| |
enbg
About SCF
Goals and mission Who we are? Our Team
Financial instruments
Urban Development Funds 2014-2020 Reinvestment 2024-2031 Circular Economy 2021-2027 Urban Development Funds 2021-2027
Projects
Urban development Tourism and cultural heritage
Contacts
| |
enbg
Circular Economy 2021-2027Circular Economy 2021-2027
Circular Economy 2021-2027
Requirements Financing Applying

The support is targeted at investments that contribute to:

  • improving energy efficiency and reducing greenhouse gas emissions;
  • more efficient use of resources and the introduction of circular economy solutions.

ELIGIBLE FINAL RECIPIENTS FOR LOAN FINANCING

Energy Efficiency Portfolio

SMEs, small mid-cap companies, mid-cap companies, and large enterprises.

Resource Efficiency Portfolio

SMEs, small mid-cap companies, and mid-cap companies.

ELIGIBLE ACTIVITIES

Energy Efficiency Portfolio

Investments by Eligible Final Recipients based on recommendations from an energy efficiency audit of:

  • industrial systems[1] and/or parts of such systems (including machinery, equipment, and/or industrial/manufacturing/commercial buildings),
  • enterprises,
  • administrative, commercial, and other non-production buildings,

including activities related to:

  • introduction and certification of energy management systems in enterprises;
  • introduction of systems for monitoring and controlling energy consumption in enterprises;
  • implementation of improvements regarding technologies and production processes used in enterprises;
  • implementation of measures for the use of electricity, heating, and cooling energy from renewable energy sources (RES) for self-consumption, including storage systems.

For investments in industrial buildings and/or equipment/machinery, measures recommended either in an audit report for an entire industrial system or in an energy efficiency audit report for part of an industrial system (simplified audit according to a template provided by FMFIB) may be implemented. Administrative/commercial buildings and other non-production buildings used by Eligible Final Recipients are not considered part of an industrial system and are subject to separate building energy audits and certification.

Where a project includes only measures for the use of electricity, heating, and cooling energy from renewable sources for self-consumption, including storage systems, an energy audit is not required. Preparation of a conceptual or technical design by a licensed designer is recommended in order to assess the required capacities, installation area, and structural reinforcements, and these costs are eligible for coverage through Technical Assistance.

Eligible investments must result in a reduction of expected greenhouse gas emissions as a consequence of achieved energy savings (for RES-only measures, only reduced emissions are considered). It is acceptable for the achieved values after implementation to be lower than initially projected in the energy audit, but negative savings and/or increased emissions are not permitted.

Resource Efficiency Portfolio

Investments for introducing circular models for production and resource consumption in Eligible Final Recipients, concerning product design, production processes and waste management, as well as the development and implementation of innovative products, processes and business models aimed at permanently reducing resource intensity in industry, specifically activities leading to:

  • more efficient use of natural resources in production, including water, including reduced use of primary raw materials or increased use of by-products and secondary raw materials;
  • increasing product durability, repairability, upgradeability, or reusability;
  • improving product recyclability, including recycling of individual materials contained in products, including through replacement or reduced use of non-recyclable products and materials;
  • reducing the content of hazardous substances in materials and products throughout their lifecycle, including replacing them with safer alternatives;
  • extending product use, including through reuse, durability-oriented design, repurposing, dismantling, remanufacturing, upgrading, repair, and product sharing;
  • support for improved waste management in enterprises, including prevention and reduction of waste generation, preparation for reuse, and recycling. Support will also be provided for upgrading technologies for treatment and reduction of pollution from industrial wastewater;
  • support related to the use of renewable energy for self-consumption. In such cases, preparation of a conceptual or technical design by a licensed designer is recommended to assess required capacities, installation area, and structural reinforcements, with costs eligible under Technical Assistance;
  • support for technological development, innovation, and resource efficiency for enterprises engaged in pre-treatment of waste as part of the recycling sector.

THE FINANCIAL INSTRUMENT CANNOT PROVIDE SUPPORT FOR:

  • Transactions intended for refinancing or restructuring existing loans;
  • Financing investment elements that are physically completed or fully implemented before the investment decision date;
  • Purchase of land exceeding 10% of the total eligible costs of the project. For abandoned land and land previously used for industrial purposes including buildings, the limit increases to 15%;
  • Measures for improving the energy efficiency of administrative/commercial and other non-production buildings not used by Eligible Final Recipients, as well as student dormitories and residential buildings;
  • Enterprises for waste incineration and/or other waste-to-energy recovery activities, as well as installations for pre-treatment of mixed municipal waste;
  • Purchase of second-hand tangible fixed assets related to RES. Purchase of other second-hand fixed assets, equipment, or machinery is permitted provided that:
    • the seller provides a declaration of origin and confirmation that the equipment has not been purchased with national or EU grants within the previous five years;
    • the equipment price does not exceed its market value or the cost of similar new equipment, confirmed by an independent evaluator;
    • the equipment possesses the technical characteristics necessary for project implementation financed by the Financial Instrument.

