site.btaGovernment Aims to Disburse as Much Funding as Possible under Recovery Plan by August 31 - Deputy PM Pekanov

The Government’s goal is to disburse as much funding as possible under the National Recovery and Resilience Plan (NRRP) by August 31, Deputy Prime Minister Atanas Pekanov said Thursday before the parliamentary Committee on European Affairs and Oversight of European Funds.

In June, the European Commission gave a positive assessment of Bulgaria’s fourth request for payment under the NRRP. Bulgaria submitted the request for EUR 1.1 billion on April 2.

Pekanov called for all institutions to mobilize. “The deadlines are not arbitrary - they are final. There are 45 days left. August 31 is the deadline under the Plan for reporting all expenses,” he underscored. According to him, beneficiaries are attempting through various channels to save their projects by seeking deadline extensions. The Deputy Prime Minister urged them not to wait for him outside the Council of Ministers, not to call his relatives, and not to send him text messages. “There is no way we can extend the deadline because it is set by EU regulations,” Pekanov stated. He emphasized that after this deadline, expenses cannot be reported because the European Commission takes on debt to finance all expenses under the Recovery and Resilience Facility.

Failure to implement the projects leads to losses, but it is not yet possible to say how much they will amount to, because the Recovery and Resilience Facility operates with relatively little transparency regarding the assessment of what sanctions and fines the European Commission imposes on Member States, Pekanov explained.

He said there is no risk of payments to final beneficiaries not being made after August 31, if Bulgaria has received the funds from Brussels. “For me, the important thing is to get the green light from Brussels that we are receiving the funds,” Pekanov said. He emphasized that Bulgaria should be concerned not only with the projects but also with the reforms, which had faced some difficulties but on which a great deal of work had been done.

Pekanov put an emphasis on the reform in the water and sewerage sector.  "Negotiations are still ongoing; we faced difficulties, but we have succeeded in reducing the European Commission’s expectation for mandatory consolidation in the short term. This is something that is no longer expected of us," said the Deputy Prime Minister. The reform is currently underway, so in the coming years, those municipal companies that wish to consolidate will be provided with additional financial and economic support, as well as additional resources from EU funds, Pekanov explained. He thanked those who supported the amendments to the Water Act, which was passed at the end of May and unblocked part of the payment. According to him, the remainder of the payment will be made possible through renegotiation, which the Ministry of Regional Development and Public Works will carry out by drafting the consolidation methodology.

Another important issue where there were serious risks of losing funds concerns the Anti-Corruption Commission, but these risks will be overcome, said Pekanov. He added that at various times, other colleagues of his had tried a different approach, which was not accepted by the European Commission, leading to a freeze on funds. Thanks to the bill passed at the end of June, funds for the fourth installment were released, but it is also a key element for the fifth installment, he went on to say. He added that it has been agreed that commissioners will be selected by the end of August so that an Anti-Corruption Commission with its own budget and building can be established.

Pekanov also said that there was a risk of losing funds under the NRRP due to delayed decisions in the energy sector. Various governments have proposed different approaches, but no final decisions have been made, the Deputy Prime Minister added. He noted that the Energy Ministry is currently working on such decisions, which will be presented to Parliament. They will include an investment plan for coal-mining regions to ensure that resources from the Just Transition Fund are utilized. “With the adoption of an investment plan, we will be able to reassure people in the region that the restructuring of the Bulgarian Energy Holding will not lead to long-term direct job losses,” Pekanov said. He expects that some of the commitments will be waived and will not be required by August 31. However, failure to implement the reform in the sector could result in a loss of up to EUR 400 million, Pekanov warned.

In May, Pekanov told the Council of Ministers that over the past five years, Bulgaria had received 53% of the funds under the NRRP. Bulgaria expects to receive EUR 2.8 billion in the fourth and fifth installments, which amounts to half of the NRRP’s total budget, he specified.