  public  services  to  citizens  and  businesses.  The 
investment in Component 7 concerning the digitalisation and modernisation of the Bulgarian Post 
Offices will enable the provision of e-government and administrative services also in remote and 
sparsely populated areas. Component 11 (Social Inclusion) also includes measures targeting the 
digitisation of museum, library and audiovisual  funds and aimed at digitalisation of the related 
systems for the provision of employment services and of the business processes of the social and 
solidarity  economy  enterprises  and  organisations.  The  healthcare  component  features  measures 
that contribute to the digitalisation of systems and platforms used for the provision of healthcare 
services (such as a digital platform for medical diagnosis, a telemedicine platform and a digital 
platform to improve emergency 112 number communication) and improving the resilience of the 
healthcare system. The Plan also supports the extension of the national coverage of the TETRA 
system to enhance the capabilities for coordination and management of crisis prevention and other 
national security issues. The Plan also includes measures aimed at improving the quality and output 
of  research  and  innovation  also  through  the  investment  in  digital  technologies  at  research 
institutions and at supporting the digitalisation of businesses, in particular small and medium-sized 
enterprises, through a grant scheme for ICT solutions and cybersecurity in SMEs. 

Significant  contributions  to  the  digital  objectives  are  also  included  in  component  8 
(Sustainable Transport). It has investments in the digitalisation of rail transport, road safety and 
sustainable transport, component 9 (Local Development) with investments in the digitalisation of 
the control, management and efficient use of water and in component 4 (Low-carbon economy), 
with investments in the digital transformation of the Energy System Operator and with significant 
investments in national electricity storage energy infrastructure.  

Smart,  sustainable  and  inclusive  growth,  including  economic  cohesion,  jobs,  productivity, 
competitiveness, research, development and innovation, and a well-functioning single market with 
strong SMEs 

39 

 
 
The  Plan  covers  the  third  pillar  effectively,  including  a  series  of  important  reforms  and 
investments.  These  are  aimed  at  improving  the  research  and  innovation  ecosystem,  further 
developing  e-government  services,  digitalizing  the  construction  sector  by  introducing  Building 
Information  Modelling,  creating  favorable  conditions  for  private  investment  and  supporting 
businesses,  in  particular  small  and  medium  sized  enterprises  and  enterprises  and  auto-
entrepreneurs of the creative and cultural sectors 

The Plan includes measures aimed at improving the innovation output of Bulgaria, fostering 
the  technology  transfer  and  commercialization  of  research  results,  thus  spurring  its 
economic growth in the medium and long term. In terms of reforms, the research and innovation 
component includes the establishment of the Ministry of Innovation and Growth, with the mandate 
to define the innovation policy, supporting the enhancement of innovation output and innovation-
driven  culture,  the  transfer  of  technology  and  knowledge,  and  the  promotion  of  scientific 
development in the industry. The newly established Ministry shall steer, together with the Ministry 
of Education and Science, the preparation of the Research and Innovation Act, which, once entered 
into force, will define the legislative parameters of the national policy for the development and 
financing of research, innovation and technology and regulate the role of each of the institutions 
involved  in  research  and  innovation  policy.  The  creation  of  an  Innovation  Board  composed  of 
experts,  with  advisory  functions,  is  expected  to  support  the  definition  and  implementation  of 
innovation  policy  and  ensure  effective  involvement  of  all  the  relevant  stakeholders.  The  Plan 
further  contains  investment  measures  aimed  at  providing  funds  for  research  and  innovation 
activities by SMEs and higher education institutions and at enhancing the innovation capacity of 
the Bulgarian Academy of Science, by upgrading and renovating its infrastructure and by financing 
research projects in particular in the field of green and digital technologies. Measures in the Plan 
also support the promotion of the products and services of the cultural and creative sectors.  

A  coherent  package  of  measures  in  the  Plan  aim  to  create  favourable  conditions  for 
investments in industrial parks and zones. This is achieved first trough the entry into force of 
the Industrial Parks Act, which aims at defining, among other things, the rules governing the parks 
and the benefits for investors. In addition, a dedicated competitive grant scheme addressed at parks 
and  zones  operators  is  expected  to  support  the  creation  of  the  infrastructure  for  the  effective 
establishment  of  businesses.  Furthermore,  the  Plan  contains  an  extensive  programme  for 
supporting the innovation and growth of Bulgarian businesses in their green and digital transition. 
The programme, mainly addressed at SMEs and mid-capitalization companies, is composed of a 
guarantee  schemes,  equity  instruments  and  competitive  grants,  including  dedicated  support 
schemes  for  growth  and  technological  modernization,  for  innovation,  for  information  and 
communication technology and cybersecurity in SMEs, for renewable energy systems and energy 
storage facilities, for energy efficiency and renewable energy, for climate neutrality and digital 
transformation  investments.  Overall,  the  plan  will  contribute  to  achieving  the  objectives  of  the 

40 

 
 
updated Industrial Strategy13 for making the EU industry more competitive globally, enhancing 
open strategic autonomy and fostering the twin transition. 

Social and territorial cohesion 

The  Plan  extensively  covers  the  fourth  pillar,  contributing  adequately  to  its  overall 
coherence.  The  Plan contains some measures  that  are expected to  contribute to  addressing the 
country’s challenges  in  the area of  up- and  re-skilling, with  a focus on vulnerable  groups.  The 
education and skills component is expected to contribute to improving labour market inclusion by 
providing trainings addressing skills shortages, including digital skills, of a large fraction of the 
Bulgarian population. Trainings are expected to be carried out in person and through an online 
platform for adult learning linked to the public employment services. Support to attend trainings, 
with  a  focus  on  vulnerable  groups,  is  expected  to  be  provided  throughout  the  country  via  the 
establishment of a network of digital clubs, where access will be granted free of charges. Similarly, 
the  investment  in  youth  centres  targets  the  labour  market  integration  and  skill  development  of 
young  people,  with  a  focus  on  the  youth  from  vulnerable  groups,  including  Roma.  Additional 
measures  are  expected  to  increase  the  labour  market  relevance  of  the  educational  and  training 
systems, notably a reform of the regulatory frameworks for higher and vocational education and 
training,  complemented  by  an  investment  in  educational  infrastructures,  which  also  covers 
vocational upper secondary schools.  

A  number  of  measures  in  the  Plan  are  expected  to  strengthen  social  cohesion,  with  the 
potential to contribute to addressing the shortcomings in the provision of employment services and 
of the Bulgarian social protection system. Employment services are expected to improve as a result 
of  the  implementation  of  measures  included  in  the  social  inclusion  component,  namely  an 
investment  targeting  the  modernisation  of  the  IT  systems  of  the  Employment  Agency,  with 
positive implications for the quality of the service provision of the Agency. The social inclusion 
component also includes a reform of the minimum income scheme benefitting adults and children, 
which is expected to contribute to addressing social challenges observed in the areas of poverty, 
social exclusion and income inequality, and an investment to promote the products and services of 
the  social  and  solidarity  economy  enterprises  and  organisations,  thus  supporting  the  further 
development of the social economy.  

Further territorial cohesion is expected to be fostered by a number of measures which focus 
on  providing  services  to  underserviced  areas.  The  digital  transformation  of  Bulgarian  posts, 
under the Digital Connectivity component, aims at providing comprehensive administrative and 
e-government services, including telemedicine, in modernised postal offices located in remote and 
rural  areas,  with  limited  access  to  the  public  administration.  Similarly,  the  Plan  includes  an 
investment aiming at deploying broadband connection in rural and sparsely populated areas, under 

13 COM(2020) 102 final, https://ec.europa.eu/info/sites/info/files/communication-eu-industrial-strategy-march-2020_en.pdf and COM(2021) 350 final 
https://ec.europa.eu/info/sites/default/files/ communication-industrial-strategy-update-2020_en.pdf  

41 

 
 
                                                           
the  Digital  Connectivity  component,  and,  within  the  Healthcare  component,  the  set-up  of 
outpatient  units  in  remote  areas.  In  addition,  component  10  –  Business  Environment  aims  at 
improving the accessibility of citizens to the justice system by broadening the scope of free legal 
assistance  and  exemptions  from  court  fees  and  by  enabling  remote  hearings  and  electronic 
submission of documents.  Territorial cohesion is also expected to benefit from the establishment 
of an air ambulance system, which will allow for the transportation of people affected by a situation 
of emergency throughout the country, including in hard-to-reach areas. In addition, the Plan should 
further  contribute  to  reducing  territorial  disparities  through  reforms  supporting  a  place-based, 
bottom-up approach as well as dedicated infrastructure investments in the water sector in regions 
outside of the capital. Moreover, specific investments are planned to cover smaller agglomerations 
across the country and in rural areas and Natura 2000 protected sites, through the biodiversity and 
sustainable agriculture components.  

The  Low-carbon  economy  and  sustainable  transport  components  have  a  solid  territorial 
approach in terms of investments in infrastructure, covering several regions of the country. 
While investments  related to  energy  efficiency of the building stock are  expected to  be spread 
across  the  country,  railway  digitalisation  is  expected  to  be  improved  in  the  Ruse-Caspichan 
section,  along  with  the  on-board  equipment  that  is  expected  to  operate  in  the  TEN-T 
comprehensive network. The construction of an intermodal terminal in Ruse and the improvement 
of conditions regarding road safety are other examples of decentralized investments with a strong 
territorial  dimension.  In  addition,  to  ensure  that  the  coal  regions  are  supported  through  the 
transition and that no one is left behind, the reforms and investments towards decarbonisation of 
the economy will set the ground for cohesion policy investments notably through the JTF.  

Health, and economic, social and institutional resilience, with the aim of, inter alia, increasing 
crisis preparedness and crisis reaction capacity 

The Plan covers the fifth pillar with a number of important investment and reforms that are 
expected  to  increase  health  resilience.  The  Plan  includes  a  coherent  package  contributing  to 
addressing  the  challenges  of  the  Bulgarian  health  system.  Notably,  a  new  national  strategy  on 
health, and measures that aim at strengthening the accessibility of the health system by improving 
access  to  quality  healthcare  services  across  the  country,  including  in  remote  and  rural  regions; 
developing outpatient care further; introducing a legislative package and other actions to promote 
a more balanced distribution of healthcare professionals and establishing an air ambulance system. 
In addition, the plan envisages measures that are expected to improve access to quality paediatric 
care,  to  modernise  cancer  treatment,  and  to  develop  e-health  further.  In  particular,  the  further 
development of digitalisation in healthcare and of e-health services are the focus of a dedicated 
reform, which is complemented by the completion of the National Health Information System and 
the  set-up  of  medical  platforms  covering  a  number  of  healthcare  areas,  including  medical 
diagnostics and the provision of telemedicine services.  

42 

 
 
The  Plan  also  strengthens  Bulgaria’s  social  resilience  and  crisis  preparedness.  Under  the 
Social Inclusion component, social resilience is expected to be strengthened via the modernisation 
of the provision of social services, including long-term care, which are expected to contribute to 
moving the deinstitutionalisation process forward, as well as by the provision of support to people 
with disabilities and the promotion of the social economy and the cultural and creative sectors. In 
addition, the set-up of an air ambulance system and the upgrade and further development of the 
radio-communication  system  TETRA  and  of  the  national  emergency  number  are  expected  to 
increase the crisis preparedness and reaction capacity of Bulgaria.  

In addition, the Plan fosters Bulgaria’s institutional and economic resilience. Measures under 
the business  environment  component should effectively strengthen the potential for sustainable 
growth and increase the resilience of the Bulgarian economy by addressing disincentives in the 
business  environment  and  by  increasing  the  efficiency  of  the  judicial  system  and  insolvency 
procedures,  also  benefitting  from  the opportunities provided by digital  transition. A significant 
number of reforms and investments are expected to reinforce the institutional framework. These 
include, among others, reforms to create a mechanism for the accountability and criminal liability 
of the Prosecutor General, the improvement of accessibility, effectiveness and predictability of the 
justice system; the enhancement of the role of the Inspectorate of the Supreme Judicial Council in 
the prevention and counteracting corruption; the establishment of a new anti-corruption body; the 
introduction of mandatory judicial mediation; and the improvement of the insolvency procedure. 
Furthermore,  reforms  and  investments  cover  areas  such  as  the  digitalisation  of  the  public 
administration, anti-money laundering, the quality of legislative processes, public procurement, 
and audit and control mechanisms.  

Policies for the next generation, children and the youth, such as education and skills  

The Plan covers the sixth pillar through measures in the areas of education and skills which 
are expected to improve access to quality education and skill development. The Plan aims at 
improving  the  accessibility,  quality  and  effectiveness  of  the  education  and  training  systems 
through the construction and renovation of educational infrastructures and youth centres across the 
territory. The promotion of science, technology, engineering and mathematics (STEM) fields in 
Bulgarian schools, envisaged under the plan, is also expected to make an important contribution 
to  improve  the  quality  and  labour  market  relevance  of  the  education  system.  In  addition,  an 
additional number of children are expected to be reached by the educational system as a result of 
the  progressive  inclusion  of  four-year-olds  in  the  educational  system.  The  implementation  of 
distance and hybrid forms of learning, which is covered by a reform in the Plan, is also expected 
to contribute to the further improvement of the educational system, for its potential to ensure the 
continuity of the educational offer targeting children and students. 

Taking into consideration all reforms and investments envisaged by Bulgaria, its Plan represents, 
to a large extent a comprehensive and adequately balanced response to the economic and social 
situation, thereby contributing appropriately to all six pillars referred to in Article 3 of the RRF 

43 

 
 
Regulation, taking the specific challenges and the financial allocation of Bulgaria into account. 
This  would  warrant  a  rating  of  A  under  the  assessment  criterion  2.1  in  Annex  V  to  the  RRF 
Regulation. 

4.2. Link with country-specific recommendations and the European Semester  

According to the Regulation, the Plan is expected to address a significant subset of challenges 
identified in the relevant country-specific recommendations issued to Bulgaria both in 2019 
and 2020. The Plan puts forward an ambitious reform and investment agenda, with the potential 
to strengthen sustainable growth and increase the overall resilience of the Bulgarian economy.  

Reforms  and  investments  under  the  business  environment  component  contribute  to 
addressing  several  country-specific  recommendations.  The  measures  included  in  the 
component  contribute  to  addressing  country-specific  recommendation  3  of  2019  in  relation  to 
improving business environment, and country-specific recommendation 4 of 2020 in relation to 
minimising  administrative  burden  to  the  companies  by  improving  the  effectiveness  of  public 
administration  and  reinforcing  digital  government;  ensuring  an  effective  functioning  of  the 
insolvency framework; improving the governance of state owned enterprises, strenghtening public 
procurement and figting corruption. Among the proposed measures are also the amendments to 
the  Rules  of  Procedure  of  the  National  Assembly  that  aim  to  increase  both  the  quality  and 
predictability of the legislative process by introducing impact assessments for all draft legislation 
proposed  by  Members  of  Parliament,  increasing  transparency,  and  establishing  rules  to  limit 
proposals for amendments and supplements that refer to other legislative acts. In addition to that, 
a  number  of  reforms  aim  to  enhance  the  potential  of  e-government  and  e-justice,  such  as  the 
digitalisation of the judiciary that would enable judicial acts to be drafted as electronic documents, 
a fully electronic submission of documents and holding remote court sessions. All these measures 
should help to increase transparency, lower the administrative burden and in general foster a better 
investment climate. Some progress has been made with the recommendations on the improvement 
of  the  tax  collection,  particularly  in  the  context  of  labour  and  fuel  taxes,  and  there  are  several 
ongoing projects under the Technical Support Instrument involving the National Revenue Agency 
and  targeting  this  area.  However,  they  are  not  expected  to  fully  address  the  country  specific 
recommendation  on  tax  collection  (CSR  1,  2019),  and  no  specific  measures  to  address  it  are 
included  in  the  Plan.  Finally,  in  the  country-specific  recommendations  for  2019,  the  financial 
sector features prominently but this has not been taken up in the Plan as there has been substantial 
progress with the banking and insurance sector supervision. Also, on 10 July 2019, following the 
fulfilment of the necessary supervisory and legislative prerequisites, the European Central Bank 
and  the  Bulgarian  National  Bank  established  close  cooperation  and  Bulgaria  entered  into  the 
Banking Union. 

