Water consultancy sector study Bulgaria

Commissioned by the ministry of Foreign Affairs

Water consultancy sector study Bulgaria

Client: Embassy of the Kingdom of the Netherlands in Bulgaria 31 October 2016

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Table of contents

List of abbreviations ........................................................................................................................ 3

Introduction ..................................................................................................................................... 4

1. Overview of the Bulgarian companies operating in the area of water issues in Bulgaria ...... 5

2. Current and planned projects in the area of water in Bulgaria, commissioned by the state

institutions, water supply and sewerage companies and municipalities ........................................ 9

3. Funding opportunities in the area of water in Bulgaria in the next four years ...................... 12

4. Interest of Bulgarian companies for future cooperation with the Dutch business ................ 23

5. Promising partnership possibilities for Dutch Companies .................................................... 27

Annex I. Bulgarian companies operating in the area of water ..................................................... 32

Annex II. Current and planned projects in the area of water in Bulgaria ..................................... 33

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List of abbreviations

CBC Cross border cooperation ENI European Neighbourhood Instrument NGO Non-governmental organisation ERDF European Regional Development Fund EU European Union EUR Euro EUSF EU Solidarity Fund FRMP Flood Risk Management Plans MRDPW Ministry of Regional Development and Public Works N/A Not available NACE Statistical classification of economic activities in the European Community NRTWMS National Real Time Water Management System OPE Operational Programme Environment OPRG Operational Programme Regions in Growth PA Priority Axes p.e. Population equivalent RDP Rural Development Programme WSS Water supply and sewerage

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Introduction

The study was commissioned by the Embassy of the Kingdom of the Netherlands in Bulgaria and was implemented in the period September-October 2016.

In the study the following approaches and tools were applied:

• Research of the publicly available information (trade register, register of the Public Procurement Agency, websites of the companies; information on the Operational programmes and other funding programmes);

• Development of an excel database; • Telephone interviews with pre-selected companies; • Online questionnaire to the rest of the companies included in the database;

The aim of the study is to facilitate the Dutch water sector by indicating the business opportunities, potential business partners and projects in Bulgaria. An overview of the Bulgarian consultancy business is extremely useful to increase the chances for Dutch businesses on the local market.

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1. Overview of the Bulgarian companies operating in the area of water issues in Bulgaria

The research on the Bulgarian companies operating in the water sector has been done on the basis of publicly available information and focuses on the companies and research institutes that are active in the area of water on the Bulgarian market and implemented projects in this area in the last five years.

An excel database with the companies has been elaborated which provides possibility for data queries (see Annex I). The database is organized in two sheets.

The first sheet of the database contains the following information about each entity:

• Name of the entity;

• Type: private/public-private/state-owned;

• Main area of operation: consultancy (technical assistance), construction, design,

supervision, research;

• NACE1 rev. 2 code of economic activity;

• Operation: Regional/ National/ International scale of operation;

• Size (staff numbers);

• Annual turnover (EUR, for the last 3 years);

• Years in business;

• Any comments or information available on their reputation;

• Contact details: address/telephone/e-mails;

• Contact person: manager or decision maker.

• Website.

The source of information for the average annual turnover of the companies is the trade register and the financial statements of the companies published there. Main sources of information for the other categories are the websites of the respective entities. When no data was found for a certain category, “N/A” was inserted in the database. With regard to reputation, in the cases of no available information, a brief explanatory note is inserted, describing the main activities and fields of expertise of the company.

Overall, in the database there are in total 49 companies: 19 companies specialized in consultancy (technical assistance); 18 construction companies; 4 companies specialized in design of water

1 Statistical classification of economic activities in the European Community

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infrastructure; 3 companies specialized in supervision; and 5 institutes specialized in research of water issues as presented in the figure below.

Figure 1. Number of companies in the database by type of activity

Most of the companies implement more than one activity – for example design and build or research and consultancy. In this case the area of activity in the database indicates the primary activity of the entity.

Majority of the companies are private companies operating on the national market. Only three research institutes are state owned and one private company is with state participation.

