A €1.5 million European Union-funded project has helped 14 municipalities in Bulgaria implement 45 clean energy projects, attracting more than €70 million in total investment. The FLAG-FICET initiative combines financing, technical assistance and capacity building to help local authorities turn clean energy plans into viable investments.
Coordinated by Fund FLAG, a financial institution established by the Bulgarian government, the project has provided more than €24 million in funding for clean energy projects. These investments have attracted over €70 million in total investment, including €53 million in sustainable energy.
The initiative was developed to address barriers that prevent municipalities from implementing clean energy projects, including limited access to suitable financing, insufficient technical capacity and a lack of bankable project proposals.
“Municipalities have a major role to play in Europe’s clean energy transition, but many struggle to turn ambition into investment,” said Iva Petkova from Fund FLAG, which coordinated the project.
She added that, “FLAG-FICET was created to address this gap and make clean energy investments possible at the local level.”
Financing Model Supports Municipal Energy Projects
FLAG-FICET combines investment loans, grants, municipal resources, technical assistance and capacity building within a single financing framework. Municipalities can combine the loans with other funding sources, including European Union grants and national sustainability trust funds.
Alongside financial support, the project provides assistance with business plans, financial modelling, energy efficiency assessments and emissions audits. This approach is designed to help local authorities develop projects that can attract investment and progress towards implementation.
The programme has supported a range of initiatives, with most projects focused on improving the energy efficiency of residential and non-residential buildings. These include energy efficiency improvements to hospital buildings in the municipality of Botevgrad.
Other investments include a 3 MW solar power plant in Kresna. In Vratsa, co-financing from FLAG-FICET is supporting the development of a fully electric public transport system covering urban and intercity services.
Solar and Geothermal Projects Expand Clean Energy Use
In Sapareva Banya, municipal financing is supporting the installation of a pipeline and pump reservoir to supply the town with geothermally heated mineral water. The area is home to the hottest geyser in continental Europe, where spring temperatures can reach approximately 103°C.
The geothermal project is expected to save 14,820 MWh of energy annually, equivalent to the average household energy consumption of around 4,100 European Union homes.
These projects demonstrate how clean energy investment can support different local priorities, including building efficiency, solar power generation, geothermal heat use and the electrification of public transport.
Programme Targets Energy Savings and Emissions Reductions
The investments supported by FLAG-FICET are expected to deliver substantial energy and environmental benefits. Petkova said, “The investments supported by FLAG-FICET are expected to save more than 54GWh of energy and avoid over 23 000 tonnes of CO₂ emissions annually. FLAG-FICET demonstrates that the clean energy transition can be accelerated when technical assistance and investment finance are designed as one integrated solution.”
The project is funded through the European Union’s LIFE Clean Energy Transition sub-programme, which aims to address market barriers, mobilise financing, develop local and regional investment projects and involve relevant stakeholders in the energy transition.
FLAG-FICET also contributes to the objectives of the EU Energy Efficiency Directive and Renewable Energy Directive. Through its combination of financial support and project development assistance, the initiative is helping Bulgarian municipalities move from clean energy planning towards implementation.