An  important  set  of  measures  address  challenges  identified  in  the  country-specific 
recommendations that are also covered by the commitments taken by Bulgaria upon its entry 
in  the  Exchange  Rate  Mechanism  (ERM  II).  The  reforms  are  expected  to  improve  the 
governance of the state-owned enterprises by ensuring consistency between the composition of the 

44 

 
 
boards and the selection procedures set out in the Law on Public Enterprises as well as adopting a 
state ownership policy that would maximize benefits to society through an efficient allocation of 
resources. In addition to that, the effectiveness of insolvency procedures will be increased thanks 
to the adoption of the Law on Insolvency of Individuals as well as adopting legislative amendments 
to  the Commercial  Law  on the  Insolvency  Framework including full transposition of Directive 
2019/1023.  There  are  also  measures  aiming  to  improve  the  implementation  of  the  anti-money 
laundering framework, including by enhancing the capacity as well as the analytical capabilities 
of supervisors. For this purpose, the Plan foresees, among others, the adoption and monitoring of 
a supervisory strategy as well as screening procedures for employees in management positions. In 
addition to that, an IT tool for processing and analysing suspicious transaction reports will be put 
in place together with action plan to monitor the money laundering and terrorist financing risks.  

The  rule  of  law  challenges  in  Bulgaria  are  monitored  through  the  Cooperation  and 
Verification Mechanism (CVM) and the Rule of Law Report. Due to this specific monitoring 
regime of the CVM, this area is covered in the European Semester only as a part of a dedicated 
recital to the country-specific recommendations and also as a part of the Country Report analysis. 
The Plan addresses a number of challenges identified in the CVM, the Rule of Law Report and 
also the recitals to the country-specific recommendations, such as: problems with the functioning 
of  the  judiciary,  corruption  and  issues  with  the  accountability  and  criminal  liability  of  the 
Prosecutor General. For the latter, important elements are the introduction of necessary safeguards 
and guarantees for an independent investigation of the Prosecutor General and his/her deputies; 
possibility for a judicial review of a prosecutor’s decision not to open an investigation, and annual 
reporting by the Prosecutor General on investigations and convictions in corruption cases. Anti-
corruption measures, include the set-up of a new anti-corruption body with criminal investigation 
powers, introduction of legislative measures to protect whistle-blowers and to regulate lobbying 
activities, and establishment of an integrity verification mechanism for civil servants occupying 
positions that have a high corruption risk.  

A  number  of  measures  in  the  Plan  are  expected  to  address  the  main  challenges  of  the 
Bulgarian energy and transport sectors. These investments and reforms address the country-
specific  recommendations  of  2019  and  2020  to  focus  investment-related  economic  policy  on 
energy infrastructure and energy efficiency (CSR 3, 2019) and to focus investment on the green 
and  digital  transition,  in  particular  on  clean  and  efficient  production  and  use  of  energy  and 
resources, environmental infrastructure and on sustainable transport, contributing to a progressive 
decarbonisation  of  the  economy,  including  in  the  coal  regions  (CSR  3,  2020).  In  particular, 
measures included in the Plan are expected to facilitate and accelerate the deployment of renewable 
energy sources and storage and result in a significant reduction of greenhouse gas emissions from 
power  production  thus  contributing  to  the  progressive  decarbonisation  of  the  economy.  In 
particular, the Plan envisages the adoption of a legislative framework for the decarbonisation of 
electricity, including a binding timetable for the phase out of coal and lignite use and targets and 
regulatory  CO2  emission  cap  ensuring  by  2026  a  40%  emission  reduction  compared  to  2019. 
Important reforms are also envisaged to remove bottlenecks for the deployment of renewables (e.g. 

45 

 
 
simplify licensing and permitting procedures for RES, introduction dedicated ‘go-to’ areas where 
onshore  wind  parks  would  be  compliant  with  environmental  legislation)  and  energy  efficiency 
investment (e.g. amendments to the Condominium Act and one stop shop). The Plan also includes 
a key reform aiming to establish a competitive wholesale and retail markets, which also facilitates 
access  of renewables to the electricity markets, and improving the corporate governance in  the 
energy sector to ensure more transparency and a level playing field. The carbon footprint of the 
transport sector is  also  expected to  be reduced by  reforming the road and railways sectors  and 
investing in the modernisation and digitalisation of the railways and sustainable urban mobility. 
This includes railways investments focused on new zero-emission rolling stock, the European Rail 
Traffic Management System deployment,  as well as the incentives  for the registration of zero-
emission vehicles and the introduction of the low-emission zones in the biggest and most polluted 
district cities. Finally, the Plan includes important measures to enhance road safety and reduce the 
number of victims from road accidents by 30% between 2019 and 2025. 

The Plan includes reforms and investments fostering the green and digital transitions and 
promoting  energy  efficiency  and  the  requalification  of  environmental  infrastructures. 
Besides  the  measures  focused  on  the  transition  to  green,  circular  and  digital-oriented  business 
practices  for  small  and  medium-size  enterprises,  the  Plan  includes  the  financing  of  research 
projects to enhance the innovation output of the Bulgarian Academy of Science, with a particular 
focus in the field of green and digital technologies. The Plan also aims to reduce both primary and 
final energy consumption via the renovation of the national stock of residential and non-residential 
buildings, both public and private. There is also a focus on the competitiveness and sustainable 
development  of  the  regions  of  the  country  and  promoting  local  development.  This  includes  a 
revision of the management of the water and agricultural sectors, as well as the construction and/or 
renovation of the water supply and sewerage system. It should be noted however, that alone the 
measures  included  in  the  Plan,  which  address  Bulgaria’s  weak  performance  in  resource 
productivity and circular economy, are not of the magnitude required to reduce the gap with the 
EU average. 

Measures fostering the availability of digital infrastructures, access to distance working and 
the enhancement of digital skills are expected to support the digital transition. They help to 
address  the  2019  and  2020  country-specific  recommendations.  In  particular,  strengthening 
employability by reinforcing digital skills (CSR 4, 2019), improving access to distance working 
and promoting digital skills and equal access to education (CSR 2, 2020), focusing investments on 
the green and digital transition (CSR 3, 2020), and minimising administrative burden to companies 
by improving the effectiveness of public administration and reinforcing digital government (CSR 
4,  2020).  Measures  included  under  the  Plan  cover  the  large-scale  deployment  of  digital 
infrastructure, the digitalisation of administrative services, as well as revisions to the regulation 
concerning distance working. The Plan also promotes skills relevance and adult learning, with a 
focus  on  digital  skills.  This  encompasses  changes  to  the  regulatory  frameworks  for  higher  and 
vocational education and training and the development of an online platform for adult learning 

46 

 
 
linked  to  the  public  employment  services.  Together  with  the  accompanying  reforms,  the 
investments aim to enhance a favorable investment environment and the skills of the Bulgarian 
population. 

The  Plan  is  expected  to  foster  social  inclusion  and  to  improve  access  to  education,  adult 
learning  and  healthcare.  A  number  of  measures  in  the  Plan  are  expected  to  contribute  to 
addressing related challenges identified in the 2019 and 2020 country-specific recommendations 
namely  they  are  expected  to  contribute  to:  ensuring  adequate  social  protection  and  essential 
services for all and strengthen active labour market policies and addressing the shortcomings in 
the  adequacy  of  the  minimum  income  scheme  (CSR  2,  2020);  improving  employability  by 
enhancing skills, including digital skills and increasing the quality, labour market relevance and 
inclusiveness  of  education  and  training  (CSR  4,  2019);  and  improving  access  to  integrated 
employment  and  social  services  (CSR  4,  2019).  To  foster  social  inclusion,  the  Plan  includes  a 
reform of the minimum income scheme to increase its adequacy and coverage as well as measures 
to improve the provision and integration of employment and social services. Although the reform 
of the minimum income and its eligibility rules are expected to lead to significant improvements 
in the level of social protection, there is still room for further improvements, considering the very 
low starting point. A number of measures in the plan, within the local development, transport and 
digital connectivity components, also contribute to widening access to essential services, such as 
water,  transport,  and  digital  communication.  Relevant  measures  in  the  field  of  education  and 
training include measures for the enhancement of the relevance of higher education with the aim 
of addressing labour market shortages and promoting research, as well as digital skills courses for 
adults and a platform for adult learning. The Plan also includes a reform of the mandatory pre-
school education as of the age of four and envisages the construction and renovation of educational 
facilities, which are expected to improve access to education.  

As  one  of  the  critical  sectors  for  achieving  crisis  preparedness  and  resilience,  the  health 
sector is specifically supported by a dedicated component in the Plan. There are measures that 
are expected to contribute to addressing healthcare related challenges identified in the country- 
specific recommendations, specifically: mobilising adequate financial resources to strengthen the 
resilience, accessibility and capacity of the health system, and ensuring a balanced geographical 
distribution of health workers (CSR 1 2020), as well as improving access to health services and 
addressing shortages of health professionals (CSR 4 2019). Improved provision and availability of 
health services across Bulgaria is expected to be achieved via the set-up of outpatient care units 
with a focus on remote areas with no healthcare access within a reasonable distance, complemented 
by measures addressing shortages of healthcare professionals and their geographical distribution, 
as well as via the enhancement of the provision of telemedicine services, and the establishment of 
an air ambulance system. However, the high ‘out-of-pocket’ payments are not addressed in the 
Plan.  

47 

 
 
 
The Plan also covers measures for restructuring and further development of the research 
and  innovation  ecosystem  as  well  as  provision  of  support  for  small  and  medium-sized 
enterprises.  These measures  contribute to  addressing  the country-specific recommendations of 
2019 and 2020, namely: focusing investment-related economic policy on research and innovation 
(CSR 3, 2019) and streamlining and accelerating the procedures to provide effective support to 
small and medium-sized enterprises and self-employed (CSR 3, 2020). These measures include a 
new  legislative  framework  for  R&I  development  and  research  universities,  alongside  new 
instruments for the funding of research. With those measures, Bulgaria is setting a more coherent 
framework for R&I as a driver of future growth. The measures are also expected to contribute to 
pooling national and EU resources to overcome the current fragmentation of the ecosystem. The 
Plan also contains measures focused on attracting industrial investments and supporting small and 
medium-sized enterprises in modernising their technology and in their transition to green, circular 
and digitally-oriented business practices. 

The Plan is expected to contribute to the competitiveness and sustainable development of the 
regions of the country and to local development. This includes a revision of the management of 
the water and agricultural sectors, as well as the construction or renovation of the water supply and 
sewerage system. Moreover, local development should be promoted through a new regional policy 
approach and dedicated reforms expected to foster the direct involvement of local communities in 
the management of European funds. These measures contribute to addressing the country specific 
recommendation  on  focusing  investment-related  economic  policy  on  water  and  waste 
infrastructure, taking into account regional disparities (CSR 3, 2019).  

All the measures contained in the Plan will help to address the social and economic challenges in 
a comprehensive manner and to boost the growth potential of the economy in a sustainable way. 
Taking into consideration the reforms and investments envisaged by Bulgaria, its Plan is expected 
to contribute to  effectively addressing all or a significant subset of  challenges identified in  the 
country-specific recommendations, or challenges in other relevant documents officially adopted 
by the Commission under the European Semester, and the Plan represents an adequate response 
to  the  economic  and  social  situation  of  Bulgaria.  This  would  warrant  a  rating  of  A  under  the 
assessment criterion 2.2 in Annex V to the RRF Regulation. 

48 

 
 
Table 6: Mapping of country challenges identified in 2019-20 country-specific recommendations 
and the Bulgarian RRP components 

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  ○ 

○ 

○ 

  ○ 

Associated CSR 
(2019-2020) and 
European Semester 
recommendations 
2019.4.5, 2020.1.2 

2019.4.3, 2020.2.1 

  ○ 

○ 

○ 

2020.2.2 

●   

2020.2.3 
2019.4.1, 2020.2.4 
2019.4.2, 2020.2.5 

● 

  ●   

  ○ 

●   

○   

●   

Country challenges 
(as identified in Section 2) 
Accessibility, resilience and capacity 
of health services, including 
addressing shortages of healthcare 
workers and reducing out-of-pocket-
payments 
Social protection and essential services 
for all, enhancing the improving of 
social and employment services 
Strengthen active labour market 
policies 
Improve access to distance working 
Promote digital skills and access to 
education 

Shortcomings of the minimum income 

2019.4.4, 2020.2.6 

Effective support to small and 
medium-sized enterprises and self-
employed 
investment on the green and digital 
transition, in particular on clean and 
efficient production and use of energy 
and resources 
Investment in environmental 
infrastructures 
Investment in sustainable transport 
gradual decarbonisation of the 
economy, including in coal regions 

Effectiveness of public administration 
and reinforcement of digital 
government, effective functioning of 
the insolvency framework and of 
supervision and enforcement of the 
anti-money laundering framework 

2020.3.1 

  ● 

2019.3.3, 2020.3.5 

○ 

○ 

● 

● 

○ 

○ 

●  ○ 

● 

○ 

○ 

2019.3.3, 2020.3.6 

  ●   

2019.3.2, 2020.3.7 

  ○  ●   

● 

2019.2.8, 2019.2.4, 
2019.3.4,2020.4 

  ○   

  ● 

○   

49 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
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Associated CSR 
(2019-2020) and 
European Semester 
recommendations 
2019.1.2 

2019.3.1 

  ●  ○   

  ○ 

2019.1.1 

Country challenges 
(as identified in Section 2) 
Corporate governance of State-owned 
enterprise  
Focus investment-related economic 
policy on research and innovation 
Improve tax collection through 
targeted measures in areas such as fuel 
and labour taxes* 

Key: “●” investments and reforms of the component significantly address the challenge; “○” the component partially 
addresses the challenge 
* Some progress has been made with the recommendation and this area is covered outside of the Plan 

4.3. Growth  potential,  job  creation,  economic,  institutional  and  social  resilience, 
European  Pillar  of  Social  Rights,  mitigating  the  impact  of  the  crisis,  and  social 
territorial cohesion and convergence  

Fostering economic growth and jobs 

The Plan aims to accelerate the economic recovery in Bulgaria and to improve long-term 
growth through an ambitious agenda of investments and reforms. The Plan includes measures 
with  the  potential  to  improve  Bulgaria’s  growth,  job  creation,  and  economic,  social  and 
institutional resilience. The Plan also aims to contribute to the implementation of the European 
Pillar of Social Rights, including through the promotion of policies to foster social inclusion, and 
to  mitigate  the  economic  and  social  impact  of  the  COVID-19  crisis,  thereby  enhancing  the 
economic, social and territorial cohesion and institutional resilience. 

The  Plan  is  designed  to  support  economic  growth  and  job  creation  through  a  number  of 
investments and reforms. According to the Bulgarian authorities, measures envisaged under the 
Plan are also expected to have significant positive economic impacts in the coming years and also 
in the long term. The main contributions to both economic growth and employment, as presented 
by  the  authorities,  are  expected  to  come  from  investments  and  reforms  in  the  Low  Carbon 
Economy and the Smart Industry components. In addition, the Business Environment component 
should  also  contribute  to  strengthen  the  economic  growth  through  the  improvement  of  the 

50 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
institutional  framework,  including  the  digitalisation  of  the  public  administration  and  the 
construction  sector,  and  other  reforms  and  investments  aimed  at  increasing  the  efficiency  and 
quality of processes in areas such as justice, the fight against corruption, the governance of state 
owned enterprises, anti-money laundering, insolvency procedures, public procurement, and audit 
and control mechanisms. 

Policies related to education and skills largely aim at achieving the objectives of increasing 
socio-economic resilience and fostering productivity growth through the acquisition of skills, 
including digital. Key policies include, among others, the enhancement of higher education with 
the aim of addressing labour market shortages, the development of a platform for adult learning 
linked to the public employment services and the establishment of youth centres, which target the 
inclusion in the labour market of young people, with a focus on young people from vulnerable 
groups, including Roma. Those measures should contribute to strengthen the employability and 
productivity of the workforce, including of vulnerable groups, thus enhancing economic growth. 

