11 January 2021
Promoter – Financial Intermediary
A major project allocation under the Bulgaria EU funds co-financing 2014-2020 loan consisting of the construction and commissioning of a new combined heat and power (CHP) plant for Sofia's district heating network operated by Toplofikacia utilising refuse-derived fuel (RDF). This would be the final phase of the integrated Sofia Municipal Waste project.
Additionality and Impact
The project represents the third phase of the waste
management programme of Sofia Municpality, the promoter. The financing of this
project contributes to the fulfilment of the national waste management
obligations under the Waste Framework Directive (2008/98/EC).Together
with the other components of Sofia's waste management programme, the Project
will enable recovery of both materials and energy from residual waste and lead
to reduced greenhouse gas emissions and climate change impact.The
EIB financing to the Project (together with a grant from ESIF) will contribute to reduce
negative externalities associated with waste management activities affecting environmental protection and public health. Also, the Project contributes towards increasing security of energy supply (a public good) by reducing the dependency on imported natural gas.In addition,the Project will
enable the district heating system of Sofia to meet the "efficient district
heating" criteria of the Energy Efficiency Directive (2012/27/EU). The project is located in a EIB Cohesion Priority region, positively contributing to regional development and social and economic cohesion.
The project has a good economic return and good social benefits, mainly hinging on the economic value of
substituting natural gas by refuse-derived fuel in heat and power generation. This will also have a positive social impact by improving the affordability of district heating prices.The project's financial
profitability is much lower, with the financial viability gap addressed by an EU grant.With the
appropriate conditions in place, the project is acceptable for financing in
environmental and social terms.
EIB's advice and financial contribution has a
positive impact on the technical quality and implementation of the project. The
promoter has benefited from JASPERS involvement during project preparation as
well as significant technical assistance in support of project implementation
and capacity building.The EIB's involvement in the financing of the project will
play a key role in facilitating the absorption of EU structural funds and lead
to the improvement of the promoter's financial profile by diversifying its
funding base, increasing its debt maturity structure and lowering its average
cost of funding.
The plant will combust refuse-derived fuel (RDF), feed its electricity into the public grid, and provide heat to the district heating system of Sofia. It will partly replace heat generation in existing natural gas fired installations.
The same underlying project has already been supported by the Bank with Sofia Municipality as borrower under the operation TOPLOFIKACIA CHP PROJECT (2009-0545). Project investment costs have been allocated between the two operations in proportion to the proposed EIB financing.
- Water supply; sewerage, waste management and remediation activities
Proposed EIB finance (Approximate amount)
EUR 14 million
Total cost (Approximate amount)
EUR 35 million
The project is permitted. It falls under Annex I of the Environmental Impact Assessment (EIA) Directive (2011/92/EC at the time of permitting) and consequently required a mandatory EIA. It falls also under the provisions of the Industrial Emission Directive 2010/75/EC requiring, among others, use of best available technique.
The Bank will require the Promoter to ensure that contracts for the implementation of the project shall be tendered in accordance with the relevant applicable EU procurement legislation (Directive 2014/25/EU and Directive 2007/66/EC), with publication of tender notices in the Official Journal of the EU, as and where appropriate.
Approved - 20/07/2021