Ombudsman warns about a torrent of complaints against free of charge rehabilitation and the new requirement of 20% beneficiary’s self-financing
Date of article: 07/02/2024
Daily News of: 13/02/2024
Country: 
Bulgaria
Author: National Ombudsman of Bulgaria
Article language: en
7 February 2024
Ombudsman Diana Kovacheva again sent a letter to the Minister of Regional Development and Public Works Andrey Tsekov, the Minister of Energy Rumen Radev, the Minister of Finance Assen Vassilev and the Executive Director of the Sustainable Energy Development Agency Ivailo Aleksiev where she warns about a torrent of complaints and objections from associations of owners and municipalities provoked by the rejections of projects for free of charge rehabilitation of residential buildings.
People disagree with the results of the ranking of investment proposals under the procedure BG-RRP-4.023 “Support for sustainable energy renovation of the residential building stock – Stage I” for free of charge rehabilitation.
“Popular discontent is massive and touches on a wide range of problems – from the very design of the procedure and the way it was communicated to the implementation of each of the stages and the announcement of the rankings,” the Ombudsman wrote.
Prof. Diana Kovacheva insisted that she be provided with information about the findings of the checks so far, including checks of the energy efficiency certificates, about violations as reported by complaints and objections of the associations of owners and about the measures taken to enable the citizens’ fair participation in the procedure under Stage I.
The Ombudsman emphasized that absence of clarity on the questions that she had raised in her previous letter dated 11 January 2024 where she recommended that a public awareness campaign be launched to make clear, inter alia, the possibilities for citizens to get financing to make their buildings energy-efficient and for support for the inclusion of energy poor citizens into the process.
“It is necessary to make an analysis of the alternatives, including the possibilities for the redirection of finance flows from eligible sources in compliance with the criteria to ensure priority energy renovation of the residential buildings subject to the tool in the Decision to make it binding on the Council of Ministers to change the energy component of the national Recovery and Resilience Plan (RRP). In particular, Item 4 of the Decision assigns to the Council of Minister through the agency of the Deputy Prime Minister for EU Funds Management, through the Central Coordination Unit and in keeping with Art. 21 of Regulation 2021/241 to reallocate all current savings from the implementation of RRP projects, including savings upon their completion and/or termination to “Green Bulgaria”, component 4. Low Carbon Economy, Project “Support for sustainable energy renovation of the residential building stock,” the Ombudsman wrote.
The Ombudsman insisted that information be provided about the real possibilities for the acquisition of other financial facilities for participation, subject to equal and non-discriminatory conditions, for the associations of owners who are on the reserve lists for Stage II, but who cannot afford the required 20% beneficiary’s self-financing and have already invested money for energy audits and technical passports.
“It was officially stated that effort should be made to restructure the resource under the REPowerEU Plan, so as to use it to increase funds under the rehabilitation program,” the Ombudsman wrote further.
In her letter, Prof. Diana Kovacheva again summarized the complaints reporting unfair allocation between regions in the country, between municipalities and between projects in individual municipalities, which leaves residential buildings that are most in need of energy renovation outside the scope of approved proposals.
The Ombudsman emphasized that the associations of owners object to the reliability of the energy audits and the non-exercise of control on the energy efficiency certificates as produced by the audits that in some cases were conducted by energy auditors who lacked sufficient competence, which is the reason for the erroneous conclusion about the existing condition of the buildings. The associations of owners point out that the energy audits rest on invalid input data and give a wrong percentage of the energy saving; drastic differences could be observed in the assessment of blocks of flats of one and the same type.