Investment and policies under the low carbon economy component aim to reduce the carbon 
footprint and energy intensity of the economy. Envisaged measures should facilitate the green 
transition by improving the energy efficiency of residential, public and business buildings, as well 
as by promoting renewable energy production. Key policies include, among others, a scheme to 
support  the  decarbonisation  process  through  substantial  investments  and  reforms,  to  accelerate 
deployment  of  renewables  to  reduce  emission  and  replace  coal  and  lignite,  as  well  as  the 
completion  of  the  ongoing  electricity  market  reform  towards  full  liberalization.  These  should 
ultimately improve  the country’s  competitiveness  and growth potential and should also  help  to 
meet climate goals. Furthermore, policies under low carbon economy component would also lead 
to long-term positive effects on the economy. Reducing energy costs for consumers and businesses 
will result in savings of financial resources freed to be invested in other sectors of the economy or 
reinvested. The planned interventions should also increase social sustainability in many aspects 
through improving the living conditions of households and quality of life of population in terms 
of reduced air pollution. 

Investments and policies under the smart industry component aim at supporting businesses 
in the twin transition. Envisaged measures should facilitate the decarbonisation of the economy 
and contribute to attracting industrial investment and developing industrial ecosystems, as well as 
supporting the development  of industrial  parks  and improving their infrastructure  connectivity. 
Key  policies  include,  among  others,  a  mechanism  to  attract  industrial  investment  and  develop 
industrial ecosystems and a public support programme for the development of industrial districts, 
parks  and  similar  territories.  These  should  contribute  to  increasing  the  productivity  of  the 
Bulgarian enterprises.  

Other components are expected to play a substantial role on mitigating the social impact of 
the COVID-19 crisis. This is notably the case for social inclusion, where the pandemic showed 
that  the  degree  of  resilience  to  shocks  of  the  social  protection  systems  in  the  country  is  not 

51 

 
 
sufficient to fully ensure adequate support and assistance to all the groups in society, especially 
vulnerable  groups,  and  for  healthcare.  Measures  under  the  social  inclusion  and  healthcare 
components of the Plan should contribute to improve the overall social support system and increase 
the  resilience  of  the  health  system.  Namely,  this  is  expected  to  be  achieved  via  a  reform 
contributing to addressing the shortcomings of the minimum income scheme, with implications 
for the reduction of poverty and inequality, and through measures targeting population’s access to 
quality and timely healthcare.  

Investment  and  policies  related  to  Research  and  Innovation  are  aimed  at  providing  a 
favourable  environment  for  the  realisation  of  new  products  and  processes  and  the 
development  of  innovative  enterprises.  This  is  a  key  precondition  for  creating  a  high-tech 
industrial  base  that  would  propel  the  economy  onto  a  higher  growth  trajectory.  Key  policies 
include,  among  others,  a  new  governance  structure  and  legislative  framework  for  research  and 
innovation, together with instruments for the funding of research. This should ultimately help to 
close the significant gap compared to the EU average spending on research and improve the ability 
to maintain and attract talent, thereby strengthening the country's competitiveness and, ultimately, 
economic growth. 

Policies and investments related to digital connectivity aim at increasing investment in high-
capacity digital infrastructure. These should contribute to an increase in coverage and ensure 
equal  access  to  broadband  services,  paving  the  way  forward  for  the  digital  transition.  The 
improvement in communications and data processing capacity should result in positive effects in 
terms of social inclusion, e-government, efficiency of public administration and the reduction of 
administrative  burden  on  businesses.  These  would  positively  contribute  to  boosting  economic 
efficiency and productivity.  

Policies  and  investments  related  to  transport  aim  at  increasing  the  sustainability  of  the 
transport sector by reducing its carbon footprint and improving road safety. Measures under 
this component will be key in the context of the green transition, given the significant share of the 
transport  sector  in  greenhouse  gas  emissions.  This  will  be  achieved  through  the  creation  of  a 
legislative framework (the  law on promoting electric mobility) as well as through a number of 
investments  aimed  at  the  modernisation  and  digitalisation  of  the  public  transport  through  the 
acquisition of a zero-emission rolling stock, deployment of the European Rail Traffic Management 
System or construction of a new segment of metro in Sofia. Road safety measures should lead to 
a 50% reduction of road safety blackspots/hotspots. As a result, overall mobility of the population 
would improve, enhancing trade, industry development and economic growth.  

52 

 
 
 
 
Box 2: Stylized NGEU impact simulations with QUEST - Bulgaria  

Model simulations conducted by the Commission using the QUEST model show that the economic 
impact of the NGEU in Bulgaria could lead to an increase of GDP of between 1.9% and 3% by 2026. 
After  20  years,  GDP  could  be  1.1%  higher.  Spillovers  account  for  an  important  part  of  such  an 
impact.  
According to these simulations, this would translate into up to 36 000 additional jobs. Cross border (GDP) 
spillovers account for 0.6 pp in 2026, showing the value added of synchronized expenditure across Member 
States (line 2). Even assuming that half of the expenditure is not productive, this still leads to a significant 
impact (line 3).  

Table  1:  QUEST  simulation  results  (%-deviation  of  real  GDP  level  from  non-NGEU  case,  linear 
disbursement assumption over 6 years)  

Scenario  
Baseline  
 of which spill over  
Low productivity  

2021   2022   2023   2024   2025   2026   2027   2028   2029   2030   2040  

1.5  
0.5  
1.2  

2.5  
0.6  
2.1  

2.5  
0.6  
1.9  

2.6  
0.6  
1.8  

2.8  
0.6  
1.9  

3.0  
0.6  
1.9  

2.2  
0.5  
1.1  

1.5  
0.4  
0.3  

1.6  
0.3  
0.5  

1.7  
0.2  
0.5  

1.1  
0.1  
0.5  

This stylized scenario does not include the possible positive impact of structural reforms, which can 
be substantial. A model-based benchmarking exercise shows that undertaking structural reforms that would 
result in halving the gap vis-à-vis best performers in terms of indicators of structural reforms could raise 
Bulgaria GDP by 9% in 20 years time, in line with findings for the EU average.  

Due to the differences in the assumptions and methodology, the results of this stylized assessment cannot 
be directly compared to the numbers reported in chapter 4 of Bulgaria’s Plan.  

Strengthening social cohesion 

Reforms and investments in education and skills are expected to address the persistent and 
significant skills gaps. These measures create the conditions for increasing economic and social 
resilience and are a powerful tool for social inclusion. The Bulgarian population is characterized 
by a relatively high percentage of low-skilled persons and low participation of the population (25-
64)  in  lifelong  learning  with  2.0%  in  2019  against  11.3%  for  EU-28.  In  addition,  the  share  of 
people with  at  least  basic digital  skills  is  around 29% of the  Bulgarian population  aged 16-74, 
while the EU average is 56%. Only 11% of people have skills above basic skills, representing a 
third of the EU average. To revert this  situation, the  Plan contains an important  component on 
education and skills that is expected to deliver  far-reaching structural changes to the Bulgarian 
education  system.  The  strengthened  policies  on  education  and  skills,  including  digital,  lifelong 
learning  and  vocational  training-  should  contribute  to  addressing  Bulgaria’s  challenges  in  this 
field. Important reforms and investments are also foreseen under the research and innovation and 
digital connectivity components to further reduce skills deficits.  

53 

 
 
  
  
 
  
 
 
 
Bulgaria faces a significant gender inequality challenge in terms of employment rate. In 2020, 
employability rate for the group age 20-64 was 8.9 pp higher for men. The Plan is expected to 
improve  the  overall  employability  of  the  population  through  a  transversal  promotion  of  equal 
opportunities,  enhancing  a  more  inclusive  and  resilient  labour  market.  The  Plan  also  covers 
investments in kindergartens and a reform on the mandatory inclusion of 4-year olds in pre-school 
education, which should support the labour market participation of women. 

Bulgaria  envisages  to  reshape  the  regional  policy  framework  and  to  promote  local 
development. In the years since the country’s accession to the EU, intra-regional disparities have 
significantly deepened. Also, the urban-rural axis reveals that the regional development disparities 
remain  a  challenge.  To  revert  this  situation,  the  Plan  includes  important  measures  to  reshape 
regional policy by fostering direct involvement of local communities in the management of  the 
European  funds  and  instruments.  This  should  strengthen  their  role  in  the  preparation  and 
implementation  of  the  integrated  territorial  strategies  and  projects,  resulting  in  a  greater  policy 
effectiveness.  Several regions  need to  address the scarcity of drinking water by  providing new 
and/or reserve water sources for the population. A large part of the population has a relatively low 
income, which requires the cost of services in the sector to remain socially sustainable. Alongside 
with  the new regional  development  approach, the  Plan envisages  the continuation of the water 
sector  reform  by  improving  the  regulatory  environment.  These  measures  should  increase  the 
competitiveness  and  sustainable  development  of  the  regions  of  the  country  as  well  as  the 
promotion of local development. 

The  Plan  is  expected  to  improve  the  effectiveness,  adequacy  and  coverage  of  the  social 
support system. Bulgaria faces structural challenges in the field of social inclusion with poverty, 
social exclusion and income inequality  recording very  high levels. These indicators, monitored 
through the Social Scoreboard accompanying the European Pillar of Social Rights, highlight the 
need for additional efforts to reduce social inequalities and make growth more inclusive (see Box 
3). The relative share of people at  risk of poverty  is  among the highest  in  the EU. The risk of 
poverty  is  significantly  higher  for  some  of  the  most  vulnerable  groups  of  the  population.  A 
significant  share  of  the  population  over  working  age  (65+)  was  at  risk  of  poverty  or  social 
exclusion in 2020 and just under one third of this population suffered severe material deprivation. 
Measures envisaged by the Plan aim at increasing the effectiveness, adequacy and coverage of the 
social support system by introducing a holistic approach to providing social support to persons and 
families from vulnerable groups and by the codification of social legislation. Key policies include 
the mitigation of shortcomings in the adequacy of the minimum income scheme, the completion 
of the reform on social services and an investment targeting the modernisation of the provision of 
long-term care for older people and people with disabilities. 

54 

 
 
 
 
Box 3: Employment, skills and social policy challenges in light of the Social Scoreboard 
accompanying the European Pillar of Social Rights  

The Social Scoreboard points to a recovering labour market, but overall outcomes remain 
below the pre-crisis period. The employment rate stood at 73.4% in Q3-2021, 0.7 pp below 
the previous year, and below the EU average (73.6%), against the background of a working-age 
population that is expected to decrease by 12.5% by 2030. For the low-skilled, the employment 
rate  (48.1%  in  2020)  remains  well  below  the  EU  average  (55%)  and  is  significantly  lower 
(39 pp)  than  for  the  high-skilled.  Moreover,  the  share  of  young  people  (15-29)  neither  in 
employment, nor in education or training (NEET) is high (18.1% in 2020 compared to 13.8% 
on average in the EU). At the same time, the employment rate of workers aged 55-64 increased 
steadily  (from  54.5%  in  2016  to  64.2%  in  2020),  surpassing  the  EU  average  (59.6%).  The 
disability employment gap is well above the EU average (33 pp vs 24.5 pp), with an employment 
rate  of  persons  with  disabilities  of  43.1%  in  2020, 
compared to 76.1% for those without. In 2020, only 
47% of the Roma were engaged in any form of paid 
work.  

levels  of 

including  high 

The  Social  Scoreboard  also  highlights  social 
income 
challenges, 
inequality and risk of poverty or social exclusion. 
In  2020,  the  income  of  the  richest  20%  of  the 
population was almost 8 times higher than that of the 
poorest 20%. The share of people at risk of poverty 
or social exclusion stood at 33.6% in 2020, among 
the  highest  in  the  EU.  The  rate  is  even  higher  for 
children  (36.2%),  older  people  (65+,  49.5%), 
persons with disabilities (52.3%) and Roma (79.4% 
in  2019).  14.4%  of  the  Bulgarian  population  spent 
40% or more of their household income on housing 
(i.e. 
cost  overburden), 
compared to on average 10% of the population in the 
EU.  Bulgaria  records  one  of  the  lowest  impact  of 
social  transfers  (other  than  pensions)  on  poverty 
reduction in the EU (20.4% in 2020), well below the 
EU average (32.7%). Gaps persist in terms of access 
to  social  protection,  notably  for  self-employed  and 
non-standard  workers.  In  addition,  the  healthcare  system  continues  to  face  challenges 
concerning accessibility, effectiveness and resilience. Access to formal long-term care services 
is also limited and the system is severely under-funded. The coverage of home care for older 
people is one of the lowest in the EU (11.6% versus 28.6% in the EU in 2019) and unmet needs 

experienced  housing 

55 

 
 
  
 
for medical care for this age cohort are significantly higher than the EU average (67.5% versus 
46.5% in the EU in 2019).  

Low  levels  of  basic  and  digital  skills  and  low  adult  participation  in  learning  pose 
important  challenges  to  Bulgaria,  also  in  view  of  adverse  demographic  trends  and 
accompanying the fair green and digital transitions. The participation rate of children below 3 
years in formal childcare stood at 15% in 2020, well below the EU average (32.3%). The early 
school leaving rate stood at 12.8% in 2020, above the EU average (9.9%). The challenge is 
particularly acute in certain regions and among disadvantaged groups, especially Roma. Only 
29%  of  the  population  (16-74)  and  57%  of  young  Bulgarians  (16-19)  report  basic  or  above 
basic  levels  of  digital  skills,  compared  to  56%  and  82%  respectively  in  the  EU.  Adult 
participation in learning (25-64) was well below the EU average in 2020 (1.6% versus 9.2%).  

The Plan includes measures fostering the availability of digital infrastructures, access to 
distance working and the enhancement of digital skills, which are supportive of the digital 
as well as of the green transition. The measures included under the Plan cover the large-scale 
deployment  of  digital  infrastructure,  the  digitalization  of  administrative  services,  as  well  as 
revisions  to  the  regulation  concerning  distance  working.  The  plan  also  promotes  skills 
relevance and adult learning, with a focus on digital skills. This encompasses changes to the 
regulatory frameworks for higher and vocational education and training and the development 
of an online platform for adult learning linked to the public employment  services.  Relevant 
measures in the field of education and training also include the enhancement of the relevance 
of higher education with the aim of addressing labour market shortages and promoting research, 
with a view to move forward the digital and green transitions. Together with the accompanying 
reforms, the investments aim to enhance a favourable investment environment and the skills of 
the Bulgarian population. ESF+ interventions will also focus on strengthening the quality and 
inclusiveness  of  education  and  trainings  as  well  as  access  to  employment,  upskilling  and 
reskilling measures. The synergies between the Recovery and Resilience Facility and other EU 
funds will help Bulgaria in contributing to reaching the 2030 EU headline target on skills.  

The Plan is expected to improve access to education, adult learning and healthcare, and to 
promote  social  inclusion.  Improved  access  to  education  will  result  from  investments  in 
education  infrastructures,  increased  options  for  learning,  including  online  classes,  and  the 
compulsory inclusion of 4-years-old in the education system, with implications for the labour 
market participation of women. On healthcare, broader access is expected to be achieved via the 
construction of outpatient care units, the enhancement of the provision of telemedicine services, 
the establishment of an air ambulance system, as well as through measures addressing shortages 
of healthcare professionals, including their unbalanced geographical distribution. As part of the 
Plan, Bulgaria plans to reform minimum income support, thus strengthening social safety nets, 
which,  in  combination  with  more  effective  activation,  contribute  to  the  efforts  targeting  the 
achievement  of  the  2030  EU  headline  target  on  poverty  reduction.  The  figures  of  the  Social 

56 

 
 
  
Scoreboard also point at the need for strengthening the provision of more tailored employment 
and social services, particularly for vulnerable and under-represented groups (e.g. persons with 
disabilities and Roma). To foster social inclusion, the Plan also includes measures to improve 
the provision and integration of employment and social services and to  modernize long-term 
care, with a focus on people with disabilities and older people. Bulgaria will also invest, in the 
context  of  other  EU  funds,  notably  ESF  and  ERDF,  in  actions  to  improve  the  capacity  and 
effectiveness of public employment services and better social services.  

