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    Reference: 20200842
    Release date: 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.


    • Solid waste - Water supply; sewerage, waste management and remediation activities

    Proposed EIB finance (Approximate amount)

    EUR 14 million

    Total cost (Approximate amount)

    EUR 35 million

    Environmental aspects

    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


    Before financing approval by the Board of Directors, and before loan signature, projects are under appraisal and negotiation. The data provided on this page is therefore indicative and cannot be considered to represent official EIB policy (see also the Explanatory notes).

    Related tags

    Bulgaria Solid waste