Bulgaria to lose €665mn under recovery plan after delaying liberalisation of power market

Bulgaria to lose €665mn under recovery plan after delaying liberalisation of power market
By Denitsa Koseva in Sofia April 26, 2024

Bulgaria will most likely lose BGN1.3bn (€665mn) under its Recovery and Resilience Plan, after the parliament decided on April 25 to delay the liberalisation of electricity trade market by one more year  – a key reform required for the disbursement of the second tranche by the European Commission.

Experts suggest the country could lose all of the remaining €4.4bn allocated under the recovery plan over delayed or failed reforms.

On April 25, MPs from Gerb, the Movement for Rights and Freedom (DPS), far-right pro-Russian Vazrazhdane, the Bulgarian Socialist Party (BSP) and populist There Are Such People (ITN) voted for the delay, while  only pro-Western reformist Change Continues-Democratic Bulgaria (CC-DB) opposed it.

Under the current energy law, the liberalisation was supposed to start on July 1, 2024 and the process was to be completed at the beginning of 2026. This was adopted in September last year with the support of Gerb, the DPS and CC-DB, but ahead of the June 9 snap vote Gerb and the DPS decided to delay the reform.

During the debates, CC-DB warned that Bulgaria will lose the BGN1.3bn payment as it has specific deadlines for the full liberalisation of the energy market that is part of its recovery and resilience plan.

However, the other parties claim that the European Commission did not specify the exact date for the start of the liberalisation and that the country will lose that money anyway due to lack of reforms. They also claim that if the liberalisation is not delayed, this would lead to serious social problems due to “a sharp jump of prices” that would make it hard for households to adjust to the new conditions.