Reducing vulnerability and increasing resilience 

The Plan aims to address relevant Rule of Law concerns. The Plan puts forward an ambitious 
reform agenda to improve the functioning of the judiciary system and the anti-corruption bodies. 
It also envisages reforms and investments in anti-money laundering, public procurement, whistle-
blower protection, regulation of lobbying, e-government and integrity of public servants. These 
measures are expected to strengthen the fight against corruption and organised crime and improve 
the business environment and national security. They are also set to boost the public trust in public 
systems  and  institutions,  which  is  essential  for  the  country’s  capacity  to  cope  with  various 
challenges.  

The  Plan  tackles  the  vulnerabilities  related  to  the  green  transition  and  environment 
protection and improves environmental resilience. Bulgaria commits to a law/strategy for coal 
phase-out, accompanied by fast deployment of renewable energy sources. Investments in energy 
renovation of buildings and renewables are expected to reduce energy needs by at least 30%. Apart 
from addressing the environmental vulnerability, these measures, combined with reforms to cope 
with the energy poverty, also contribute to the economic and social resilience of the economy by 
curbing dependence on energy imports and reducing energy costs for businesses, households and 
administration.  Another  green  transition  challenge  that  is  addressed  by  the  Plan  is  the  issue  of 
sustainable mobility. The high carbon intensity of transport in Bulgaria is tackled by investment 
in electric rolling stock, expansion of the Sofia metro and promotion of electric car mobility with 
building  of  10  000  charging  stations.  Other  vulnerabilities  linked  to  the  sustainable  use  of 
resources, such as water and waste management, circular economy, biodiversity and sustainable 
agriculture are partially addressed by a mix of investments and reforms in these areas.  

Bulgaria  aims  to  address  challenges  associated  with  the  various  aspects  of  digital 
transformation  via  a  comprehensive  package  of  measures.  Investments  in  the  broadband 
coverage in areas that are lagging behind aims at reducing the existing digital divide and hence the 
vulnerability of uneven territorial division. The Plan also emphasizes upgrading the digital skills 
at  school  and  in  adult  learning  and  includes  measures  to  support  businesses  in  adapting  their 
operations to the digital environment. These measures not only reduce key digital vulnerabilities, 
but also increase the resilience of the economy as a whole. With respect to public services and 

57 

 
 
 
 
other key sectors, an ambitious upgrade to the current level of digitization is envisaged, e.g. e-
government, interoperability of key registers, digitization of Post Offices, e-justice, digitization of 
healthcare, employment and social protection services, energy and transport services, construction 
sector  and  agriculture.  These  measures  bear  the  potential  to  reduce  costs,  boost  quality  and 
timeliness  of  services  and  improve  transparency  and  competition.  The  overarching  priority  of 
cybersecurity  is  also  present  in  many  of  the  measures  mentioned  above,  which  contributes  to 
strengthening the digital resilience in these areas. 

Some of the planned reforms and investments in the areas of education, training and skills 
are expected to improve resilience by improving the labour market relevance of skills. The 
Plan  includes  a  comprehensive  reform  in  the  education  and  training  systems,  encompassing 
vocational  education,  and  an  investment  in  a  platform  to  promote  up-  and  re-skilling  of  the 
Bulgarian population, which is expected to contribute to the acquisition of relevant skills, including 
digital, of the labour force. These measures, together with a reform of the research and innovation 
ecosystem, are expected to strengthen skills for the labour market and foster productivity, which 
should have a lasting impact on the resilience of Bulgaria's labour market. 

Improved  access  to  health  and  social  services,  and  improved  social  protection  are  also 
expected to increase overall resilience. The reforms and investments in healthcare are expected 
to strengthen the effectiveness and accessibility of the healthcare sector by focusing on the unequal 
distribution of access to healthcare across the territory. This includes an investment in outpatient 
units and a reform targeting the shortages of healthcare professionals in underservices areas of the 
country. In addition, the Plan includes a reform of social services, including the long-term care, 
and of the minimum income scheme, which are expected to improve the inclusiveness, adequacy 
and effectiveness of the social protection system in Bulgaria.  

Cohesion and convergence 

Different components of the Plan intend to reduce or address to a certain extent the social, 
economic  and  territorial  disparities  across  the  regions  in  Bulgaria.  Social  aspects  of  these 
disparities  are  intertwined  mainly  with  component  11  -  Social  inclusion  and  component  12  - 
Healthcare of the Plan. Bulgaria faces very high levels of income inequality and risk of poverty or 
social  exclusion,  which  is  even  higher  for  children,  older  people,  persons  with  disabilities  and 
Roma. At the same time, access  to  social protection  is  limited and the healthcare system faces 
challenges concerning accessibility, effectiveness and resilience. Social inclusion investment and 
reforms  focus  on  improving  social  protection  and  service  provision,  including  a  reform  of  the 
minimum income scheme. However, further efforts are needed to further decrease the country’s 
consistently high poverty rates. Further strengthening social safety nets can contribute to reaching 
the 2030 EU target on poverty reduction. 

58 

 
 
 
Cohesion-oriented investments and reforms are present in several sections of the Bulgarian 
Plan. Component 1 – Education and skills has a territorial dimension in terms of modernization 
of educational  institutions and the establishment  of centres for personal  development  of  youth. 
Component  3  –  Smart  Industry  anticipates  investments  in  different  regions  of  the  country. 
Component 4 – Low-carbon economy has a strong territorial approach in terms of the building 
stock supported when pursuing energy efficiency, but also in investments in infrastructure. The 
Plan is expected to support the sustainable renovation of residential buildings across the country 
and, therefore, also outside of large cities. This effort should contribute to increasing the prospect 
of regional employment in the construction sector in the different regions. While Bulgaria is the 
most energy intensive economy in the EU and its CO2 emissions in comparison to GDP remain 
the highest in Europe, the concentration of coal-fired plants justifies locally targeted measures to 
support regions with the highest number of people affected by the climate transition. Components 
7  and  8  envisage  relevant  territorial  and  local  interventions  in  terms  of  digital  and  transport 
connectivity. Improving digital connectivity, via the deployment of broadband and ensuring access 
to services in remote areas, has a significant impact in terms of territorial cohesion. The transport 
component covers several areas of the country, particularly in the northern, central and western 
regions, in line with the strategic importance of having a better connected country and correcting 
the current distort in favour of Southern regions and particularly the capital region. On the other 
hand,  a  key  objective  of  digital  connectivity  is  to  address  territorial  imbalances  related  to  the 
to  cover  smaller 
broadband  penetration.  Moreover,  specific 
agglomerations across the country (in component 9 – Local development) and in rural areas and 
Natura  2000  protected  sites,  through  the  biodiversity  and  sustainable  agriculture  components. 
Component  10  on  business  environment  includes  measures  on  digitalisation  of  the  judiciary 
aiming to enable remote court hearings and the electronic submission of documents. Component 
12 –Healthcare envisions the set-up of outpatient clinics in remote areas and the establishment of 
an air ambulance system, thus improving healthcare coverage across the territory. 

investments  are  planned 

The Bulgarian Plan includes a package of reforms and investments to improve productivity. 
Several  components  target  some  of  the  root  causes  that  have  contributed  to  Bulgaria’s  low 
competitiveness, which hinders the convergence path towards the EU average in terms of GDP per 
capita.  In  particular,  components  on  education  and  skills,  R&I,  smart  industry,  sustainable 
transport and business environment and the investments and reforms planned in the low-carbon 
economy  and  digital  components  could  contribute  to  boosting  productivity  and  achieving  the 
objectives of the climate and digital transition. Yet, investments in key assets such as transport 
infrastructure and human capital are still lacking in a large part of the country, contributing to the 
low innovation performance. The ICT uptake is low, and disparities are also driven by gaps in 
labour  productivity,  demographics  and  education  levels.  Measures  in  these  components,  while 
going in the right direction, may need to be complemented by reforms and investments that further 
enhance labour skills, promote innovation and strengthen public administration and institutional 
capacity. 

59 

 
 
Taking into consideration all reforms and investments envisaged by Bulgaria, its Plan is expected 
to have a high impact on strengthening the growth potential, job creation, and economic, social 
and  institutional  resilience  of  the  Member  State,  on  contributing  to  the  implementation  of  the 
European Pillar of Social Rights, including through the promotion of policies for children and 
youth,  and  on  mitigating  the  economic  and  social  impact  of  the  COVID-19  crisis,  thereby 
enhancing the economic, social and territorial cohesion and convergence within the Union. This 
would warrant a rating of A under the assessment criterion 2.3 of Annex V to the RRF Regulation. 

4.4. The principle of ‘do no significant harm’  

The RRF Regulation provides that no measure included in the Plan should lead to significant 
harm  to  any  of  the  six  environmental  objectives  within  the  meaning  of  Article  17  of  the 
Taxonomy Regulation14.  In line with  the RRF Regulation  and the Technical  Guidance on the 
Application  of  ‘do  no  significant  harm’  under  the  RRF  Regulation  (2021/C58/01;  ‘DNSH 
Technical Guidance’), Member States provide a ‘do no significant harm’ (DNSH) assessment, on 
which basis the Commission assesses whether each and every measure (i.e. each reform and each 
investment) included in the plans complies with the DNSH principle. Compliance with the DNSH 
principle is a necessary condition for the Commission to positively assess the Plan. Bulgaria has 
included  a  satisfactory  DNSH  assessment  for  each  measure  in  its  Plan  and  has  provided  more 
detail, when relevant, in accordance with the template provided by the Commission, and in line 
with  the  DNSH  Technical  Guidance.  The  Commission  has  assessed  whether  and  how  each 
measure in Bulgaria’s Plan complies with the DNSH principle on that basis.  

Each ‘do no significant harm’ assessment follows a two-step approach. The first step assesses 
whether there is a risk that a measure could do significant harm to one or more of the environmental 
objectives. In some cases, the assessment concludes that there is no risk of significant harm, in 
which case the measure is assessed as compliant with this objective of the Regulation. In cases 
where the analysis identifies a risk to a particular environmetnal objective, as a second step, a more 
detailed assessment is performed in which Bulgaria demonstrates the absence of significant harm.  

Bulgaria ensures that no significant harm is done to environmental objectives by selecting or 
designing  measures  complying  with  the  DNSH  principle,  and  by  substantiating  DNSH 
compliance  as  part  of  the  DNSH  assessment.  By  selecting  measures  that  either  contribute 
substantially  to  environmental  objectives,  or  have  no  or  an  insignificant  foreseeable  impact  on 
environmental objectives, many measures in Bulgaria’s Plan can be considered DNSH compliant 
from  the  outset  (e.g.  certain  measures  in  education  and  training,  labour  market,  public 
administration and justice, and digitalisation). Other measures are designed to ensure compliance 
with  DNSH,  including  broad  support  schemes  (e.g.  Economic  Transformation  Programme,  the 

14  The  six  environmental  objectives  comprise  (1)  climate  change  mitigation,  (2)  climate  change  adaptation, 
(3) sustainable use and protection of water and marine resources, (4) the circular economy, (5) pollution prevention 
and control, and (6) protection and restoration of biodiversity and ecosystems. 

60 

 
 
 
                                                           
programme  for  industrial  parks  and  the  Fund  for  promoting  the  technological  and  ecological 
transition of agriculture). For measures requiring a ‘substantive DNSH assessment’ according to 
the DNSH Technical Guidance (e.g. sustainable mobility, energy efficiency and renewable energy 
investments), Bulgaria has provided evidence and assurances substantiating that the measures do 
not lead to significant harm to any of the six environmental objectives.  

Bulgaria has committed to apply a number of DNSH requirements horizontally across the 
Plan. For example, in all measures that involve building renovations, compliance with the Energy 
Performance  of  Buildings  Directives  2010/31/EU  and  Directive  (EU)  2018/844  is  required. 
Vehicles to be procured must comply with high environmental performance standards, e.g. <50 g 
CO2 emissions / km in the case of light duty road vehicles. In case of special purpose vehicles, the 
best-available technology in that vehicle category should be supported (e.g. for helicopters to be 
purchased under the healthcare component). None of the investments and reforms included in the 
Plan is expected to affect or have significant effect to the areas and species protected by relevant 
national legislation, the Natura 2000 network of protected areas, UNESCO World Heritage sites 
and  Key  Biodiversity  Areas.  Where  relevant,  compliance  with  Strategic  Environmental 
Assessment/ Environmental Impact Assessments/ Appropriate Assessments will be ensured and 
the results of relevant assessments will be taken into account. 

Where needed, the requirements of the DNSH assessment are enshrined in the design of a 
measure and specified in a milestone or target of the measure. For instance, the Bulgarian Plan 
includes some broad measures spanning across sectors and activities, which are designed to be 
DNSH compliant (in line with Technical Guidance (2021/C58/01). These include measures such 
as  the  Public  support  programme  to  develop  industrial  parks  and  improve  their  infrastructure 
connectivity and the Economic Transformation Programme under the Smart Industry component, 
as  well  as  the  Fund  for  promoting  the  technological  and  ecological  transition  of  agriculture. 
Provisions  and  milestones  associated  to  these  measures  require  the  introduction  ofappropriate 
criteria in the development of the terms of reference of the calls for proposals or calls for interest. 
The terms of reference should ensure that all projects selected under these calls comply with the 
‘do  no  significant  harm’  principle,  by  preventing  activities  that  could  do  significant  harm  to 
environmental  objectives  (e.g.  activities  related  to  fossil  fuels,  activities  above  the  ETS 
benchmarks for free allocation, waste landfills and incinerators, among others) from being selected 
as part of the calls. For the activities under the Emissions Trading System, where the emission 
reductions are not substantially lower than the relevant benchmarks, an explanation on why this 
level of emission reductions cannot be achieved is expected to be provided. 

Taking  into  consideration  the  assessment  of  all  the  measures  envisaged,  no  measure  for  the 
implementation of reforms and investments projects included in Bulgaria’s Plan is expected to do 
a significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 
No 2020/852 (the principle of ‘do no significant harm’). This would warrant a rating of A under 
the assessment criterion 2.4 in Annex V to the RRF Regulation. 

61 

 
 
4.5. Green transition  

Climate target 

Bulgaria’s Plan correctly follows the methodology for climate tracking set out in Annex VI 
to the RRF Regulation.  It  identifies intervention fields  and corresponding coefficients  for the 
calculation  of  support  to  the  climate  objectives,  for  most  measures.  The  choice  of  intervention 
fields for the climate transition is well justified and reflects the nature, focus, objective or expected 
outcome of the investments.  

It should be noted that:  

 

the measures of the Plan often consist of several sub-measures – for these measures, the 
Plan  indicates  an  intervention  field  for  each  sub-measure  and  computes  the  climate 
contribution at sub-measure level;  

  where  relevant,  milestones  and  targets  include  specifications  that  ensure  that  the 
requirements of an intervention field are met (for instance, where intervention field 025bis 
–  “Energy  efficiency  renovation  of  existing  housing  stock,  demonstration  projects  and 
supporting measures compliant with energy efficiency criteria” is used, a target specifies 
that the measure must achieve the conditions of the intervention field i.e. on average, at 
least a medium-depth level renovation as defined in the Commission Recommendation on 
Building Renovation (EU) 2019/786; 

Measures supporting climate change objectives in the Plan account for EUR 3 696 million, 
which represent 58.9% of the Plan’s total allocation of EUR 6.27 billion. Of the twelve components 
in  the  Plan,  ten  components  include  expenditure  that  contributes  to  climate  objectives,  most 
notably the low-carbon economy, sustainable transport and smart industry. With a total of EUR 
2612.5 million, the largest climate contribution of the Plan results from the component low-carbon 
economy. 

