site.btaGovernment Proposes State Guarantees for Chaira Hydropower Project

Provision for issuing state guarantees for new loan agreements of the National Electricity Company (NEK) to finance a strategic energy infrastructure project will be included in the draft 2027 State Budget, the Council of Ministers decided on Wednesday.

The guarantees will amount to up to EUR 228 million or the equivalent in another currency, subject to compliance with state aid legislation.

The project involves increasing the capacity of the lower balancing reservoir of the Chaira pumped-storage hydropower plant (PSHPP) by constructing the Yadenitsa Reservoir and a reversible pressure tunnel connecting it to the Chaira Reservoir.

The project is at an advanced stage of preparation and has been designated an EU Project of Common Interest No. 2.21, as confirmed by Delegated Regulation (EU) 2026/764. This status recognizes its contribution to the integration of regional energy markets and security of supply in Southeastern Europe.

The Government has instructed the Energy Minister to conduct an analysis and provide information before proposing the issuance of a state guarantee for the Chaira PSHPP project, confirming that NEK is not an undertaking in difficulty and is capable of servicing the state-guaranteed loan.

The decision also explicitly states that no new investment projects to be financed through state loans contracted in 2027 will be approved.