General project information

The ambitious climate policy objectives set by the European Green Deal pose serious challenges to Bulgarian municipalities in regard of clean energy transition. Тhese challenges come along with certain needs and barriers such as:

  • considerable financial resource needed for the energy efficiency of buildings and RES measures;
  • market barriers for access to CET funding;
  • lack of dedicated technical assistance for preparation of CET projects.

Project FLAG - Financial instrument for clean energy transition (FLAG FICET) addresses these challenges by developing, demonstrating and promoting innovative financial instrument, structured within the framework of Fund FLAG, aiming to support municipal CET investments in collaboration and consultations with a wide number of stakeholders.

The project is approved for financing under LIFE call: LIFE-2021-CET-PDA: Disruptive PDA – Technical Assistance to advance market boundaries for sustainable energy investments. Project Development Assistance (PDA) offers technical assistance to project developers to undertake energy efficiency and renewable energy investments of ambition and scale.

Fund FLAG is а project coordinator, Club “Economika 2000” and Economic Research Institute at the Bulgarian Academy of Sciences are project partners and beneficieries. The duration of the project is 36 months, starting on October 1st , 2022 and ending on September 30th, 2025. The project budget is EUR 1,499,141.69, of which EUR 1,424,183.69 is a contribution from the European Commission.

As of 30 September 2025, the project successfully achieved its objectives by significantly accelerating the preparation and implementation of clean energy transition investments across Bulgaria. Through targeted technical assistance, active stakeholder engagement and systematic capacity building, the project substantially enhanced local authorities’ ability to develop and structure energy efficiency and renewable energy projects, as well as to mobilize public and private financing. Fund FLAG is committed to continue the implementation of the FLAG-FICET instrument throughout the five-year sustainability period till 2030, ensuring the long-term impact and replication of the project’s results.

Project objectives

The general project objectives are:

  • to support the municipalities in Bulgaria in their preparation to face the challenges in the field of climate change mitigation and adaptation in the next decade through CET
  • to mobilize financial resource for supporting CET investments of Bulgarian municipalities in the next decade
  • to build capacity in the Bulgarian Fund FLAG for development, assessment and financing of municipal CET projects
  • to raise the Bulgarian municipalities' awareness in the field of CET and the possibilities to finance green investments.

The specific project objectives are:

  1. To structure and launch an innovative financial instrument in FLAG to support CET investments in Bulgaria, which would upscale the experience and good practices in the country and the EU, and disrupt the barriers on the market for financing such projects.
  2. To improve the capacity of FLAG:
    • to structure financial instruments in entirely new areas, in which it has never operated
    • to administer financial instruments focused on green financing
    • in CET policy issues and to provide technical assistance for development of investment projects in this area
  3. To enhance the inter-institutional coordination in development of climate change mitigation and adaptation financial instruments
  4. To prepare municipal CET investment projects in Bulgaria

Project tasks, activities, deliverables

The project tasks are structured in 5 work packages:

WP 1: Project management and coordination

WP 2: Analysis of the supply and demand for CET project financing;

  • Analysis of the activity of FLAG with regard to the implementation of financial instruments; Study of the market for CET project funding in Bulgaria; Study of good European practices and experience in implementation of CET financial instruments (Summary report)
  • Study of the needs for and preparedness of the municipalities to implement CET projects (Summary report)
  • Elaboration of a methodology for evaluation of green projects (Summary report)
  • Improvement of municipal creditworthiness assessment methodology (Summary report)

WP 3: Structuring and launching the financial instrument;

  • Elaboration and consultation of a detailed design of the financial instrument
  • Preparation of the set of application documents, necessary for the launch of the financial instrument, and publishing of the First Call
  • Submission of the Application Forms and evaluation of pilot project proposals, organization of an official ceremony for signing of the first contract under the financial instrument

WP 4: Technical assistance for development of project proposals to be funded by the FI

  • Review of the existing and collection of additional information and documentation for the pilot projects
  • Development of technical and financial documentation for the pilot projects
  • Development of the full application packages for the pilot projects

WP 5: Sustainability, replication and exploitation of project results.

Project results

The results achieved through the implementation of the project include:

  • The establishment of the first specialised green financial instrument for municipalities and state- and municipally-owned companies in Bulgaria, combining technical assistance, blended financing and capacity building to support the implementation of clean energy transition projects.

  • The development of four financial schemes supporting the clean energy transition in the following areas:

    • Energy efficiency (EE) in public buildings (schools, healthcare facilities, administrative buildings, etc.), as well as in residential buildings owned by municipalities;

    • Development of photovoltaic (PV) systems and parks, including on reclaimed municipal landfills;

    • Utilisation of the potential of thermal mineral waters for the production of thermal energy and other applications related to the clean energy transition and improved energy efficiency;

    • Ecomobility, including the procurement of zero-emission public transport vehicles, the installation of charging infrastructure for public transport needs, and related measures.

  • The provision of technical support for the structuring of more than 65 clean energy transition projects developed by local authorities across the four thematic areas.

  • Financing provided to 14 municipalities for the implementation of a total of 45 clean energy transition projects in the four targeted sectors, all of which received technical support under the FLAG-FICET project. The total investment volume exceeds EUR 70 million, of which more than EUR 24 million was provided by Fund FLAG.

  • The establishment of a dedicated green investment unit within Fund FLAG, capable of providing technical assistance for the development and implementation of investment projects.

  • The establishment of a functional coordination and consultation model involving a wide range of stakeholders with regard to clean energy transition projects implemented by local authorities.

General disclaimer

Funded by the European Union. Views and opinions expressed are however those of the authors only and do not necessarily reflect those of the European Union or The European Climate, Infrastructure and Environment Executive Agency (CINEA), as the granting authority. Neither the European Union nor the granting authority can be held responsible for them.