Table 7: Contribution to climate objectives per component 

Component 

Total cost 
(EUR million) 

1.  Education and skills 
2.  Research and innovation 
3.  Smart industry 
4.  Low-carbon economy 
5.  Biodiversity 
6.  Sustainable Agriculture 
7.  Digital Connectivity 
8.  Sustainable Transport  
9.  Local Development 
10.  Business Environment 
11.  Social Inclusion 
12.  Healthcare 

733.53 
211.28 
800.67 
2612.51 
47.53 
233.83 
385.22 
665.79 
211.11 
188.08 
440.38 
367.96 

62 

Contribution to 
climate 
objectives 
(EUR million) 
110.92 
8.18 
181.07 
2612.51 
19.01 
85.45 
4.09 
552.18 
23.09 
0 
96.76 
0 

Share of 
contribution 
to climate 
objectives 
15.1% 
3.9% 
22.6% 
100% 
40% 
36.5% 
1.1% 
82.9% 
10.9% 
0% 
22% 
0% 

 
 
Green transition 

The  measures  in  Bulgaria’s  Plan  are  expected  to  effectively  contribute  to  the  green 
transition, and addressing the challenges resulting therefrom.  The Plan supports Bulgaria’s 
decarbonisation and energy transition objectives, meeting the country-specific recommendation in 
relation to contributing to “a progressive decarbonisation of the economy”.  

“Energy and climate investments and reforms envisaged in the Plan are consistent with the 
National Energy and Climate Plan (NECP). These include a large package of reforms, notably 
in relation to decarbonisation of the power sector, setting out a date for the coal phase-out and 
aiming to achieve a 40% reduction in CO2 emissions compared to 2019, including a regulatory 
cap kicking in 2026 to ensure that the achieved reductions are long lasting. The reform package 
also includes concrete measures to speed up the deployment of RES (e.g. investments to modernise 
the  grid  and  legislative  changes  to  shorten  permitting  procedures  and  ease  connection)  and 
commitments  to  more  than  tripling  RES  installed  capacity  within  four  years.  Finally,  the  Plan 
includes  market  liberalization  of  the  wholesale  and  retail  electricity  markets  and  governance 
reforms  to  ensure  a  level-playing  field  and  transparency.  Finally,  the  plan  includes  substantial 
investments in energy efficiency (over 1 billion EUR) and matching reforms to remove bottlenecks 
(e.g. establishment of a decarbonisation fund and amendments to the Condominium Act) In terms 
of investments, the Plan arrives at a high climate tracking contribution of 58.9.  

In  its  self-assessment  on  the  Do  No  Significant  Harm  principle,  Bulgaria  has  systematically 
provided  reassurance  that  none  of  the  proposed  measures  would  cause  significant  harm  to  the 
protection and restoration of biodiversity and ecosystems. More importantly, the Plan contains 
a dedicated component on biodiversity protection, with dedicated reforms and investments which 
amount to EUR 45.53 million. 

Renewable energy  

The  Plan  includes  reforms  and  investments  to  support  the  deployment  of  renewable 
electricity generation. By 2026, the following should be commissioned and connected to the grid: 
(i)  3.5GW  of  wind  or  solar  collocated  with    storage;  (ii)  10  MW  of  geothermal  electricity 
generation  capacity  by  2026;  and  (iii)  500MW  large-scale  electricity  storage  with  6,000MWh 
discharge over 12h by 2026. The total planned resource is EUR 342 million for RES and EUR 799 
million for electricity storage with an implementation period of 2022-2026.  

The Plan also includes a dedicated measure to support the development of pilot projects enabling 
the introduction of green hydrogen and biogas for industrial applications, as well as for their 
future use in transport and for the production of electricity and heat.  It is expected that 55MW 
green hydrogen and 7MW biogas will be commissioned. The total planned resource is EUR 35 
million with an implementation period of 2022-2026.  

Moreover,  the  Plan  includes  a  reform  aimed  at  reducing  the  administrative  burden  for 
investments from renewable sources concerning installation, connection and operation. The 

63 

 
 
reform is expected to (i) simplify licensing and permitting procedures for renewables (such as solar 
and onshore wind), including energy storage facilities, (ii) enable dedicated ‘go-to’ areas where 
onshore  wind  parks  would  be  compliant  with  environmental  legislation;  (iii)  simplify  the 
procedure for renewables installations for own use up to 1 MW (e.g. rooftop PV installations for 
households  and  SMEs).  The  Plan  also  includes  a  reform  aimed  at  unleashing  the  potential  of 
hydrogen technologies and hydrogen production and supply.  

Electricity network infrastructure 

The Bulgarian Plan includes an investment in electricity network infrastructure. The aim of 
this  investment  is  to  modernise  the  electricity  grid  through  the  introduction  of  state-of-the-art 
digital  tools  and  methods  to  provide  the  necessary  tools  for  the  management  of  the  electricity 
system  and  to  increase  its  flexibility  to  allow  for  increased  penetration  of  electricity  from 
renewable sources. Following its completion, a further capacity of 4,500 MW renewable energy 
could be integrated into the electricity system by Q4 2025. In addition, 1.8 GW at the borders with 
Romania and Greece would increase the net available interconnection capacity. The total planned 
resource is EUR 190 million with an implementation period of 2022-2025. As of last  year, the 
Bulgarian  day-ahead  electricity  market  is  coupled  with  Greece  and  Romania.  The  intraday 
electricity market coupling with Greece should be completed and operational by Q4 2022.  

Energy efficiency  

The Plan includes significant investment in the energy efficiency of buildings. The investments 
will  finance  energy  renovations  of  residential  and  public/private  buildings,  street  lightning  and 
renewables for households not connected to natural gas and/or heat transmission networks. The 
measures are expected to deliver at least 30% reduction of energy needs and lead to the primary 
energy  savings  of  1.1  TWh/year. The  total  planned  resource  is  EUR  924  million  with  an 
implementation period of 2022-2025.  

The Plan also features a reform to facilitate investments in energy efficiency renovations in 
residential buildings. The reform aims at tackling barriers to energy efficiency investments by 
facilitating  the  decision-making  by  owners  of  multi-apartment  buildings.  Moreover,  the  Plan 
includes a reform which consists in setting up a one-stop shop for renovations that is expected to 
reduce administrative burden linked to the renovation process by assisting citizens and businesses 
with  information,  technical  assistance  and  advice  different  issues  related  to  energy  efficiency 
improvement projects. In addition, the Plan is expected to contribute to tackling energy poverty 
and protecting vulnerable consumers by introducing in the Energy Act and secondary legislation 
a  definition  of  “energy  poverty”  and  criteria  for  identifying  households  in  energy  poverty  and 
vulnerable consumers and includes a reform aimed at boosting energy efficiency and renewable 
energy projects through the energy bills.  

Sustainable transport 

64 

 
 
The  Plan  includes  a  sizeable  allocation  to  sustainable  mobility  (EUR  665.8  million).  The 
following key measures will be supported: road decarbonisation measures such as the promotion 
of electric car mobility with construction of 10 000 charging stations, including fast ones, across 
the country, and new zero-emission and low-emission vehicles, reaching a total of 30 000 by mid 
2026; road safety measure to reduce the number of victims of road accidents by 30% from 2019 
to 2025 and reduce the number of road safety blackspot by 50% over the same period, new electric 
rolling stock for sub-urban and inter-regional rail transport; the introduction of a single ticket for 
passengers;  the  construction  of  three  kilometers  of  a  new  section  of  the  Sofia  metro;  the 
digitalisation  of  rail  transport  with  the  deployment  of  the  European  Rail  Traffic  Management 
System; a new intermodal terminal in Ruse; sustainable urban mobility pilot scheme with purchase 
of zero-emission public transport vehicles and charging station infrastructure.  

Water management 

Improving water management is one of the main environmental challenges that Bulgaria is 
facing. The Plan addresses existing investment needs in the component 9 on local development. 
The  component  includes  a  set  of  interrelated  and  reinforcing  investments  enhanced  by  a  water 
sector reform, all of which are aimed at modernising water resource management and making it 
more sustainable. The water sector reform is expected to optimise the regulatory framework for 
water supply and sewerage services. It consists of the adoption of a new law, the Water Supply 
and Sewerage Act, which aims to provide the conditions for consolidation in the provision of water 
supply and sewerage services and introduce uniform conditions for service quality and efficiency 
criteria to be met by the water supply and sewerage operators. The new legislation is expected to 
refine the tariff setting mechanisms, ensuring cost-based pricing for the use of the systems and the 
consumed  services  while  also  ensuring  financial  sustainability  of  the  operators.  The  water 
management  investments  included  in  the  Plan  consist  of  the  construction,  reconstruction  and 
modernisation  of  water  supply  and  sewerage  systems,  and  drinking  and  waste  water  treatment 
plants, as well as the digitalization of water management and improving the control of water use. 

Biodiversity 

The main risks to biodiversity in Bulgaria relate to the loss of habitats and the degradation 
of ecosystems. This is a result of urban and infrastructure development, unsustainable agriculture 
and the exploitation of species of economic importance. The Plan includes a dedicated component 
aiming at protecting and restoring ecosystems and natural habitats and species of European and 
national importance. The reforms and investments in this component are expected to contribute to 
building  effective  Natura  2000  management  structures  in  the  country,  as  well  as  to  restoring 
climate-related ecosystems and protecting biodiversity. 

Sustainable agriculture 

The  Plan  includes  measures  that  aim  at  enhancing  the  sustainable  management  and 
competitiveness  of  the  agricultural  sector  in  the  context  of  the  green  transition.  The  plan 

65 

 
 
includes  a  reform  for  adopting  a  National  Action  Programme,  which  is  expected  to  set  out  a 
framework for the management  and protection of the environment  and natural  resources in  the 
field of agriculture. The plan also includes dedicated investments that consist of setting up a Fund 
for promoting the technological and ecological transition of the Bulgarian agricultural sector, as 
well as a digitalisation measure that is expected to facilitate the automated data exchange between 
the administration and farmers. 

Taking  into  consideration  the  assessment  of  all  the  measures  envisaged,  the  Recovery  and 
Resilience  Plan  is  expected,  to  a  large  extent,  to  make  a  significant  contribution  to  the  green 
transition or to address the challenges resulting from it and ensures that at least 37% of its total 
allocation contribute to the climate target. This would warrant a rating of A under criterion 2.5 of 
Annex V to the RRF Regulation. 

4.6. Digital transition  

Digital tagging 

Bulgaria  correctly  follows  the  methodology  for  digital  tagging  in  Annex  VII  to  the  RRF 
Regulation  by  identifying  intervention  fields  and  corresponding  coefficients  to  calculate 
support to the digital objectives for each investment measure. It should be noted that: 

 

  Bulgaria has split the measures into sub-measures based on their costs whenever possible 
in  order  to  ensure  an  accurate  selection  of  the  intervention  fields  and  to  avoid  any 
overestimations of the contributions of certain measures to the digital objectives.  
In a limited number of cases, Bulgaria has indicated for the same measure two different 
intervention fields for the purpose of climate and digital tagging respectively. This has been 
done  when  the  measure  could  not  be  split  into  different  sub-parts,  when  no  single 
intervention field that reflects the contribution to both climate and digital objectives could 
be  applied  or  when  the  measure  was  considered  as  fully  or  partly  contributing  to  both 
climate and digital objectives.  

  The Plan does not propose any increased digital coefficients for any measure.  
  The choice of intervention fields for the digital transformation is well justified and reflects 

the nature, focus, objective or expected outcome of the investments. 

Overall, based on the methodology, the Plan contributes to digital objectives for  25.8% of 
Bulgaria’s  allocation  (this  amounts  to  EUR  1.62  billion)  and  the  digital  target  of  20%  is, 
therefore, considered to have been met. The most significant contributions to the digital target 
are included in component 7 (Digital Connectivity) and component 10 (Business Environment). 
In particular, in component 7, the Plan allocates EUR 371.6 million as digital contribution, while 
component  10,  focused  on  digital  transformation  of  the  public  sector  allocates  EUR  167.89 
million.  Additional  significant  contributions  are  made  by  component  1  (Education  and  Skills), 
earmarking EUR 299.26 million for the support of the development of digital skills as well as by 
component  4  (Low-carbon  economy),  which  dedicates  EUR  395.29  million  to  the  digital 
transformation of systems and processes of the Electricity System Operator and electricity storage. 

66 

 
 
Other  components  also  contribute  to  the  digitalisation  of  public  services  such  as  Local 
Development (EUR 57.73 million), Sustainable Agriculture (EUR 10.2 million), Social Inclusion 
(EUR 43.7 million) and Healthcare (EUR 36.47 million). Component 2 (Research and Innovation) 
contributes to innovation supporting the digital transition (EUR 15.69 million) and component 3 
(Smart  Industry)  contributes  to  the  digitalisation  of  businesses,  especially  SMEs  (EUR  15.65 
million). 

Table 8: Contribution to digital objectives per relevant component 

Component 

1.  Education and skills 
2.  Research and innovation 
3.  Smart industry 
4.  Low-carbon economy 
5.  Biodiversity 
6.  Sustainable Agriculture 
7.  Digital Connectivity 
8.  Sustainable Transport  
9.  Local Development 
10.  Business Environment 
11.  Social Inclusion 
12.  Healthcare 

Total 

Total cost 
(EUR million) 

Contribution 
to digital 
objectives 
(EUR million) 

Share of 
contribution 
to digital 
objectives 

733.5 
211.28  
 800.67 
2612.51  
 47.53 
233.83  
385.22  
 665.79 
 211.11 
188.08 
 440.38 
367.96 
 6 897.90 

299.26 
 15.69 
15.65 
395.29 
0  
10.2 
371.60 
202.61 
57.73 
167.89 
 43.7 
 36.47 
1 616.08 

 40.8% 
7.4%  
2.0% 
 15.1% 
0%  
4.4%  
 96.5% 
30.4% 
27.3  
89.3%  
9.9% 
9.9%  
25.8%  

As  shown  in  Table  8,  nearly  all  components  have  a  digital  contribution  that  has  been  tagged 
accordingly to the methodology set out in Annex VII to the RRF Regulation. This reflects a broad 
cross-cutting approach followed by the Plan in which digital related investments are included in 
the majority of the targeted policy areas and in eleven components. 

Digital transition 

Bulgaria’s  Plan puts a strong emphasis on the digital transition and addresses challenges 
resulting from it across all sectors. The measures of the Plan cover six of the seven priority areas 
identified  in  the  Annex  VII  to  the  RRF  Regulation:  connectivity,  human  capital,  digital  public 
services,  digitalisation  of  businesses,  investment  in  digital  capacities,  deployment  of  advanced 
technologies  and  digital-related  investment  in  R&D.  The  Plan  also  tackles  the  four  strategic 
priorities  identified  at  EU  level  and  reaffirmed  in  the  communication  on  Europe’s  Digital 

67 

 
 
 
Decade15:  digital  transformation  of  businesses,  skills,  digitalisation  of  public  services,  and 
infrastructures. 

Connectivity  

The reforms and investments in component 7 (Digital Connectivity) are expected to increase 
national broadband coverage with very high capacity networks (VHCN) in areas where there 
is insufficient commercial interest. The current low digital connectivity hinders the development 
of Bulgaria’s digital economy and underpins the digital divide between urban and rural areas. The 
reforms  are  expected  to  reduce  the  administrative  burden  and  streamline  procedures  and  fees 
associated with 5G deployment. In addition, the investment of 269 million aims to upgrade and 
extend  the  coverage  of  the  State  network  to  all  municipal  centers  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”).  The  measures  also  foresee  granting  effective  wholesale  access  to  the 
upgraded or newly constructed network to providers of services of general interest and telecom 
operators, thus maximising the impact and coverage of the investments. In addition, to stimulate 
5G development, the fiber backhaul will also be open to mobile operators. The measures included 
in the Plan therefore contribute to reducing the urban rural divide and to creating prerequisites for 
equal access to high speed connectivity services for all citizens. In addition, the Plan envisages the 
provision of access to access points for ultra-fast connection to the Bulgarian Academy of Science 
(BAS),  the  National  Supercomputing  Center  in  Sofia  High  Tech  Park  and  universities  and 
scientific institutes, enabling them to participate in European research networks such as GEANT. 
The investment in connectivity thus establishes the necessary connectivity infrastructure in order 
to foster research and innovation in Bulgaria, thereby supporting other prominent objectives of the 
Plan. 