The Ombudsman added that the associations of owners warn about non-compliance with the purpose of the procedure and with the guidelines of application for the evaluation of projects by the municipalities: selection of projects for low-rise buildings with few occupants, in a relatively better energy condition; or partial projects that cover some of the space of blocks of flats; multiple increase by the municipal authorities (it is unclear why) of the cost estimate of the energy-saving measures in the energy efficiency report, that leads to a reduction of the points that measure the efficiency of the investment; selection as successful of projects for which no energy audits had been registered with the Sustainable Energy Development Agency (SEDA) as of 28 December 2023; non-issuance of award decisions that, as per the guidelines, are administrative acts that can be contested.
People are discontented with the public awareness campaign that suggests that all applicants would be approved as long as their proposals are within the limit set for the municipality, and that is not the case.
“The requests insist on the verification of the energy audit certificates, the revision of the lists of projects selected and the reimbursement of the costs of the owners’ applications given the misleading information campaign. They insist that the government provide an additional credit resource for the beneficiary’s self-financing in the next stage; they call for reconsideration of the burden of the percentage share of the owners who are members of an owners’ association,” the Ombudsman summarized.
In addition, Prof. Diana Kovacheva emphasized that local authority officials also brought their objections to her attention. A declaration on behalf on 14 municipalities from the EcoEnergy Municipal Energy Efficiency Network was submitted to the Ombudsman Institution. The municipalities are Berkovitsa, Bourgas, Gabrovo, Dobrich, Etropole, Kroushari, Kula, Kyustendil, Lom, Lyaskovets, Pavlikeni, Smolyan, Troyan and Yambol. The local authorities’ declaration insists on transparency and access to information about the ranking of each building in the country; on the provision of grant funding for all buildings that are on the reserve list; on the development of an active program with grant funding and opportunities for the extension of interest-free loans to citizens.
Some other municipalities likewise approached the Ombudsman, Prof. Diana Kovacheva: the Municipality of Bratsigovo, reported that all the three submitted project proposals remained on the reserve list and insisted that the selection be reconsidered and that additional funding be provided for these proposals with priority given to the selection of projects from rural communities.
The Municipality of Pleven challenged the decision on a specific proposal for a multi-family residential building (131, Drouzhba Residential Area), disagreed with the evaluation committee’s opinion and asked for verification and approval for financing.
The Municipality of Tsarevo categorically disagreed with the outcomes regarding 16 submitted proposals that remained on the reserve list and likewise insisted that the selection be reconsidered and that additional funding be provided.
In her letter, the Ombudsman underscored the need for further explanations and guidelines for application under Procedure BG-RRP-4.024 “Support for Sustainable Energy Renovation of the Residential Building Stock – Stage II”, item 12 “Beneficiary’s Self-Financing”.
“The complaints of the associations of owners furnish evidence of the municipal administrations’ ambiguous approach to the question as to at which point in time the 20% sum of self-financing by the end beneficiary should be made available and verified by a document: is this sum a condition to be met to apply in the procedure or can it be provided later, for instance after the approval of the applicant in question,” Diana Kovacheva emphasized.
She gave concrete examples: associations of owners from the Municipality of Pleven warned that upon the submission of the package for Stage II, they were required to present a certificate of a bank account that they had opened and that guarantees the availability of the 20% self-financing.
Another example is the associations of owners from the Municipality of Pazardjik who wrote to report that the municipal authorities put a requirement into the contractual agreement with the associations that the whole sum that makes up the 20% self-financing be guaranteed on the bank accounts of the associations by means of a bank statement to be presented in the municipality when the application for joining the program is lodged.
“The associations of owners of flats and outlets in a building at 54 Todor Alexandrov Street in Blagoevgrad reported that the Municipality of Blagoevgrad required that the sum of the 20% self-financing be available upon the submission of the papers for Stage II of the Program”. That is another similar example.
In her letter to the authorities in charge, the Ombudsman drew attention to yet another fact: it is not clear when the National Decarbonization Fund will start functioning in practice so as not to preclude the possibility to apply in Stage II of the procedure of citizens, especially citizens who cannot afford the 20% self-financing within the application deadlines set by the Ministry of Regional Development and Public Works (MRDPW).