A comprehensive list of ineligible activities will be included in the Call for Proposals.

COMBINATION OF LOAN FINANCING AND GRANT SUPPORT IN A SINGLE OPERATION

Within the financial instrument, a new opportunity is envisaged for combining an investment loan with grant support in a single operation. The combined support is implemented through a loan provided by the financial intermediary, to which grant support may be added under certain conditions. The grant support must be directly linked and necessary for the investment financed by the Financial Instrument. Both forms of support are provided under a single financing agreement in compliance with applicable European and national regulations. This approach represents an innovative financing model in which public resources complement rather than replace market-based lending.

Grant support is provided by the Urban Development Fund in combination with an investment loan (where applicable), as follows:

Technical Assistance Grant Support

Grant support may be provided to the final recipient for:

Project Preparation

For the Energy Efficiency Portfolio:

  • costs for energy efficiency audits before project implementation (including simplified audits for part of an industrial system) with prescribed energy-saving measures;
  • preparation of conceptual or technical designs applicable only for eligible RES activities.

The energy audit under Component 1 concludes with a report and summary, and where applicable, with an energy performance certificate for the building (for administrative, commercial, and other buildings not part of industrial systems).

For the Resource Efficiency Portfolio:

  • costs related to preparation of conceptual or technical designs applicable only for eligible RES activities.

Verification of Project Results

For the Energy Efficiency Portfolio:

  • energy efficiency audits to verify implementation of prescribed measures (performed no earlier than one year after implementation), or assessments proving achieved energy savings resulting from implementation of the prescribed measures (within one year after implementation), supported by the financing.

The energy audit concludes with a report and summary, and in cases of energy savings assessment, with a protocol containing mandatory content in accordance with the instrument requirements.

Important: The audit/assessment must be carried out by a person under Art. 59 registered under Art. 60 of the Energy Efficiency Act (for enterprises and industrial systems), or respectively by a person under Art. 43 registered under Art. 44 of the Energy Efficiency Act (for commercial/administrative and other non-production buildings).

Capital Rebate

Grant support amounting to 15% of the total Eligible Financing may be paid to the final recipient after successful completion of activities and achievement of predefined results. It is applied after the investment is implemented and upon achievement of pre-established results in accordance with the terms of the financial instrument. The capital rebate is granted upon fulfilment of the specified indicators and reflected according to the agreed contractual conditions.

INELIGIBLE FINAL RECIPIENTS FOR GRANT SUPPORT

Energy Efficiency Portfolio

Large enterprises, as well as small mid-caps and mid-caps, cannot receive grant support for Technical Assistance.

Resource Efficiency Portfolio

Small mid-cap companies and mid-cap companies cannot receive grant support (technical assistance or capital rebate).

ADDITIONAL RESTRICTIONS FOR GRANT SUPPORT

Grant support will not be provided for:

  • Final recipients subject to mandatory energy efficiency audits under Art. 57(2) of the Energy Efficiency Act[2];
  • Energy efficiency audits already supported (fully or partially) through grants under another energy efficiency promotion measure;
  • Energy efficiency audit costs paid by the final recipient before applying for financing from the Urban Development Fund;
  • Enterprises benefiting under procedure BG-RRP-3.008 “Support for the transition to a circular economy in enterprises” under Investment C12 “Economic Transformation Programme” of Bulgaria’s Recovery and Resilience Plan;
  • Waste pre-treatment enterprises receiving product fees under the Waste Management Act.

Waste pre-treatment enterprises are eligible for grant support provided they do not receive product fees under the Waste Management Act.

REQUIREMENTS FOR THE PROJECT PROPOSAL

A. Compliance with the Objectives of the Financial Instrument

The project proposal must comply with the objectives of the financial instrument and the investment focus of the respective portfolio. This means the project should contribute to improving energy efficiency and/or transitioning to a circular and resource-efficient economy, depending on the nature of the investment.

B. Investment Nature of the Project

The proposal must constitute an investment aimed at implementing eligible activities and achieving measurable results.

C. Technical and Economic Feasibility

The project must be technically feasible and economically justified, with planned activities, costs, and timelines being realistic and aligned with the capacity of the final recipient.

D. Compliance with Applicable Legislation

The proposal must comply with applicable national and European legislation, including state aid rules.

E. Financial Sustainability

The project must contribute to the sustainable development of the enterprise and allow servicing of the financing provided under the contractual conditions.

[1] According to the definition in the Energy Efficiency Act: a distinct set of production buildings, facilities, technological equipment, and auxiliary units within which an enterprise carries out activities for the production of goods or provision of services.

[2] According to Art. 57(2), mandatory audits apply to:

  • industrial systems and buildings not part of industrial systems belonging to enterprises producing goods and/or providing services that are not SMEs under Art. 3 of the SMEs Act;
  • industrial systems with annual energy consumption exceeding 3,000 MWh.