E-government and digital public services 

The  Plan  includes  a  large  number  of  measures  in  several  components  aimed  at  the 
digitalisation  of  the  public  administration,  including  the  judiciary.  These  measures  are 
expected  to  contribute  to  reducing  the  administrative  burden  on  citizens  and  businesses, 
strengthening  interoperability,  and  increasing  the  quality  and  effectiveness  of  public  sector 
services.  The  wide-ranging  efficiency  gains  resulting  from  the  digitalisation  of  the  public 
administration, including the judiciary, are expected to have a lasting impact beyond the lifetime 
of the Recovery and Resilience Facility. 

The  Plan  is  expected  to  contribute  to  the  digitalisation  of  the  public  administration  and 
address  the  related  challenges  such  as  fragmentation,  lack  of  interoperability  and 
administrative  barriers.  The  digitalisation  of  the  public  administration  includes  reforms  and 
investments which support the consolidation of public information resources, systems and services 
as well as the availability of data and the possibility to use it more effectively. Key reforms and 

15 COM(2021) 118 - 2030 Digital Compass: the European way for the Digital Decade, 9 March 2021 

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investments  include  the  digitalisation  of  registry  data  in  the  public  administration  and  e-
certification based on information  in  registries.  These reforms  and  investments  are expected to 
facilitate  the  intra-registries  exchange  and  interoperability  as  well  as  the  quality  of  data  in  the 
public sector and the  related administrative services to citizens and businesses.  In addition, the 
establishment of the Spatial monitoring, control and management  center through upgrading the 
Aerospace Monitoring Centre is expected to contribute to generating and making available a broad 
range of data from more satellites and sensors, as well as from unmanned aircraft systems. The 
investment  in  the  digitalisation  and  modernisation  of  the  Bulgarian  Post  Office  is  expected  to 
enable  the  provision  of  e-government  services  in  remote  and  rural  areas  (where  the  central  or 
municipal authorities do not have any offices), services for capturing biometric data needed for 
Bulgarian ID documents (with biometric chips) and other complex administrative services in such 
areas.  This  investment  thus  contributes  to  improving  access  to  administrative  services  and  to 
enhancing the social and territorial cohesion within the whole territory of Bulgaria.  

The Plan also includes measures promoting the digital transformation of the construction 
sector in Bulgaria, including a reform covering the adoption of a long-term strategy to introduce 
the  Building  Information  Modelling  (BIM)  into  the  design,  execution  and  maintenance  of 
construction works and a related investment that will support a pilot phase for the introduction of 
BIM in  Bulgaria.  Moreover, an investment  included in  the  Plan supports the development  of a 
Unified Information System for Spatial Planning, Investment Design and Building Authorisation. 
This investment aims to reduce the administrative burden of citizens and businesses in relation to 
construction  by  setting  up  a  platform  for  the  provision  of  electronic  administrative  planning 
services and the authorisation of construction. 

The digitalisation of justice forms part of the efforts to digitalise the public sector. The key 
measures  in  this  respect  include  upgrading  the  Unified  Courts  Information  System,  the 
digitalisation of key judicial processes in the administrative justice system, and transformation of 
the  existing  information  and  communication  infrastructure  at  the  Prosecutor’s  Office  of  the 
Republic of Bulgaria. The investments are accompanied by reforms aimed at facilitating access to 
justice in civil, criminal, and administrative proceedings. The reforms are expected to enable the 
electronic submission of documents, preparation of court decisions as electronic documents signed 
by a qualified electronic signature, exercise of procedural rights and performing procedural actions 
in an electronic form, as well as holding court sessions in a remote and electronic environment. 
The reforms and investments supporting the digitalisation of justice are expected to enable faster, 
more efficient and accessible administration of justice.  

The Plan also supports the digitalisation of healthcare. The enhancement of e-health and digital 
innovation in healthcare in Bulgaria is supported by the completion of the implementation of the 
National Health Information System (“NHIS”) and by the development of a platform for medical 
diagnostics. The NHIS is expected to serve as an integrated digital environment for the collection 
and exchange of medical  information  (e.g. electronic records,  referrals, prescriptions  etc.).  The 
investment and accompanying reforms aim to eliminate the fragmentation, increase transparency 

69 

 
 
as well as quality and safety of medical care. The NHIS is to be connected to a pilot national Digital 
Medical Diagnostic Platform that will enable the generation of a database of digital images and 
their secondary processing through validated machine learning algorithms. The investments in a 
pilot project for telemedicine services in the offices of the Bulgarian Post in rural and remote areas 
should further contribute to the provision of telemedicine services also in underserved areas of the 
country. The Plan further envisages reforms consisting in the update of the legal framework in the 
country for e-Health (e.g. telemedicine, tele-diagnostics and tele-monitoring) and the adoption of 
the National Strategy for e-Health and Digitalisation of the Health System 2021-2030, which are 
expected to increase the efficiency and coverage of eHealth in Bulgaria.  

In addition, the Plan envisages the digitalisation of the national system 112 and extending 
the national coverage of the TETRA system. The TETRA system of the Ministry of Interior is 
expected  to  be  used  as  a  unified  radio-communication  system  to  provide  a  communication 
environment for management, interaction and coordination in the Ministry of Interior, as well as 
other  government  structures  responsible  for  crisis  prevention  accidents,  disasters  and  national 
security  issues.  The  reforms  and  the  corresponding  investments  are  expected  to  contribute  to 
enhancing the resilience and capacities to adequately respond to crisis situations.  

The component on social inclusion includes an investment in the digitalisation of employment 
and social services. This is expected to allow for a more flexible use of data (e.g. based on AI 
technologies) and more effective provision of services, including services to the vulnerable and 
disadvantaged  groups.  The  digitalisation  of  the  social  services  includes  an  investment  in  the 
construction of a data centre and the implementation of an IT system to manage information on 
the  services  provided  by  the  Social  Assistance  Agency  across  the  territory  of  the  country.  The 
digitalisation of employment and social assistance services is expected to contribute to increasing 
the efficiency and quality of the public services, reducing administrative barriers and promoting a 
user-centric  approach  through  a  more  effective  use  of  data.  The  component  also  covers  the 
digitisation  of  collections of museums, libraries,  and archives, with  the objective of improving 
accessibility and fostering preservation of such resources.  

The Plan significantly contributes to the digitalisation of energy and transport systems and 
transport. In particular, the Plan envisages investments in smart energy systems and smart meters. 
The  investment  includes  a  comprehensive  programme  for  the  overall  digital  transformation  of 
systems and processes of the Electricity System Operator covering the automated management of 
substations, upgrade of the supervisory control and data acquisition system  (SCADA) with  the 
introduction of remote back-up, extension and upgrade of telecommunication network, including 
a  comprehensive  cybersecurity  system  and  upgrade  of  the  electricity  markets  administration 
systems. The aim of this investment is to increase the penetration of renewable energy sources, to 
increase flexibility in the operational management and monitoring of the electricity system and the 
net cross-border transmission capacity at borders with Member States (i.e. Romania and Greece). 
Moreover, the Plan includes a significant investment in electricity storage. The project leverages 
the complex implementation of the smart grids concept, ensuring a high degree of observability, 

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accuracy of operational planning, maneuverability and speed of the electricity system, including 
the prevention and / or management of accidents. Battery energy storage systems are expected to 
provide viable solutions for improving efficiency and reliability in smart grids.  

The digitalisation of railways also features in the Plan. The Plan includes the upgrade to the 
European  Rail  Traffic  Management  System  (ERTMS),  enhancing  the  efficiency  and  safety  of 
railways and the interoperability with other European rail networks. It also includes a pilot scheme 
to support sustainable urban mobility through the development of Intelligent Transport Systems 
(ITS),  and  integrated  digital  solutions  to  improve  the  efficiency  and  effectiveness  of  public 
transport as well as infrastructure for safe urban mobility. The measures included in the Plan are 
therefore expected to contribute to the twin transition and facilitate the decarbonisation of transport 
and energy systems.  

Human capital 

One  of  the  priorities  of  the  Plan  is  the  improvement  of  digital  skills  with  significant 
investments in the component on education and skills. The investment in digital skills is focused 
on adapting the skill set of the workforce to new labour market needs and promoting wider uptake 
of digital technologies in socio-economic processes and services. The measures include the setting 
up of a national online platform for adult learning and a network of digital clubs throughout the 
country,  which  enables  access  to  the  platform  free  of  charge.  In  addition,  training  for  the 
acquisition of basic  and  medium-level  digital skills  should  be offered by  certified organization 
based on curricula consistent with the European Digital Competence Framework. The measures 
have  a  strong  socio-economic  focus  as  they  aim  to  increase  the  level  of  digital  skills  also  of 
unemployed people and are inclusive as people without access to internet will be provided with 
the  opportunity  to  complete  trainings  in  the  offices  of  the  Employment  Service.  As  regards 
education of pupils, another key investment to improve digital skills is the setting up of STEM 
centers and STEM laboratories in schools, including high-tech classrooms, which aim to increase 
digital  literacy  and  promote  interest  and  skills  in  subjects  related  to  natural  and  engineering 
sciences, artificial intelligence, robotics, IT, natural sciences etc. A national STEM center acts as 
a central unit and develops the content, tools and methodologies to support the trainings of both 
teachers and students.  

Investment in digital capabilities and deployment of advanced technologies 

The Plan also includes measures to support businesses in adapting their operations to the 
digital  environment.  Measures  include  a  voucher  scheme  for  the  digitalisation  of  SMEs, 
supporting  activities  such  as  digital  marketing  services,  web-based  ICT  services  for  platforms, 
software solutions for the optimization of management, production and logistic processes. Another 
important  focus  of  the  investment  is  the  increased  cybersecurity  capabilities  in  SMEs.  The 
component  on  research  and  innovation  also  supports  the  technology  transfer  and  cooperation 
between  enterprises,  research  centers  and  higher  education  sector  and  the  digitalisation  of 

71 

 
 
businesses. The Plan also includes investments in the deployment of advanced technologies, such 
as quantum technologies.  

Taking into consideration the assessment of all the measures envisaged, the Plan is expected, to a 
large extent, to make a significant contribution to the digital transition or to address the challenges 
resulting from it and ensures that at least 20% of its total allocation contribute to support digital 
objectives. This would warrant a rating of A under criterion 2.6 of Annex V to the RRF Regulation. 

4.7. Lasting impact of the plan  

Structural change in administration and institutions  

The Bulgarian Plan contains measures to strengthen the administrative capacity of public 
institutions, notably in the judiciary. The business environment component contains a number 
of key reforms designed to improve the functioning of the judiciary system, e.g. through measures 
to  ensure  the  accountability  and  criminal  liability  of  the  Prosecutor  General,  to  enhance  the 
capacity of the Inspectorate with the Supreme Judicial Council to fight corruption in the judiciary, 
to ensure more efficient proceedings for insolvency and other administrative cases, and measures 
fostering the wide use of mediation, and an improved access to justice. Apart from the judicial 
reform, improvements in the capacity of anti-corruption bodies, the integrity of public servants 
and the efficiency of anti-money laundering supervisory authorities feature in the Plan. In addition, 
the strengthened administrative capacity in the social support system should lead to a better quality 
of social services. 

The investments in key areas of the Plan are complemented with measures to strengthen the 
quality  of  public  services.  The  Plan  aims  to  reduce  barriers  to  business  activity  through  the 
introduction of one-stop shops and by increasing the administrative capacity for strategic planning 
as  well  as  transparency  through  the  establishment  of  new  institutions.  The  accompanying 
administrative reforms in the areas of research and innovation include the adoption of a law on 
research and innovation (Research and Innovation Act). The low carbon component provides for 
the creation of one-stop  shops for energy renewal, establishment of a  Green Energy Transition 
Commission and a regulatory mechanism to ensure that CO2 reductions in the power sector, as 
achieved under the Plan, are maintained beyond 2026 and until the date of completion of the coal 
phase out. The planned upgrade of the Single Information Points aims to facilitate the services to 
the operators of electronic communications networks.  

Structural change in policies  

The policy changes in the business environment component are aimed at strengthening the 
growth  potential  and  the  resilience  of  the  Bulgarian  economy  by  addressing  the  existing 
barriers  and  inefficiencies.  The  ambitious  reforms  and  investments  in  public  procurement, 
whistle-blower protection, regulation of lobbying, e-government, digitalisation of the construction 

72 

 
 
 
sector,  and  governance  of  state-owned  enterprises  would  improve  transparency  and  level  the 
playing field for businesses.  

The investments in smart industry, industrial parks, green and digital transition, sustainable 
agriculture,  transport,  and  water  infrastructure  are  supported  by  policies  to  stimulate 
business  activity  and  investment.  The  reforms  include  more  favourable  conditions  for  the 
development  of  industrial  ecosystems,  energy  market  liberalisation,  lower  barriers  for  network 
operators, better regulation of public transport services, improved territorial planning, enhanced 
road safety management, promotion of electro mobility and strengthened regulatory framework in 
the water supply and sewerage service. 

The reforms and investment in education, healthcare and social protection are addressing 
long-standing problems in these systems. This includes underfunding, an outdated material base 
and  inefficiencies  that  have  led  to  inadequate  quality  of  the  provided  services.  Apart  from  the 
investments in the modernisation of buildings and equipment and in the digitalisation of public 
and private entities, the Bulgarian Plan envisages ambitious reforms. In education, the reforms in 
the  Plan  aim  to  foster  the  acquisition  of  necessary  skills  by  updating  the  curricula,  prioritizing 
STEM  profiles  in  admission  plans  and  fostering  stakeholders’  involvement;  to  achieve  more 
flexibility,  digitalisation  and  inclusiveness  in  the  educational  process  by  enabling  distance  and 
hybrid learning, the inclusion of four year-old children in preschool education and opening and 
adapting  vocational  training  for  school  dropouts;  and  to  create  proper  incentives  and 
and standardisation in higher education via introducing a financial model that rewards quality of 
education and  research  and  to  strengthen prevention  of  plagiarism.  In  healthcare,  the  policy  is 
oriented towards improving the territorial balance of healthcare services, addressing the specific 
challenges in the different parts of the country, tackling setbacks in prevention and treatment of 
socially significant diseases, and ensuring adequate funding and better access to outpatient care 
and eHealth. In social services, the expansion of  social support and the increased coverage and 
adequacy level of minimum income is expected to strengthen the social safety net, thus bolstering 
the resilience of the system to adverse developments. 

Lasting impact  

The  measures  in  Bulgaria’s  Plan  address  the  root  causes  of  critical  inefficiencies  and 
bottlenecks.  The  reform  in  the  judiciary  and  the  anti-corruption  bodies  is  far-reaching  and  is 
expected to improve the checks and balances and administrative capacity in these systems. In the 
climate change area, a law/strategy for coal phase-out is accompanied by the fast deployment of 
RES and the ambitious plan for energy renovation of buildings, in order to achieve sustainable 
decarbonisation of the economy. Investments in the electric public transport and promotion of the 
electric car mobility contribute to decreasing the substantial carbon footprint of the transport sector 
in Bulgaria. The digital transformation of the economy is targeted via complementary measures to 
provide  public  e-services,  support  SMEs  and  upgrade  the  digital  skills  of  the  population.  By 
reforming the education and vocational training systems to ensure a better quality of education, 

73 

 
 
more relevant skills and better inclusiveness, and by strengthening the employment services, the 
Plan addresses the key issue of skill shortages and labour market mismatches. The reforms in the 
healthcare and social services sectors target the long-standing issues of coverage and adequacy of 
services  to  improve  the  health  and  social  status  of  the  population.  Overall,  having  designated 
strategic  bodies  and  a  strengthened  implementation  and  control  capacity  should  ensure  the 
sustainability of these measures. Reforms to improve the research and innovation ecosystem and 
foster investments in these fields by public research institutions as well as innovative businesses 
are also expected to contribute to the lasting impact of the plan.  

