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Electricity production licencing process in Bulgaria

This article is part of the first edition of our monthly newsletter “Sun is the limit” dedicated to the latest events, deals and news in the field of renewable energy sources in Bulgaria and Europe, you can subscribe to our monthly newsletter using the button at the bottom on the page.

xFigureFinance team’s experience in solar projects financing since 2010 gives us the confidence to share information and valuable lessons learned throughout the process of structuring, building, financing and selling renewable energy projects.

The use of renewable energy sources is growing rapidly across Europe, and Bulgaria is no exception. In recent years, the country has seen a significant increase of investment in renewable energy projects, particularly in the field of solar and wind power (see more about the advantages of Bulgaria for investing in PV Plants here).

In order to regulate the growth in the sector, the Bulgarian government introduced a system for licensing the production of electricity as early as 2011. According to the requirements of the Energy Act and the Ordinance on licensing of activities in the energy sector, electricity producers from plants with a total capacity of more than 20 MWp (last amendment to the Energy Act dated 02.2023) are subject to licensing by the State Energy and Water Commission (SEWC). The licensing process aims to ensure that renewable energy projects are developed and operated in a safe, responsible and sustainable manner. Based on the license issued, the producer is given the right to sell the power produced by the power plant, and SEWC in turn exercises control over carrying out disposal transactions, pledges, mortgages, as well as in the event of a change in the circumstances of the company that owns the power plant.

In addition to the licensing requirements, renewable energy projects in Bulgaria must also comply with a range of technical and environmental standards. For example, projects must be designed to meet minimum performance standards and must not cause harm to the environment or local communities.

Term of the license

SEWC determines the term of the license based on the operational term of the assets and the financial status of the applicant. This term varies from 1 to 35 years.

Application to SEWC

The submitted license application must contain: information about the company, type of license requested, description and technical parameters of the future energy facility, detailed schedule of construction activities on the facility, data on other licenses requested or held by the manufacturer for other types of activities under The Energy Act.

Documents to the application

  1. Certificate of Current Status
  2. Declarations from the managers and members of the applicant’s management bodies
  3. Business plan with planned investments, investments made, estimated capital structure, income and expenses; production and repair programs and related costs, return on capital, annual cash flows, sales, prices
  4. Investment analysis and financial model with estimated energy prices
  5. Annual financial statements of the applicant for the last 3 years
  6. Details on sources of funding
  7. Details on the percentage participation of partners/shareholders or members in the capital
  8. Details of the applicant’s experience
  9. Details on the organizational structure of the company
  10. Conceptual design and/or technical design and/or working design prepared or approved according to ZUT
  11. Construction schedule
  12. Preliminary contract with the transmission/distribution company for connection to the network
  13. Administrative acts on the impact of the project on the environment

After construction and commissioning of the power plant, the licensee is obliged to submit the following documents:

  1. Document for putting the construction into operation (Protocol16);
  2. Data on the technical and operational characteristics of the site and its adjacent infrastructure;
  3. Documents proving ownership or other real right;
  4. Evidence of assigned service personnel and their qualifications;
  5. Updated business plan and financial model.

In the various European countries, including Germany, France, Italy and the UK, most of the licensing of solar and wind electricity generation is managed at national or local level, rather than uniformly for the European Union. This means that there may be differences in licensing requirements depending on the country, but the general trend is towards more streamlined and simplified processes. To support this goal, the EU has introduced a number of measures, including the Renewable Energy Directive, which sets common rules for the promotion and use of renewable energy across the EU.

The role of xFigureFinance in projects that require obtaining an electricity production license is to prepare a business plan, investment analysis and financial model for SEWC, which is based on the developed financial model for investors and financing institutions.

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