There are 6 companies that are branches of big foreign or international companies. These are:

• Epsilon Bulgaria, part of Epsilon Group; • Egis Bulgaria, part of Egis Group; • SADE Bulgaria, part of SADE Group; • HPC Bulgaria, part of HPC AG; • WYG Bulgaria, part of WYG Group; • Sweco Energoproekt AD, part of Sweco AB.

In the database, there are also companies founded in Bulgaria which have subsidiaries abroad such as Trace Group Hold PLC with branches in Serbia and the Czech Republic and Glavbolgarstroy Holding with a branch in Kosovo.

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18

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5

Number of companies by type of activity included in the database

technicalassistance/consultancy

construction

design

supervision

research

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Fifteen of the companies are small (staff numbers are up to 60), 17 are relatively big (with staff numbers from 80 to 722 people) and for 17 companies we were not able to find the staff numbers.

Most of the companies are located in Sofia, while there are 5 companies located in Blagoevgrad, Varna (2), Burgas and Plovdiv.

The excel database does not contain water supply and sewerage operators as well as national and regional authorities active in the area of water issues as the River Basin Management Directorates. The state company “Irrigation systems” is also not included. Information for these entities is provided in sections 2 and 3 below.

The second sheet contains data on 2-5 main projects implemented by every company in the last 5 years with their source of funding, period of implementation, consortia members and foreign partnerships. Some of the foreign partners of Bulgarian companies identified in the database are:

• Ginzler Stahl und Anlagenbau GmbH, Austria;

• AREMA - Agua, Residuos y Medio Ambiente, S.A., Spain;

• Biogest International, Germany;

• Vitkovice Power Engineering, Czech Republic;

• HR Wallingford Ltd., United Kingdom;

• Seureca, France (subsidiary of Veolia Group);

• SCE, France.

The main foreign partners of Bulgarian research institutes in the water sector can be divided in two groups: academic and scientific institutes on one hand, and regional and municipal authorities on the other. The first type of partnerships are mainly in projects funded under FP7, the European Union's Research and Innovation funding programme for the 2007-2013 programming period. Some of the foreign academic and research institutes, which are in partnership with Bulgarian ones for projects in the water sector, are:

• Democritus University of Thrace, Greece;

• Interbalkan Environment Center, Greece;

• Norwegian Institute for Water Research (NIVA), Norway;

• Istanbul University, Turkey;

• University of Malta, Malta;

• University of Zadar, Croatia.

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The second type of partnerships, i.e. with regional and municipal authorities, are sought mainly for projects implemented under cross-border and transnational cooperation programmes such as the European Territorial Cooperation Programme “Greece-Bulgaria 2007-2013”.

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2. Current and planned projects in the area of water in Bulgaria, commissioned by the state institutions, water supply and sewerage companies and municipalities

The currently implemented and planned projects in the area of water in Bulgaria are listed in an excel sheet, presented in Annex II. The information is based on publicly available data – websites of the contracting authorities and tender registers. For each project the source of information is also provided.

The excel sheet with the current and planned projects contains the following data fields about each project:

• Contracting authority/ Beneficiary institution;

• Name of the project;

• Type of the project: technical assistance (consultancy)/construction/supervision;

• Area: flood risk management/ water management/ water supply and sewerage;

• Start date;

• Duration;

• Funding in EUR;

• Source of funding;

• Consultants/Companies that implement the project, if available;

• Source of information.

With regard to contracting entity, the projects are divided in three groups. The first group includes projects commissioned by state authorities such as the Ministry of Environment and Water, the River Basin Directorates, the Ministry of Regional Development and Public Works, the Ministry of Agriculture and Forestry, the Ministry of Health, Executive Environmental Agency and the state company “Irrigation systems”. The source of funding for most of the projects is the Operational Programme Environment 2014-2020.

The Irrigation System company receives subsides from the state budget in the amount of 7.5 million euro annually through a contract with the Ministry of Agriculture and Forestry. This is insufficient to meet all needs and the Company implements only its primary duties for infrastructure maintenance. Therefore there are only sporadic projects for infrastructure maintenance tendered by the Irrigation Systems Company.