The  drafting  process  of  the  Bulgarian  Plan  followed  mostly  a  bottom-up  approach  that 
contributed  to  the  comprehensive  nature  of  the  measures.  The  Plan  has  been  discussed  by 
various stakeholders and in the Parliament. The major challenge of decarbonisation is addressed 
by the Plan, and adequate measures to mitigate the socio-economic impact will need to be devised, 
including through the Just Transition Fund, taking into account the partnership principle and in 
consultation with local and regional stakeholders in the coal regions. 

Taking into consideration all reforms and investments envisaged by Bulgaria in its recovery and 
resilience  plan,  their  implementation  is  expected,  to  a  large  extent  to  bring  about  a  structural 
change in the administration or in relevant institutions and or in relevant policies and to have a 
lasting  impact.  This  would  warrant  a  rating  of  A  under  criterion  2.7  of  Annex  V  to  the  RRF 
Regulation 

4.8. Milestones, targets, monitoring and implementation  

The  plan  includes  206  milestones  and  140  targets  that  appropriately  reflect  the 
implementation  of  the  measures  over  the  entire  life-cycle  of  the  Bulgarian  recovery  and 
resilience plan. The achievement of milestones and targets will be verified using a detailed set of 
indicators, which is sufficiently clear and comprehensive. The milestones and targets are relevant, 
well-defined, and balanced across the different measures. In the first phase of the plan, milestones 
are the predominant monitoring device, in the majority of the cases relating to the entry into force 
of the legal framework or the selection of projects. During the later years, the implementation of 
the projects is typically monitored using final output targets. The milestones and targets represent 
the key steps of the measures and appropriately and realistically indicate whether the measures 
have been implemented. Hence, the proposed milestones and targets can be considered as in line 
with the long-term objectives of the plan.  

The  total  number  of  milestones  and  targets  is  set  at  346,  reflecting  the  large  number  of 
measures and sub-measures in the Plan. Where relevant, milestones and targets are specified in 
such  a  way  that  they  ensure  compliance  with  the  ‘Do  no  significant  harm’  principle  and 
appropriately justify the climate and digital tagging of the measure. 

The arrangements proposed by Bulgaria in its Plan are expected to be adequate to ensure effective 
monitoring  and  implementation  of  the  recovery  and  resilience  plan,  including  the  envisaged 

74 

 
 
timetable, milestones and targets, and the related indicators. This would warrant a rating of A the 
assessment criterion 2.8 of Annex V to the RRF Regulation. 

4.9. Costing  

Bulgaria has provided individual estimated costs for all the measures in the Plan to which a 
budget is allocated. Bulgaria has provided generally clear and sufficient information to justify the 
cost estimates for each measure in the plan that has an associated cost, and where necessary at the 
sub-investment  level.  The  evidence  provided  by  Bulgaria  is  sufficient  to  conclude  that  the 
estimated total cost of the plan is reasonable and plausible and in line with the nature and type of 
the envisaged measures. For the majority of measures, calculations behind the cost estimates are 
provided, and whenever available, comparative cost data are provided. For certain measures, more 
details could have been provided to determine how the final budget was computed. For demand-
driven measures (such as investments in energy efficiency in buildings, or support programmes 
for businesses), a reference to the full budgetary execution, and, where appropriate, to the expected 
number of beneficiaries, have been included, providing further reassurance with regards to the cost 
estimates. The cost estimates of the Plan have been reviewed by the Bulgarian Executive Agency 
for  European  Funds  Audit,  which  stated  that  the  cost  estimates  are  complete,  reasonable  and 
plausible within the meaning of the Recovery and Resilience Facility regulation, and they do not 
have any other source of funding.  

Evidence  was  provided  establishing  the  eligibility  of  the  costs.  All  costs  are  incurred  after 
February 2020 and do not substitute recurring national budgetary expenditure, unless in a limited 
number of duly justified cases in which the Plan includes labour costs for temporarily recruited 
civil servants whose work is essential to the successful implementation of  the measures. Value 
added tax has been consistently excluded from the calculations behind all  investments. For the 
large  majority  of  measures,  cost  estimates  are  detailed  and  well-substantiated  and  based  on  a 
variety of sources, including previous investments of similar types. Where information on previous 
similar investments  was  not  available, price quotes and, in  a few rare  cases, publicly  available 
pricing  information  was  provided.  The  template  tables  are  duly  completed  with  the  necessary 
costing information on the methodology and are consistent with the project fiches.  

Reasonable costs 

Cost estimates for most of the measures in the Plan are reasonable. In the majority of cases, 
the cost estimates are presented clearly and are appropriate for the specific investments. They are 
clear  and  understandable,  although  the  level  of  details  provided  varies  across  components  and 
measures. For the large majority of measures, it is clear from the document and its annexes how 
Bulgaria calculated the amounts estimated. For certain measures, more details on the calculations 
could  have been provided.  The underlying assumptions  behind  the cost estimates  are  generally 
sound, although in a limited number of cases they could be justified better or more clearly. On 
occasions, when deriving costs from similar projects, adjustments made are not fully explained.  

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Plausible costs 

The  estimated  total  costs  of  the  Plan  are  in  line  with  the  nature  and  the  type  of  the 
investments  envisaged.  Bulgaria  has  provided  a  wide  array  of  supporting  documents  as  a 
justification for the cost estimates: studies, reports, and calculation sheets. In most of the cases, 
Bulgaria  has  provided  information  on  the  cost  of  similar  investments  carried  out  in  the  past 
whenever these were available. Where this was not available, as for instance for novel projects, 
Bulgaria has provided price quotes or pricing information from publicly available sources. The 
estimated cost of investments included in the plan is in line with similar investments, including 
those funded by other EU programmes, if available. For certain investments, while costs remain 
plausible, they are in the high range compared to the costs of similar past investments, but there 
are also measures for which they are in the low range. Cost estimates are generally plausible, taking 
into  account  the  limits  of  an  ex-ante-based  assessment  of  cost  estimates.  The  output  targets 
provided  in  the  Plan  for  investment  are  commensurate  with  the  costing  justifications  and 
assumptions provided. 

No double Union funding 

Bulgaria has provided information on whether parts of the proposed measures under the 
Plan are covered or planned to be covered by other EU programmes and instruments. In the 
few cases where similar investment are financed though other EU funds (ERDF, ESF or other), 
Bulgaria  has  provided  information  on  the  name  of  the  instruments,  the  amounts  covered  or 
expected to be covered, and a clear description of which parts of the measures are expected to be 
covered. These amounts are clearly identified, and the measures financed through the different 
funds are in the majority of the cases well defined. In several instances, measures financed under 
the RRF and other EU programmes and instruments  or national  funds are complementary, and 
there  are  synergies  between  the  different  measures.  The  audit  and  control  system  provides 
sufficient assurance that the same costs will not be financed from different sources (see Section 
4.10 Adequacy of arrangements to avoid double funding from RRF and other EU funds). 

Commensurate and cost-efficient costs 

The Plan is expected to effectively help address a significant subset of challenges identified 
in the country-specific recommendations. As discussed in Sections 4.1 and 4.3, the Plan contains 
measures that are expected to support economic growth and economic  cohesion in an inclusive 
manner. In particular, this means that the Plan should address the weaknesses of the Bulgarian 
economy, boosting its growth potential, stimulating job creation, and mitigating the adverse effects 
of  the  crisis.  Several  of  these  measures  are  also  expected  to  contribute  effectively  to  the 
implementation  of  the  European  Pillar  of  Social  Rights,  including  through  the  promotion  of 
policies for children and young people. The control and audit system that will be put in place for 
RRF-related spending and the public procurement system will further support the objective of cost-
efficiency.  It is deemed that the costs of the Plan are commensurate to its economic and social 
impact.  

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The justification provided by Bulgaria on the amount of the estimated total costs of the Plan is to 
a  medium  extent  reasonable,  plausible,  in  line  with  the  principle  of  cost-efficiency  and  is 
commensurate to the expected national economic and social impact. Bulgaria provided sufficient 
information and evidence that the amount of the estimated cost of the reforms and investments of 
the recovery and resilience plan to be financed under the Facility is not covered by existing or 
planned Union financing. This would warrant a rating of B under the assessment criterion 2.9 of 
Annex V of the RRF Regulation. 

4.10. 

Controls and audit  

Robustness of internal control system and distribution of roles and responsibilities 

The  Plan  adequately  describes  the  system  for  the  implementation  of  the  Recovery  and 
Resilience Plan in Bulgaria. The structures responsible for the organisation and coordination of 
the Plan have been designated by a Decision of the Council of Ministers 568, in force since 2nd 
August 2021.  

For each reform or investment there is a responsible body defined in the Plan together with 
the description of the reform/investment and timeline.  For each of the milestone and target 
there is a verification mechanism described. There is no description of the planned management 
verifications  for  the  fulfilment  of  the  milestones  and  targets  at  the  level  of  each  component 
separately. However, the description at Plan level applies for all individual components. 

Adequacy of control systems and other relevant arrangements 

The  Bulgarian  authorities  describe  in  the  Plan  the  measures  to  be  applied  to  prevent  the 
occurrence of fraud, corruption and conflict of interest. These include: code of ethical conduct 
of civil servants, signing of the declaration on the civil servants’ awareness of the definition of 
irregularity  within  the  meaning  of  Regulation  No  2988/95,  as  well  as  definitions  of  fraud  and 
corruption; signing of a declaration of absence of conflict of interest; awareness of procedures for 
reporting alerts and suspicions of fraud, corruption and conflict of interest; signing of declaration 
of assets and interests; ex-ante checks by the Public Procurement Agency; carrying out of fraud 
risk assessments by the Monitoring and Reporting Structures and the National Fund Directorate 
(using  the  fraud  risk  self-assessment  tool);  and  training  of  participants  in  the  process  of 
implementing and monitoring the Plan. It is worth noting that in view of the definition of Article 
61 of the Financial Regulation, further measures should be taken to prevent conflict of interest 
which  include,  for  example,  the  use  of  data  mining  tools  for  ex-ante  checks.  However,  the 
specification of measures to combat fraud, corruption, double funding and conflict of interest and 
arrangements  for  reporting  and  correcting  serious  irregularities  shall  be  included  in  the  Act 
approving  the  Management  and  Control  System,  which  shall  be  approved  and  enter  into  force 
before the submission of the first payment request. This will be implemented through a dedicated 
milestone.  

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For the management and the monitoring of the RRP, the Bulgarian authorities will upgrade 
the existing information system for management and monitoring of EU funds (UMIS). They 
have confirmed that the following elements  will be filled in  the system by  the  final  recipients: 
contracts  concluded  with  contractors;  supporting  and  payment  documents;  documents  proving 
performance – certificates, acts, etc.; payment forecasts; documents proving that the stages and 
objectives have been met. Final recipients are also responsible for record keeping, such as statistics 
and other data related to financing, as well as records and documents in electronic format for 5 
years after payment of the balance. By concluding an operational agreement, each final recipient 
agrees to collect and enter in the IT system the following data under Article 22 (2) (d) of Regulation 
(EU) No 2021/241. The storage of the required information is provided in the IT system and for 
control and audit purposes the system’s administrative officer provides access to it, subject to the 
provisions  of  the  applicable  legislation  relating  to  the  protection  of  personal  data.  Checks  of 
milestones and targets by the Audit Body will aim to confirm that the reported milestones/targets 
by  final  recipients  are  met  and  the  related  data  are  complete,  accurate,  reliable,  correctly 
aggregated, evidence-based, recorded in the national information system and subject to effective 
controls. The collection of data on progress and the reporting of the stages and objectives with the 
requests for payment to the EC is carried out by the National Fund Directorate. A milestone on the 
repository system features has been added to the Plan that provides reassurance that the IT system 
will be operational, with the basic functionalities to track the milestones and targets, before the 
first  payment  claim  and  that,  all  categories  of  data  required  by  the  RRF  Regulation  will  be 
collected.  

Adequacy of arrangements to avoid double EU funding  

The arrangements for avoiding double funding are clearly described in the Bulgarian Plan. 
All of the participants of the implementation and control of Plan ensure that double funding from 
RRF  and  other  EU  funds  is  avoided  –  in  each  technical-financial  report  presented  by  the  final 
recipient or the Monitoring and Reporting Structures, up-to-date information will be provided on 
related projects  or investments that the final  recipient implements  with  funding from other EU 
funds/programmes. Double-funding checks are carried out both for the cost ratio, and in relation 
to the investments in their entirety.  

The Plan outlines the specific checks that will be carried out to prevent double funding from RRF 
and other EU funds during the implementation of the investment, i.e.: 

- 
- 
- 

checks in the IT system for structural funds; 
checks in the Financial Transparency System; 
check  of  the  existence  of  an  adequate  accounting  system  of  the  final  recipients 
distinguishing between different funding; 
-  declaration of absence of double funding. 

Bulgaria also declares that there is a clear separation of costs between RRF and other EU funds 
for each measure. In addition, they state that the Audit body carried out a review of the financing 

78 

 
 
and  quantification  of  expenditure.  The  provided  procedures  are  expected  to  contribute  to  the 
exclusion of the possibility of double funding. In case there is doubt about overlapping activities, 
additional information may be requested from the European office responsible for the programme 
and  the  corresponding  grant/contract.  The  verification  of  the  information  in  the  Financial 
Transparency System related to related projects financed from sources outside the RRF aims at 
avoiding double funding as well. 

Legal empowerment and administrative capacity of control function 

Since the ministries/bodies described in the Plan are already part of the national set up, it is 
assumed that these bodies have already the legal mandate to exercise these tasks. However, 
the final approval of the Management and Control Systems in the specific context of the RRF is 
introduced as a milestone.  

The  Bulgarian  Plan  outlines  the  administrative  capacity  of  staff  involved  in  the 
implementation, control and audit of the Plan. The National Fund Directorate of the Ministry 
of Finance consists of 60 qualified experts. The Central Coordination Unit Directorate (responsible 
for the development of the National Plan for Recovery and Resilience) has 60 people staff. The 
Directorate for Economic and Financial Policy at the Ministry of Finance – 41 people staff. The 
Audit of EU Funds Executive Agency has a staff headcount of 72 people. However, it is mentioned 
that if the need arises, external persons with specific expertise, knowledge and skills to perform 
specific  audit  tasks  might  be  involved  under  specific  conditions.  The  Bulgarian  authorities 
included a milestone on the workload analysis carried out for the National Funds Directorate and 
for the Audit Agency, taking into account the burden arising from the Recovery and Resilience 
Facility. The analysis shall be carried out before the first payment request and provide adequate 
information in terms of administrative capacity needs with a view to reaching them in a timely 
manner, including by developing a set of recommendations to address insufficient capacity where 
necessary.  Based  on  the  analysis  and  recommendations,  the  decision  on  the  allocation  of  the 
necessary resources to the National Fund Directorate and the Audit Agency, shall be taken before 
the first payment request. 

The arrangements proposed by Bulgaria in the recovery and resilience plan to prevent, detect and 
correct  corruption,  fraud  and  conflicts  of  interest  when  using  the  funds  provided  under  the 
Facility, including the arrangements aimed to avoid double funding from the Facility and other 
Union programmes, are assessed as acceptable provided that the pending issues are addressed 
before the first payment request, through the dedicated milestones. This would warrant a rating of 
A under the assessment criterion 2.10 of Annex V to the RRF Regulation. 

79 

 
 
 
 
4.11. 

Coherence  

Mutually-reinforcing measures 

Each  pillar  is  built  around  components  which  include  overall  consistent  packages  of 
mutually reinforcing and complementary reforms and investments. In addition, in order to 
create conditions  for effective investments  and to  address  implementation barriers, reforms  are 
concentrated  in  the  first  years  of  the  Plan.  Investments  and  reforms  proposed  within  any 
component do not contradict or hinder the effectiveness of measures from other areas of the plan. 
The measures in each of the individual components are mutually reinforcing, as investments are 
accompanied by reforms that aim to resolve structural underlying challenges. The Plan displays 
some  thematic  interlinkages  and  synergies,  namely  those  related  to  digital  transformation  and 
green transition. In addition, measures contributing to an improved business environment support 
all investments included in the RRP, while investments and reforms in education and skills are 
also expected to foster the digital transition as well as research and innovation. Hence, the Plan is 
based on a consistent vision, showing coherence within the components of the four different pillars 
and between the objectives of each component. 

