FINANCING ENERGY EFFICIENCY PROJECTS FOR SMEs Ministry of Economy and Energy

1. European Regional Development Fund EUROPEAN UNION Investing in your future Operational programme "Development of the Competitiveness of the Bulgarian Economy" 2007-2013 FINANCING ENERGY EFFICIENCY PROJECTS FOR SMEs Ministry of Economy and Energy Managing Authority of OP "Competitiveness"

2. European Regional Development Fund EUROPEAN UNION Investing in your future Operational programme "Development of the Competitiveness of the Bulgarian Economy" 2007-2013 Bulgarian Energy Strategy 2020 Bulgaria2020 targets • 25 % improvement in energy efficiency compared to 2005 levels • 50%decrease in energy intensity • 16 % share of energy consumption produced from renewable sources • 20 % reduction in greenhouse gas emissions from 1990 levels High potential for energy efficiency improvement identified in: • energy production / transmission / distribution • final energy consumption:residential sector, transport, industry and services

3. European Regional Development Fund EUROPEAN UNION Investing in your future Operational programme "Development of the Competitiveness of the Bulgarian Economy" 2007-2013 Energy Intensity in selected EU Countries [kgOe/1,000 €] Bulgaria has highest rate within EU-27 • Disadvantage for Bulgarian SMEs • Lack of competitiveness • High expenses for energy services

4. European Regional Development Fund EUROPEAN UNION Investing in your future Operational programme "Development of the Competitiveness of the Bulgarian Economy" 2007-2013 Operational programme "Development of the Competitiveness of the Bulgarian Economy" 2007 – 2013 Energy Efficiency and Green Economy Programme

5. European Regional Development Fund EUROPEAN UNION Investing in your future Operational programme "Development of the Competitiveness of the Bulgarian Economy" 2007-2013 Framework • Joint Initiative between MoEE and EBRD • Promotion of Sustainable Energy Solutions for SMEs • Blending of EU Structural Funds and Commercial Lending in one Procedure

6. European Regional Development Fund EUROPEAN UNION Investing in your future Operational programme "Development of the Competitiveness of the Bulgarian Economy" 2007-2013 Components • Grant Component: EUR 150 Mio. • Loan Component: EUR 150 Mio. • Technical Assistance Component

7. European Regional Development Fund EUROPEAN UNION Investing in your future Operational programme "Development of the Competitiveness of the Bulgarian Economy" 2007-2013 Eligible Applicants and Projects • Only SMEs are eligible Maximum of 250 employees, turnover of max. EUR 50 Mio. and/or total assets of max. EUR 45 Mio. (according to EU definition / Bulgarian Law on SMEs) • Energy Efficiency Projects Projects which result in a reduction of energy (and/or fuel consumption) against a baseline or per unit of production Energy-Audit Projects must achieve a minimum of 10% energy savings! • Renewable Energy Projects Projects which generate energy only for the own use of enterprises (solar thermal, geothermal and heat pumps)

8. European Regional Development Fund EUROPEAN UNION Investing in your future Operational programme "Development of the Competitiveness of the Bulgarian Economy" 2007-2013 Implementation Approaches There are two different approaches: Technology-driven Approach: Small-scale projects specified in the „List of Eligible Material and Equipment“ Energy-Audit Approach: For larger and more complex projects, based on the results of a simplified Energy Audit Technology-driven Approach Energy Audit Approach

9. European Regional Development Fund EUROPEAN UNION Investing in your future Operational programme "Development of the Competitiveness of the Bulgarian Economy" 2007-2013 Grant Funding • Maximum grant intensity is 50% of eligible costs • Maximum grant amount per project under „Regional Aid“ scheme is EUR 1 Mio.