The second group includes projects commissioned by the Water Supply and Sewerage Companies. In Bulgaria at the end of 2015 there are in total 64 water supply and sewerage

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operators. However, so far, only Sofiyska Voda (the Sofia water supply and sewerage operator) was able to make significant investments in water infrastructure2. In the programming period 2007-2013 the water supply and sewerage operators were not eligible for funding from the European Structural and Cohesion Funds. In the current programming period they will be eligible and are expected to implement major investment programmes in the settlements above 10 000 p.e.

The third group comprises projects commissioned by municipalities. These projects target mainly integrated water cycle management funded through the Operational Programme Environment 2007-2013 (OPE) that are still in implementation as well as priority projects supported by the OPE 2014-2020. In the current programming period when the water supply and sewerage operators are eligible for support it is expected that majority of the projects will be implemented by them instead of municipalities as it was in the period 2007-2013.

Where the start date or funding of projects are marked as “indicative”, the public procurement procedure is still ongoing or expected to be launched soon. All projects in the database are either ongoing or soon to be implemented, except for two which ended in June 2016. These are included as an example in the area of flood risk management and have been commissioned by a River Basin Management Authority and the Irrigation Systems Company.

The database contains 34 records of projects. Most of the projects are funded by the Operational Programme Environment (27 records). One project is funded by the Rural Development Programme, one by the National budget and 5 projects are implemented with own resources of the Water operator Sofiyska Voda.

With regard to thematic area, most of the projects are for rehabilitation or development of water supply and sewerage (26 projects), including waste water treatment plants as seen in the figure below. Water management and water quality projects concern improvement of the water monitoring (quality and quantity). There are no ongoing/planned to be launched soon projects for flood risk management. The two projects for flood risk management included in the database were completed in June 2016 as noted above.

2 Sofiyska Voda AD was established in October 2000 under a 25-year Concession Agreement. 77.1% of the shares belong to Veolia water the rest 22.9 to Sofia municipality

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Figure 2. Number of projects in the database by thematic area

By type of interventions, the projects included in the database fall into the following categories: technical assistance, design, construction, supervision, and supply of equipment.

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26

Area of support of the currently onoing and planned projects

water management water quality water supply and sewerage

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3. Funding opportunities in the area of water in Bulgaria in the next four years

Below are presented the funding opportunities in the water sector for the period up to 2020 provided through the Operational Programme Environment 2014-2020 (OPE), the funds of the Ministry of Regional Development and Public Works for landslides and coastal protection, the Rural Development Programme 2014-2020, as well as the transnational and cross-border cooperation programmes with the neighbouring countries.

1) Operational Programme Environment 2014-2020

OPE 2014-2020 will contribute to the development of the water sector by the funding opportunities set out in two priority axes: Priority Axis 1 “Water” and Priority Axis 4 “Flood and landslides risk prevention and management”.

The EU financial support for Priority Axis 1 “Water” comes from the Cohesion Fund and amounts to EUR 1 016 870 809. It comprises two specific objectives: Specific Objective 1 “Protection and improvement of the water resources status”, and Specific Objective 2 “Improvement of the water bodies’ status assessment”. Within PA 1, the following types of activities are envisaged:

• Construction of water supply and sewerage infrastructure in accordance with the River basin management plans and the regional master plans and based on Regional Feasibility Studies – financing will be focused on the agglomerations of more than 10 000 p.e.;

• Completion and/or optimisation of the water monitoring systems; • Equipment for the laboratories of the Executive Environment Agency and the bodies of

the State Health Control for the purposes of monitoring; • Development of new and/or update of existing strategic documents for the

implementation of Water Framework Directive and Marine Strategy Framework Directive3.

