Written by Yasen Georgiev (EPI, EECFA Bulgaria)
Less than 25% of the funding for its Resilience and Recovery Plan has landed in Bulgaria so far. Last month, the new Bulgarian government, which took office this January, submitted a request to revise its Plan. Will all milestones and targets be achieved and will the country get all payments by the deadline of August 2026?
No reforms, no money
Do you remember the Resilience and Recovery Facility (RRF) the European Commission came up with to assist member states after the pandemic? Unlike traditional EU funds, this instrument in the form of national Resilience and Recovery Plans (RRPs) is meant to provide grants in exchange for specific reforms, making it a performance-based tool going hand in hand with time-bound milestones and targets (i.e. reforms). The completion of the latter is strictly tied to the disbursement of funds for public investments which literally means “no reforms, no money”.
For various reasons, in many EU member countries the implementation of the RRF is not going according to initial plans, and governments are currently submitting requests for revisions. They are to be reviewed and eventually approved by the European Commission. This is the case also with Bulgaria and its RRP that is financed with EUR 5.69bln in grants. As of mid-May 2025, though, the country has received less than 25% of the overall amount in the form of a first installment totaling EUR 1.36bln.
What is now at stake is the remaining EUR 4.32bln
The question is when this sum will be disbursed and whether the disbursement will be in full. The overall completion rate of the milestones and targets Bulgaria committed to in its RRP is at 38%, which stands for 122 finished reforms out of 321 in total.
To make things worse, the respective regulation at EU level says that all milestones and targets are to be achieved by 31 August 2026, and any payment under the RRF is be executed by 31 December 2026.
The new government is trying to speed up implementation and get full access to eligible funding
To address the accumulated delays (resulting also from a series of seven parliamentary elections in three years) and several underperforming parliaments that failed to adopt the respective legislative reforms, in April 2025 the new government submitted a request to the Commission to revise its RRP.
Bulgaria proposes to remove or modify several measures across the plan while cancelling or downsizing projects currently delayed. Since some of the proposed modifications concern outstanding issues under the second payment request, along with the modification request, Bulgaria also withdrew the payment request, with a view to resubmit it following the approval of the amended plan.
The biggest construction-related projects that are to drop out of the new RRP include a programme for the construction and reconstruction of water supply and sewerage systems (EUR 152mln), a project for heat and electricity co-generation from geothermal sources (EUR 123mln) and a pilot project for green hydrogen (EUR 33mln).
Other investments to see reduced funds are the construction of industrial parks and youth centres with an overall cut of EUR 15mln. While funding for all of these projects is to be potentially channeled from other EU programmes, there are projects that will receive more from the RRP than initially foreseen like the construction of the third metro line in Sofia with EUR 33mln in additional funding.
If proposed reforms and modified projects are approved in Brussels, the government expects to get the second and third RRF payment in the course of the year, while all remaining installments are to be disbursed by the deadline in 2026.
Needless to say, this seems like a very ambitious plan given the insufficient performance of the RRP in Bulgaria so far. This could also be seen in the official position of the government – the country may receive all payments by the deadline of August 2026 but will not have time to make all investments. This would mean that the projects underway at that time are either going to be downsized or put on hold until money from other sources is secured.
Segment-level construction forecast on Bulgaria can be found in the EECFA Construction Forecast Report. The new forecast will be out on 23 June. Orders and sample report: eecfa.com