10. European Regional Development Fund EUROPEAN UNION Investing in your future Operational programme "Development of the Competitiveness of the Bulgarian Economy" 2007-2013 Functions Allocation Project Assistant Participating banks Contracting Authority Verification Assistant Financial Eligibility Check • Financing with own funds: Confirmation of availability of sufficient funds • Loan financing: Loan approval or Term Sheet PBs provide loans to applicants/beneficiaries at market rates • Technical Eligibility Check • Project eligibility • Eligibility of expenditures • Energy audit check • Procurement Check • Information and counseling services to applicants Eligibility of Applicant Check State Aid Compliance Double Financing Check • Project Monitoring • Verification of products and services delivered • On-the-spot visit • Final report Check • LEME maintenance

11. European Regional Development Fund EUROPEAN UNION Investing in your future Operational programme "Development of the Competitiveness of the Bulgarian Economy" 2007-2013 Project Cycle

12. European Regional Development Fund EUROPEAN UNION Investing in your future Operational programme "Development of the Competitiveness of the Bulgarian Economy" 2007-2013 State of implementation • Initial project preparation completed: 750+ projects, well above programme budget • Submission mostly in the last two months before programme closure • Preference for Energy Audit Projects – scale and flexibility

13. European Regional Development Fund EUROPEAN UNION Investing in your future Operational programme "Development of the Competitiveness of the Bulgarian Economy" 2007-2013 Operational Progamme „Innovations and Competitiveness“ 2014-2020

14. European Regional Development Fund EUROPEAN UNION Investing in your future Operational programme "Development of the Competitiveness of the Bulgarian Economy" 2007-2013 Programmingframework Priorities for funding recommended by European Commission Services 2. Innovation-friendly business environment • Supporting business development • Facilitating access to finance and advanced business services for SMEs and start-ups • Supporting private R&I investment, infrastructure and capacities 4. Environment-friendly and resource-efficient economy • Promoting a low-carbon economy, energy efficiency and renewable energy sources • Common Strategic Frameworkfor the period 2014-2020 • Thematic objective 1.Strengthening research, technological development and innovation • Thematic objective 3. Enhancing the competitiveness of SMEs • Thematic objective 4. Supporting the shift towards a low-carbon economy • Thematic objective 6. Protecting the environment and promoting resource efficiency OP „Innovations and Competitiveness “ PRIORITY AXIS 1: „Entrepreneurship, export and production potential“ 1.1. Technological development and innovations 1.2. Competitiveness and productivity of enterprises PRIORITY AXIS 2: „Green and effective economy“ 2.1. Green economy and resource efficiency 2.2. Energy technologies and energy efficiency PRIORITY AXIS 3: „Technical assistance“

15. European Regional Development Fund EUROPEAN UNION Investing in your future Operational programme "Development of the Competitiveness of the Bulgarian Economy" 2007-2013 Priority axis 1: Entrepreneurship, export and production potential • Technological development and innovations - „smart“ growth(TO 1 of the CSF) • development and embedding of new products, processes and business models in innovative enterprises • development of mutual initiatives for researches and innovations • support for innovative starting enterprises • development of infrastructure for innovations and researches, etc. • Competitiveness and productivity of enterprises - fast growing (TO 3 of CSF) • renovation and excellence of technologies aiming to improve productivity and increasing efficiency of resources used through introduction of leading technological solutions • introduction of new ICT-based services and applications • improvement of manufacturing processes in enterprises • support for development of clusters • support for fast growing enterprises, etc.

16. European Regional Development Fund EUROPEAN UNION Investing in your future Operational programme "Development of the Competitiveness of the Bulgarian Economy" 2007-2013 Priority axis 2: Green and effective economy • Green economy and resource efficiency – sustainable growth (TO 6 of the CSF) • embedding of high-technology solutions for optimization of production processes and reduction of utilization of raw materials • embedding of contemporary technologies for input of wastes as raw material in new production; wasteless technologies; innovation production materials; technologies for production of "green products“, etc. • Energy technologies and energy efficiency - sustainable growth (TO 4 of the CSF) • investments in technology solutions for optimization of production processes resulting in energy savings • investments in renewable energy technologies for energy production, incl. CHP • consultancy services for energy management systems development • construction and repair works in buildings

17. European Regional Development Fund EUROPEAN UNION Investing in your future Operational programme "Development of the Competitiveness of the Bulgarian Economy" 2007-2013 THANKYOU FOR YOUR ATTENTION!