The breakdown of the PA 1 budget per fields of intervention is shown in the table below:

3 OP Environment 2014-2020, p. 7

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Table 1. Distribution of the budget under PA 1 “Water” per intervention fields

Priority Axis Intervention field Amount (EUR)

Water Waste water treatment 861 827 826

Water Provision of water for human consumption (extraction, treatment, storage and distribution infrastructure)

55 381 353

Water Water management and drinking water conservation (including river basin management, water supply, specific climate change adaptation measures, district and consumer metering, charging systems and leak reduction)

89 325 430

Water Environmental measures aimed at reducing and/or avoiding greenhouse gas emissions (including treatment and storage of methane gas and composting)

10 336 198

With regard to beneficiaries, the water supply and sewerage operators emerge as important new agents for the programming period 2014-2020. As of April 2015, there are 15 consolidated regional water supply and sewerage operators at the territory of the country and 1 water supply and sewerage operator serving the territory of Sofia Municipality. During the 2014-2020 programming period, the water supply and sewerage operators will be eligible beneficiaries for priority projects resulting from the Regional Feasibility Studies (RFS) for water supply and sewerage infrastructure. For projects which implementation can start before the adoption of the RFS and for phased projects, municipalities are the eligible beneficiaries.

For projects involving monitoring of the quantitative water status, eligible beneficiaries are structures of/ bodies within the Ministry of Environment and Water, Basin Directorates and the National Institute of Meteorology and Hydrology. For projects with water quality monitoring activities, State Health Control bodies to the Ministry of Health are the eligible beneficiaries.

The other priority axis (PA) under OPE 2014-2020, which is water sector oriented, is PA 4 “Flood and landslides risk prevention and management” with the following specific objectives: Specific Objective 1 “Increasing the flood protection and the preparedness of the population for an adequate response to floods”; and Specific Objective 2 “Increasing the protection of the population from landslides”. The European Union (EU) financial support for PA 4 comes from the Cohesion Fund and amounts to EUR 66 749 074. Under PA 4, the following types of activities will be supported:

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• Establishment of National Real Time Water Management System (NRTWMS); • Measures related to flood risk prevention and management solutions, including

ecosystem-based approach. • Establishment of six centers to increase the preparedness of the population for an

adequate response to floods; • Conducting studies and assessments in relation to the second Flood Risk Management

Plans (FRMPs) 2021-2027; • Implementation of measures for landslides risk prevention and management; • Demonstration/ pilot projects and information campaigns for flood and landslides risk

prevention and management.

Responsible bodies for the establishment of the NRTWMS will be the structures within the Ministry of Environment and Water. Municipalities will be eligible beneficiaries for projects involving activities related to flood and landslides risk prevention and management, as well as for demonstration/ pilot projects and information campaigns. With regard to landslides preventive activities, including construction of coast protection facilities and drainage structures, the Ministry of Regional Development and Public Works also stands out as eligible beneficiary, besides municipalities.

2) Operational Programme Regions in Growth The activities related to the construction/ rehabilitation/ reconstruction of water supply and sewerage (WSS) infrastructure supported under OPE 2014-2020 will be complemented by the activities related to the rehabilitation of the urban environment supported under Operational Programme Regions in Growth (OPRG) 2014-2020, managed by the Ministry of Regional Development and Public Works. Investments under OPRG in WSS installations in buildings will support interventions for encouraging the reduced consumption of water in public and private residential buildings and enterprises, as well as technologies for recycling and reuse of water4.

3) Other activities, managed by the Ministry of Regional Development and Public Works

The Ministry of Regional Development and Public Works (MRDPW) also manages projects funded under the EU Solidarity Fund (EUSF), set up in response to major natural disasters. As a reaction to the severe floods in Bulgaria in 2015, the country received EUR 6.3 million financial

4 Operational Programme Regions in Growth 2014-2020, Section 8: Coordination between the funds, the EAFRD, the EMFF and other Union and national funding instruments, and with the EIB.

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support from the EUSF5. These funds are used for restoring infrastructure affected by floods, construction of fortification facilities, drainage structures, and retaining walls.

