Bulgaria has two types of environmental funds, each promoting different objectives. These are the Enterprise for Management of Environmental Protection Activities (and similar Municipal Environmental Protection Funds) and the National Trust Eco-Fund.
The main fund is now called the Enterprise for Management of Environmental Protection Activities (which does not describe its character and aims, since it is not an ordinary enterprise). It is an independent non-profit institution and does not have a management role. Instead, the Enterprise implements projects to support environmental strategies and programmes. The Enterprise is managed by a board of directors, chaired by the Minister of Environment and Water. The board also includes NGO representatives, scientists, and representatives from different institutions concerned.
The Enterprise (formerly the National Environmental Protection Fund) was established in 1992. Its management, operations, funding sources, ranges and types of expenses, and other administrative matters are regulated in the Regulation for Collection, Spending and Control of Financial Resources in Environmental Protection Funds, which was approved by Ordinance of the Council of Ministers.
The financial resources are collected from: fees from fuel imports, fees from importing second-hand motor vehicles, privatization funds, sanctions, fines for pollution, administrative fees (including fines and taxes), and payments on previous loans. The main sources of income are taxes and sanction revenues. [Penalties are split between the national Enterprise and municipal funds.] Some two thirds of its recent revenue (over 80% in 2000) comes from a single source, the liquid fuel tax. Other important sources include administrative taxes (varying between 8 and 25% of a year’s budget) and sanctions (5 to 17%). Revenues were 62.7 million Leva (approximately US$100 million) in 2000, 89.7 million Leva (US$144 million) in 2001, and 80 million Leva (US$128 million) in 2002.
Expenditure runs at about 85% of income. Nearly 90% goes in grants to municipalities and in low-interest loans to public or private companies for environmental infrastructure improvements (in particular relating to water and waste), and 5 to 9% is given to the national monitoring system including laboratories and protected area activities. The grants are issued to municipalities for environmental protection projects that have a strong social effect and preferably in regions with socio-economic problems. The low-interest loans are generally issued to companies, and one of the goals is to create jobs while protecting the environment. Examples of projects that have received funding include ecotourism and a municipal herb plantation.
Bulgaria has also established funds at the municipal level. The priority finance activities are the same as for the Enterprise, but in case of Municipal Environmental Protection Funds they are limited within the territory of the respective municipalities.
The second environmental fund in Bulgaria is the National Trust Eco-Fund, which is responsible for managing financial resources accruing from the “debt-for-nature” swap between Bulgaria and Switzerland. In 1995, the Government of the Republic of Bulgaria and the Government of Switzerland signed a debt-for-nature agreement. Bulgaria was the second State in CEE (after Poland) to successfully perform such a swap. Under this agreement, the official Bulgarian debt to Switzerland was reduced by 20%. The remaining debt is paid by the government in Bulgarian currency (Levs) to a specially established fund (the National Trust Eco-Fund) and used to finance environmental protection projects.
The National Trust Eco-Fund was established in 1996, as an independent institution to manage the financial resources under the conditions of the debt-for-nature agreement, as well as funds provided under other agreements with international and national funding sources. It is replenished with monies provided by international financial institutions, governments, international funds, and non-resident legal persons. These monies include grants for environmental programmes and projects; donations from international foundations and foreign citizens to assist the national environmental policy; principal repayments and interest payment on loans extended through the Fund; interest on resources of the National Trust Eco-Fund deposited with the servicing bank; income accruing from portfolio investments of short-term government securities and bonds; and other external revenues consistent with the nature of the activities of the National Trust Eco-Fund.
Expenditures of the Eco-Fund are determined in accordance with strategic priorities and the priorities of the donor governments. The donors are represented in the management committee of the Fund. The Fund has been quite successful, and Bulgaria is now trying to establish a Protected Areas Fund that would also be managed by the National Trust Eco-Fund.
For more information on the Enterprise, see http://www.moew.government.bg or contact EStoyanova@moew.government.bg For more information on the Eco-Fund, see http://www.ecofund-bg.org or contact ecofund@Ind.internet-bg.bg