site.btaParliament Passes First-Reading Amendments to Energy Efficiency Act Establishing National Decarbonization Fund

Parliament Friday voted, 114–19 with 49 abstentions, to approve first-reading amendments to the Energy Efficiency Act that provide for the establishment of a national decarbonization fund.

The bill was introduced by Pavela Mitova of There Is Such a People, Dragomir Stoynev of BSP – United Left, Delian Dobrev of GERB - UDF, and Stanislav Anastassov of the Movement for Rights and Freedoms (MRF) – New Beginning.

The amendments were backed by MPs of GERB - UDF, MRF – New Beginning, BSP – United Left, There Is Such a People, and four independent MPs. The votes against came from Continue the Change – Democratic Bulgaria (CC–DB), the Alliance for Rights and Freedoms (ARF), Morality, Unity, Honour (MECh), and Velichie. Those who abstained included MPs from CC–DB, Vazrazhdane, and two from the ARF.

The national decarbonization fund is envisioned as the main financial structure supporting Bulgaria’s building stock. It will adapt financial instruments or develop additional ones when needed, drawing on appropriate funding sources and schemes to overcome barriers to enhancing energy efficiency.

The fund will also serve as a single point of contact for technical assistance, following a one-stop-shop model or similar approach. Its activities will be aligned with the best practices of the Organisation for Economic Co-operation and Development (OECD).

According to the bill, the fund will be financed by international financial institutions and funds, Bulgarian and foreign natural and legal persons, in compliance with the anti–money laundering law, as well as by loans and other financial instruments.

The fund will inherit the activities, assets, liabilities, archives, and other rights and obligations of the existing Energy Efficiency and Renewable Sources Fund. Its management structure will include a donors’ general assembly, a management board, and a manager.

Management will follow a two-tiered system comprising the donors’ general assembly and the management board. The general assembly - reflecting the financial participation of donors - will have oversight powers. It is to be convened by the Energy Minister within 30 days after the law enters into force. At its first meeting, it will elect the members of the management board and adopt the fund’s operational rules.

The management board will comprise nine members representing both governmental and non-governmental organizations, including four ministry representatives. The chair will be a representative of the Energy Ministry. The Executive Director of the Sustainable Energy Development Agency and a representative of the National Association of Municipalities in the Republic of Bulgaria will also serve on the board. Members will have a five-year term.

The board is expected to appoint the fund’s first manager by April 30, 2026. The manager’s term will be five years. By way of exception, the first appointed manager will serve for three years.

Energy Minister Zhecho Stankov said the fund will open up new opportunities for Bulgarian citizens, as it will channel energy efficiency financing directly to households. "These are funds that will reach every household. We will create conditions for every house to have a solar panel that would reduce electricity bills tenfold. The fund will also solve another key issue - resources will be directed toward the energy efficiency renovation of single-family buildings. Part of its financing could come from savings already achieved under the municipal street lighting replacement programme," he said.

Stankov added that during the summer, the closure of a Hungarian biofuel refinery caused undue market turbulence, but joint efforts by the Bulgarian State and the European Commission ensured that the challenges are addressed and people did not notice fuel shortages. To prevent similar situations in the future, the State must have an instrument that would allow it, if necessary, to release fuels without the required biocomponent for a limited period of time, without affecting producers of biocomponents and biofuels, the Minister said.