In addition, the Public Works and Geo-protection Directorate in the MRDPW coordinates the implementation of investment projects for geo-protection measures and prevention of landslides in the country, as well as prevention of abrasion and erosion processes along the Black Sea coast and the Danube coast. These projects are financed from the state budget and other funding sources. The budget for 2016 for prevention of landslides is very small and amounts to EUR 400 000 and for development of water supply and sewerage infrastructure and geo-protection measures to EUR 12.5 million.6

4) Rural Development Programme 2014-2020

The Rural Development Programme 2014-2020 (RDP) addresses several areas of the water sector, namely: water management, water efficiency of irrigation systems and construction of WSS infrastructure in rural areas. Investments in these areas are supported under the following priorities and measures7:

• Priority 4: Restoring, preserving and enhancing ecosystems in agriculture and forestry: Area 4B: Water management;

• Priority 5: Resource efficiency and shift to low carbon and climate resilience economy in agriculture, food and forestry sectors: Area 5A: Water efficiency;

• Priority 6: Social inclusion, poverty reduction and economic development in rural areas: Area 6B: Fostering local development.

The measures under area 4B target water management of agricultural land. The target value of the related indicator for 2023 is 2.52% of agricultural land (113 000 ha out of 4 475 530 ha total agriculture land) to be covered by contracts for improved water management. The funding reserved for water management (along with soil management and biodiversity management) of agricultural land amounts to EUR 955 417 399.

The measures under area 5A “Water efficiency” aim at resource efficiency concerning irrigated land. The target value of the related indicator for 2023 is 49.78% of the irrigated land (45 000 ha out of 90 400 ha total irrigated land) switching to more efficient irrigation systems. The funding reserved for area 5A “Water efficiency” amounts to EUR 105 286 971. The envisaged measures 5 http://europa.eu/rapid/press-release_IP-15-5427_en.htm 6 Source: MRDPW’s budget for 2016 7 European Commission, Factsheet on 2014-2020 Rural Development Programme for Bulgaria

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include: Measure 01 – Transfer of knowledge and awareness activities; Measure 02 – Consultancy services, management services and farm replacement services; Measure 04 – Investments in tangible assets, and Measure 16 – Cooperation.

The measures under area 6B “Fostering local development” are diverse and expand into job creation, local development strategies and improved services/ infrastructure, including WSS infrastructure. An example is sub-measure 7.2 “Investments in the creation, improvement or expansion of all types of small-scale infrastructure”, which supports various infrastructure construction and rehabilitation activities, among which WSS infrastructure activities. This measure will be applied to the territory of 232 municipalities in rural areas, with the exception of specific investments that will be supported by OPRG. In accordance with the Regional Master Plans for WSS and the goals of the Strategy for development and management of the WSS sector in Bulgaria for the period 2014-2023, sub-measure 7.2 of RDP will support activities related to collection, disposal and treatment of waste water. The funds will be directed to agglomerations below 2000 p.e. in rural areas. The need for building sewerage networks and wastewater treatment facilities will be determined after the preparation of regional feasibility studies.

Following the adoption and approval of the regional feasibility studies, in 2018, Bulgarian authorities will review the implementation of the Strategy for the development and management of the WSS sector in Bulgaria for the period 2014-2023, and the impact of activities supported by sub-measure 7.2. Eligible activities, beneficiaries and eligibility criteria may be subject to change after this review.

5) Danube Transnational Cooperation Programme 2014-2020

The Danube Transnational Programme promotes economic, social and territorial cohesion in the Danube Region through policy integration in several priority fields. Within the Danube Transnational Cooperation Programme, Priority Axis 2 “Environment and Culture Responsible Danube Region” with a total budget of EUR 83 423 830 is relevant to water management. More precisely, two of the specific objectives covered by PA 2 are relevant to the water management sector8:

• Specific objective 2.1: Strengthen transnational water management and flood risk prevention;

• Specific objective 2.4: Improve preparedness for environmental risk management.