Pillar 1 (Innovative Bulgaria) aims at increasing the competitiveness of the economy and the 
transformation  also  in  an  economy  based  on  knowledge  and  smart  growth  through  mutually 
reinforcing reforms and investments in education and skills, research and innovation and business 
transformation.  The  development  of  digital  and  STEM  skills,  supported  by  a  comprehensive 
educational reform and investments in modernised infrastructure, play a key role for enhancing 
the  science  and  innovation  capacity  of  the  country  and  the  technological  transformation  of 
businesses.  

Pillar 2 (Green Bulgaria) supports the sustainable management of natural resources through a 
broad set of mutually reinforcing reforms and investments in the decarbonisation of the economy, 
enhancing biodiversity and the development of sustainable agriculture. Measures on phasing-out 
lignite  and  coal  fired-power  plants  are  complemented  with  the  deployment  of  renewables  and 
alternative energy sources, as well as investments for improving energy efficiency. 

Pillar  3  (Connected  Bulgaria)  includes  reforms  and  investments  in  transport  and  digital 
connectivity, as well as more efficient water management throughout the country, which jointly 
contribute  to  reducing  territorial  disparities,  in  particular  on  the  urban-rural  axis.  Furthermore, 
transport  connectivity  interventions  also  contribute  to  the  decarbonisation  objective,  while 
investments  digital  connectivity  can  help  increase  the  productivity  and  innovation  capacity  of 
business, improve the provision public services and support wider access to education and culture.  

Pillar 4 (Fair Bulgaria) contains a comprehensive set of measures which jointly aim to achieve 
an  inclusive  and  more  sustainable  growth  through  building  effective  and  accountable  public 
institutions  sensitive  to  business  and  citizens’  needs  and  supporting  disadvantaged  groups  of 
society. 

80 

 
 
Complementarity of measures 

All pillars under the Plan foresee measures that mutually reinforce the effects on the green 
transition. These include reforms and investments aimed at enabling the accelerated deployment 
of renewable energy sources and hydrogen and the development of storage capacities; improving 
the  energy  efficiency  of  residential,  public  and  industrial  buildings;  sustainable  mobility; 
stimulating the transition to green and circular business practices. Digital solutions included across 
the Plan, in particular, those in the transport and energy sectors, are also expected to contribute to 
the decarbonisation of the economy, and to promote smart, sustainable and inclusive growth. In 
addition  to  efforts  to  decarbonise  the  economy,  efforts  in  the  areas  of  water  management  and 
biodiversity conservation and restoration will also be key in the context of the objectives of the 
European Green Deal. 

The digital dimension is identifiable in all pillars of the Plan with complementary reforms 
and investments on several fronts. The deployment of broadband infrastructure throughout the 
country will help bridge the digital divide and enable improved access to online services. Measures 
aimed at the transformation of public administrations and the increased provision of digital public 
services will improve the administrative processes and facilitate online interaction with citizens 
and businesses. Furthermore, digital solutions in the energy and transport sectors are expected to 
promote  smart  and  sustainable  growth.  The  investments  in  smart  industries  to  accelerate  the 
economic transformation is coherent with the objectives of supporting entrepreneurship, as well 
as  with  the  programme  for  accelerating  economic  recovery  and  green  transformation  through 
science  and  innovation  and  investments  to  stimulate  the  uptake  of  digital  technologies  in 
enterprises,  in  particular  in  SMEs.  These  are  complemented  with  measures  for  enhancing  the 
digital skills of students and adults, as well as of businesses and public administrations, in order to 
enable them to benefit from the digital transition. 

The  second  pillar  includes  several  energy-efficiency  measures  that  complement  the 
electrification process in the green transition. In particular, measures on energy efficiency of 
the  building  stock  and  of  municipal  outdoor  artificial  lighting  systems,  the  development  of 
information  systems  and  real-time  systems  of  the  Energy  System  Operator,  along  with  a 
programme for financing standalone renewable energy measures in single-family and multifamily 
buildings. Progress could have been made in combining measures to accelerate the decarbonisation 
path  and  support  the  green  transition,  such  as  green  taxation  or  stronger  transport  connectivity 
commitments.  However,  complementarities  to  energy  efficiency  measures  are  included  in 
investments in sustainable mobility – such as the purchase of new rail rolling stock - and in the 
infrastructure of renewable electricity storage, as well as in the deployment of renewable energy 
sources.  At  a  smaller  scale,  support  of  studies  and  pilot  projects  for  the  production  of  green 
hydrogen, biogas and geothermal combined heat and power is also envisaged.  

The different components do not have negative effects on each other and in many cases reinforce 
the measures related to the green transition and digital transformation. In order to promote wider 

81 

 
 
coherence  across  instruments,  notably  with  the  European  cohesion  policy  funds,  a  balanced 
territorial  allocation  of  resources  is  encouraged.  Taking  into  consideration  the  qualitative 
assessment of all components of Bulgaria’s Plan, their individual weight (importance, relevance, 
financial allocation) and their interactions, the plan contains measures for the implementation of 
reforms and public investments which, to a high/medium/low extent, represent coherent actions. 
This  would  warrant  a  rating  of  A  under  the  assessment  criterion  2.11  of  Annex  V  to  the  RRF 
Regulation. 

82 

 
 
 
 
ANNEX: Climate tracking and digital tagging 

Measure/ 
Sub-
Measure 
ID 

Measure/Sub-Measure Name 

1b 

2a 

2b 

2c 

3 

4 

7a 

8a 

8b 

8d 

STEM centres and innovation in 
education - digitalisation 

Modernisation of educational 
infrastructures - renovated 
schools/kindergartens 

Modernisation of educational 
infrastructures - new 
schools/kindergartens 

Modernisation of educational 
infrastructures - renovated student 
residences 

Provision of digital skills trainings 
and set-up of a platform for adult 
learning 

Youth centres 

Programme to accelerate economic 
recovery and transformation through 
research and innovation - digital 
objectives 

Enhancing the innovation capacity 
of the Bulgarian Academy of 
Sciences - digital 

Enhancing the innovation capacity 
of the Bulgarian Academy of 
Sciences - quantum platform 

Enhancing the innovation capacity 
of the Bulgarian Academy of 
Sciences 

- technology transfer 

Budget 
(EUR m) 

121.7 

179.85 

Climate 

Digital 

Int. 
Field 

Coeff. 
% 

Int. 
Field 

Coeff. 
% 

108 

100% 

026 

40% 

33.75 

025ter 

40% 

63.70 

026 

40% 

164.66 

32.25 

27.31 

2.58 

0.51 

012 

100% 

099 

40% 

021 

40% 

052 

100% 

021quat
er 

100% 

8.18 

022 

100% 

83 

 
 
 
  
  
 
  
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Measure/ 
Sub-
Measure 
ID 

Measure/Sub-Measure Name 

Budget 
(EUR m) 

Climate 

Digital 

Int. 
Field 

Coeff. 
% 

Int. 
Field 

Coeff. 
% 

8e 

11d 

11f 

11g 

11h 

11i 

Enhancing the innovation capacity 
of the Bulgarian Academy of 
Sciences 

- trainings 

Economic Transformation 
Programme — Fund 1 Growth and 
Innovation: Grant scheme for 
information and communication 
technology and cybersecurity in 
SMEs 

Economic Transformation 
Programme - Fund 2 Green 
Transition and Circular Economy: 
Grant scheme for investments in 
renewable electricity sources for 
own use with local storage facilities 

Economic Transformation 
Programme — Fund 2 Green 
Transition and Circular Economy: 
Grant scheme for the support of 
businesses in the transition to a 
circular economy 

Economic Transformation 
Programme — Fund 2 Green 
Transition and Circular Economy: 
Grant scheme for the support of 
businesses in the transition to a 
circular economy 

Economic Transformation 
Programme — Fund 2 Green 
Transition and Circular Economy: 
Guarantee financial instrument for 
energy efficiency and renewable 
energy 

1.67 

009bis 

100% 

15.65 

010 

100% 

102.26 

033 

100% 

73.62 

047 

40% 

18.41 

047bis 

40% 

37.5 

024 

40% 

84 

 
 
 
 
  
  
 
 
 
 
 
 
 
  
  
  
  
  
  
  
  
Measure/ 
Sub-
Measure 
ID 

Measure/Sub-Measure Name 

Budget 
(EUR m) 

Climate 

Digital 

Int. 
Field 

Coeff. 
% 

Int. 
Field 

Coeff. 
% 

11j 

11k 

13a 

13b 

13c 

14 

15 

16 

17 

18 

Economic Transformation 
Programme — Fund 2 Green 
Transition and Circular Economy: 
Guarantee financial instrument for 
energy efficiency and renewable 
energy 

Economic Transformation 
Programme — Fund 3 Investments 
in Climate Neutrality and Digital 
Transformation: Equity instruments 
for climate neutrality and digital 
transformation investments 

37.5 

025 

40% 

30 

024 

40% 

Support for the renovation of 
building stock - residential buildings 

608.18 

025bis 

100% 

Support for the renovation of 
building stock - public buildings 

Support for the renovation of 
building stock - manufacturing and 
commercial buildings - buildings in 
manufacturing, trade and services, 
as well as buildings from the 
tourism sector 

Support for renewable energy for 
households 

Support for energy-efficient street 
lighting systems 

Digital transformation of the 
electricity transmission grid 

Pilot projects for the production of 
green hydrogen and biogas 

Support for new capacities for 
electricity generation from 
renewable sources and electricity 
storage 

193.13 

026bis 

100% 

122.67 

024ter 

100% 

71.58 

029 

100% 

76.32 

026bis 

100% 

189.18 

033 

100% 

033 

40% 

35 

032 

100% 

342 

032 

100% 

85 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Measure/ 
Sub-
Measure 
ID 

Measure/Sub-Measure Name 

Budget 
(EUR m) 

Climate 

Digital 

Int. 
Field 

Coeff. 
% 

Int. 
Field 

Coeff. 
% 

19 

20 

31 

33a 

33b 

34a 

34d 

35 

37 

Pilot project on combined heat and 
power from geothermal sources 

National infrastructure for storage 
of electricity from renewables 
(RESTORE) 

Integrating the ecosystem approach 
and applying nature-based solutions 
into the protection of Natura 2000 
sites 

Restoring key climate ecosystems in 
line with the EU Biodiversity 
Strategy 2030 and the objectives of 
the European Green Deal — Natura 
2000 
Restoring climate key ecosystems in 
line with the EU Biodiversity 
Strategy 2030 and the objectives of 
the European Green Deal 
Fund to promote the technological 
and ecological transition of 
agriculture — ‘technological and 
environmental modernisation’ 
strand 

Fund to promote the technological 
and ecological transition of 
agriculture — 
‘construction/reconstruction and 
equipment of livestock holdings for 
the rearing and assessment of male 
breeding animals’ strand 

175.4 

032 

100% 

799.05 

033 

100% 

033 

40% 

15.58 

049 

40% 

5 

049 

40% 

26.9 

050 

40% 

162.62 

047 

40% 

51 

040 

40% 

Digitisation of processes from farm 
to fork 

10.2 

Large-scale deployment of digital 
infrastructure 

269.59 

011 

100% 

051 

100% 

86 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Measure/ 
Sub-
Measure 
ID 

Measure/Sub-Measure Name 

Budget 
(EUR m) 

Climate 

Digital 

Int. 
Field 

Coeff. 
% 

Int. 
Field 

Coeff. 
% 

38 

39a 

39c 

39d 

39e 

43a 

43b 

Construction, development and 
optimisation of the digital TETRA 
system and radio network 

Digital transformation of Bulgarian 
Post and delivery of complex 
services - digitalisation 

Digital transformation of Bulgarian 
Post and delivery of complex 
services - telemedicine 

Digital transformation of Bulgarian 
Post and delivery of complex 
services – charging stations 

Digital transformation of Bulgarian 
Post and delivery of complex 
services - renovation 

Digitalisation in railways transport 
and ERTMS — Kaspichan section - 
ERTMS 

Digitalisation in railways transport 
and ERTMS — Kaspichan section – 
other digitalisation 

44a 

Railways rolling stock — ERTMS 

Railways rolling stock – rolling 
stock 

European Train Control System on-
board equipment 

63.66 

34.76 

3.59 

011 

100% 

011 

100% 

013 

100% 

0.99 

077 

100 

7.76 

025 

40% 

44.79 

071 

40% 

071 

100% 

60.47 

45.12 

068 

100% 

070 

100% 

071 

40% 

071 

100% 

295.40 

072bis 

100% 

32.21 

071 

40% 

071 

100% 

Intermodal terminal in Ruse 

22.58 

078 

40% 

Road safety - traffic management 

Sofia metro line 3 – ERTMS 

Sofia metro line 3 

1.06 

15.30 

95.23 

073 

100% 

063 

100% 

071 

100% 

87 

44b 

45 

46 

47a 

48a 

48b 

 
 
  
  
  
  
 
 
 
 
 
 
  
  
  
  
  
  
 
 
  
  
Measure/ 
Sub-
Measure 
ID 

Measure/Sub-Measure Name 

Budget 
(EUR m) 

Climate 

Digital 

Int. 
Field 

Coeff. 
% 

Int. 
Field 

Coeff. 
% 

49a 

49b 

49c 

49d 

56 

59 

60 

61 

62a 

64 

65 

Green mobility — Pilot scheme to 
support sustainable urban mobility - 
rolling stock 

Green Mobility — Pilot scheme to 
support sustainable urban mobility - 
integrated route systems 

Green mobility — Pilot scheme to 
support sustainable urban mobility - 
recharging points 

Green Mobility — Pilot scheme to 
support sustainable urban mobility - 
Cycling infrastructure 

Digitalisation for integrated 
management, control and efficient 
use of water 

Strengthening, further developing 
and building on the Unified 
Information System of Courts 

Digitalisation of key litigation 
processes in administrative justice 

Transformation of the information 
and communication infrastructure at 
the Public Prosecutor’s Office 

Improving the quality and 
sustainability of the security 
services - digitalisation 

Supporting a pilot phase for the 
introduction of Building Information 
Modelling 

Unified Information System for 
Spatial Planning, Investment Design 
and Building Authorisation 

39.06 

074 

100% 

3.66 

076 

100% 

2.44 

077 

100% 

1.7 

075 

100% 

57.73 

040 

40% 

011 

100% 

011 

100% 

011 

100% 

011 

100% 

011 

100% 

011 

100% 

011 

100% 

9.88 

3.64 

14.71 

24.55 

3.98 

1.76 

88 

 
 
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
  
Measure/ 
Sub-
Measure 
ID 

Measure/Sub-Measure Name 

Budget 
(EUR m) 

Climate 

Digital 

Int. 
Field 

Coeff. 
% 

Int. 
Field 

Coeff. 
% 

66 

67 

68 

69a 

82b 

85b 

85c 

86a 

86b 

88 

95 

96 

97c 

Digitising data in the administration 
containing paper registries 

48.57 

011 

100% 

Spatial monitoring, control and 
management through upgrading 
the Aerospace Monitoring Centre 

56.56 

011 

100% 

Upgraded strategic planning system 

0.73 

011 

100% 

Ensuring an adequate information 
and administrative environment for 
the implementation of the recovery 
and resilience plan 

Modernisation of long-term care - 
energy efficiency 

Modernisation of the Social 
Assistance Agency - energy 
efficiency 

Modernisation of the Social 
Assistance Agency - digital 
component 

Modernisation of the Employment 
Agency – energy efficiency 

Modernisation of the Employment 
Agency - digital component 

Digitisation of collections of 
museums, libraries, and archives 

National digital platform for 
medical diagnostics 

Improving the national emergency 
communication system 

Development of outpatient care - 
Digitalisation 

3.51 

011 

100% 

96.1 

026bis 

100% 

1.55 

026 

40% 

1.45 

011 

100% 

0.1 

026 

40% 

011 

100% 

021bis 

100% 

095 

100% 

095 

100% 

095 

100% 

11.81 

30.44 

12.05 

23.85 

0.57 

89