State aid: Commission approves close to €94 million support for waste-to-energy high-efficient cogeneration plant in Bulgaria

The European Commission has approved, under EU State aid rules, Bulgarian plans to support the construction and operation of a high-efficient cogeneration plant to produce heat and electricity using fuel derived from unrecyclable municipal waste to be in line with EU State aid rules. On 8 October 2019, Bulgaria notified the Commission of its plans to support the construction and operation of a high-efficient cogeneration plant in Sofia, Bulgaria. The support will consist of two distinct measure: (i) a direct grant of approximately €90.8 million (around 177.6 million BGN) financed by EU Structural Funds managed by Bulgaria; and (ii) a loan granted by the Sofia municipality to Toplofikacia EAD at a preferential rate, amounting to approximately € 3 million (around 5.8 million BGN). The Commission assessed these support measures under EU State aid rules, in particular its 2014 Guidelines on State Aid for Environmental Protection and Energy. The Guidelines notably provide that, in order to ensure that aid contributes to a higher level of environmental protection, support for cogeneration of heat and electricity must meet the “high-efficient cogeneration” criteria set out in the 2012 Energy Efficiency Directive. In this respect, the Commission found that the combined production of heat and electricity by the new plant will enable a primary energy saving of 46.5% compared to a scenario in which heat and electricity would be produced separately, thus meeting the criteria set out in the Energy Efficiency Directive. Furthermore, the Commission found that the measures are necessary and proportionate. On this basis, the Commission concluded that the measures will contribute to key strategic objectives of the EU, in particular the improvement of energy efficiency through combined electricity and heat production, without unduly distorting competition, in line with EU State aid rules. Commissioner Margrethe Vestager, in charge of competition policy, said: “The support measure will help Bulgaria achieving its energy-efficiency targets and will contribute to the reduction of CO2 emissions in line with the EU environmental objectives, without unduly distorting competition.” The full press release is available online in EN, FR, DE, BG.