8 Priorities of the Danube Transnational Cooperation Programme 2014-2020

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Specific objective 2.1 aims at strengthened joint and integrated approaches to further develop and implement River Basin Management Plans in the Partner States in line with the overall Danube River Basin Management Plan in order to improve water management and flood risk prevention. Some of the possible actions which are supported under Specific objective 2.1 are:

Raising awareness on various environmental practices, especially of waste treatment efficiency;

Joint measures for pollution reduction and joint monitoring of the ecological and chemical status of the water;

Integrated policies for groundwater management; Mitigation of conflicts of interest and improvement of coordination between water users; Fluvial and sediment management measures; Education, training and capacity building measures for better water management.

Specific objective 2.4 aims at establishing a more effective governance system for environmental protection addressing emergency situations and improving the preparedness of public authorities and civil protection organizations contributing to the reduction of risks and impact on ecosystem services, biodiversity and human health. Some of the possible activities that may be considered to contribute to this specific objective are:

Strengthening the operational cooperation and interoperability among emergency response authorities in the Danube countries;

Building up a common knowledge base and data observation capacities, e.g. support risk mapping and updating the existing database of accident risk spots, contaminated sites etc.;

Joint development of tools and standardized rapid response procedures; Education, training and capacity building to support risk management.

According to their thematic scope, beneficiaries under these two specific objectives include: local, regional and national public authorities responsible for environmental issues, infrastructure service providers (e.g. WSS companies), NGO9s (e.g. environmental organizations), research and development institutions and universities.

6) Balkan-Mediterranean transnational cooperation programme 2014-2020

“INTERREG Balkan-Mediterranean 2014-2020” is a transnational programme that encourages the cooperation between five countries: three EU member states (Bulgaria, Cyprus and Greece) 9 Non-governmental organisation

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and two candidate countries, Albania and the Former Yugoslav Republic of Macedonia. Within the programme, Priority Axis 2 “Environment” with a total ERDF support of EUR 16 148 162 is relevant to water management and climate change10. More precisely, one of the specific objectives under PA 2 is dedicated to efficient resources’ management of the waste sector, the soil and the water sector. This is Specific Objective 2.2: Sustainable territories: fostering transnational cooperation for resource efficiency and climate change resilience. Some of the possible actions with expected contribution to the specific objective, which are directly related to the water sector are listed below:

Joint development of strategies and tools to reduce the use of water resources, enhancing their efficiency;

Elaboration of environmental friendly management plans for coastal/marine areas; Joint preparation of blue growth action plans and roadmaps; Implementation of innovative pilot and demonstration projects in the field of prevention

of groundwater pollution, marine litter reduction and purification methods; Design of innovative climate change‐related techniques including disaster management

and prevention/protection of climate related risks (floods, storms, drought, fires and erosion).

The non-exhaustive list of beneficiaries includes: local, regional and national authorities, environmental and development agencies, NGOs and civil society organizations, umbrella organizations of SMEs (e.g. chambers of commerce).

7) Joint Operational Programme Black Sea Basin 2014-2020

The Black Sea Basin Programme 2014-2020 is a cross-border cooperation programme under the European Neighbourhood Instrument (ENI). The programme has one major, overall objective: Improve the welfare of the people in the Black Sea basin regions through sustainable growth and joint environmental protection. Within the programme, there is a specific objective related to water management: Specific objective 2: Promote coordination of environmental protection and joint reduction of marine litter in the Black Sea basin11. Specific objective 2 has a provisional budget of EUR 18.80 million (ENI EU funding) and the following two priorities:

• Priority 2.1: Improve joint environmental monitoring;

10 INTERREG Balkan-Mediterranean 2014-2020 11 Black Sea Basin 2014-2020 official website

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• Priority 2.2: Promote common awareness-raising and joint actions to reduce river and marine litter.

Some of the indicative activities under Priority 2.1 are listed below:

• Reinforce joint and compatible cross-border monitoring, evaluation and information systems to prevent and control transboundary pollution;

• Jointly strengthen collaboration between science, industry, relevant stakeholders and decision-makers to address integrated coastal management issues and to harmonise monitoring, marine environment assessment and data provision;

• Promote cross-border cooperation among maritime authorities so to share information on risks and threats (integrated maritime surveillance);

• Improve cooperation on environmental monitoring between stakeholders involved in disaster prevention and management;

• Enhance contact among countries and exchange good practice on early warning systems that allow the population exposed to hazards such as earthquakes, floods and forest fires to take appropriate actions to avoid/reduce risk and to prepare effective responses.

The target groups for both priorities include scientific (oceanographic, hydrographic, meteorological, seismic) agencies and institutes/research centers/universities, coastal, maritime and port authorities, local/regional authorities and agencies, fisheries associations, environmental NGOs, nature parks and protected areas (including marine) management bodies and schools and educational institutions.

8) INTERREG V-A Greece-Bulgaria Cooperation Programme 2014-2020

Within Priority axis 2 of Greece-Bulgaria Cooperation Programme 2014-2020, “A sustainable and climate adaptable cross-border area”, the following specific objectives are related to the water sector12:

• Specific Objective 3: To improve cross-border cooperation on flood risk management plans at river basin level – EUR 12 000 000;

• Specific Objective 6: To enhance water management – EUR 5 850 000.

Under the Specific objective 3, the target is to have 3 international river basin districts (namely the basins of the rivers Strymon-Struma, Nestos-Mesta, Ardas-Arda and Evros-Maritsa) with

12 INTERREG V-A Greece-Bulgaria Cooperation Programme 2014-2020

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jointly coordinated flood risks management plans by 2023. The types of actions include: development of common standards for flood risk management, capacity building, education and awareness raising. Eligible beneficiaries include: public authorities and their agencies for spatial planning, natural disaster management, and civil protection; environmental NGOs; and education providers.

Under Specific objective 6, the target value of the indicator “Percentage of characterized surface water bodies in good ecological status” is 55% by 2023. The cross border area surface water GES is affected by pollution sources in both countries: agriculture in Greece and industry and urban effluents in Bulgaria. Possible actions include integration of management approaches in pollution control, eco-innovation partnerships etc. Eligible beneficiaries include: public authorities and their departments in charge of water and soil management; universities and research institutes; chambers and other collective organizations.

9) INTERREG IPA CBC Programme Bulgaria-Turkey 2014-2020

Priority Axis 1 of the Cross-Border Cooperation (CBC) Programme Bulgaria-Turkey 2014-2020, “Environment”, supports the thematic priority “Protecting the environment and promoting climate change adaptation and mitigation, risk prevention and management”13. PA 1 has EU support coming from the European Regional Development Fund (ERDF) and IPA II funds, amounting to EUR 11 338 407. Flood risk management and water resources management are the main focal points of Specific objective 1.1 and Specific objective 1.2 respectively:

• “Preventing and mitigating the consequences of natural and man-made disasters in the cross-border area”;

• “Improving the capacity for nature protection, sustainable use and management of common natural resources through cooperation initiatives in the cross-border area”.

Possible actions under Specific objective 1.1 include: early warning and disaster management systems, supply of equipment, and elaboration of joint initiatives and strategies. Potential beneficiaries are: all levels of local/regional authorities; central and regional offices of relevant national and governmental institutions; regional and sector development agencies.

Possible actions under Specific objective 1.2 include: small-scale investments, exchange of experience and know-how, and joint initiatives addressing water quality and management. Eligible beneficiaries are the same as these listed under Specific objective 1.1, including administrations

13 INTERREG IPA CBC Programme Bulgaria-Turkey 2014-2020

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of protected areas, euro regions, universities, chambers of commerce, NGOs and youth organizations.

10) INTERREG IPA CBC Programme Bulgaria-Serbia 2014-2020

Priority Axis 3 of the CBC Programme Bulgaria-Serbia 2014-2020, “Environment”, supports the thematic priority “Protecting the environment and promoting climate change adaptation and mitigation, risk prevention and management”14. PA 3 has EU support coming from the ERDF and IPA funds, amounting to EUR 8 696 074. Flood risk management and water resources management are the main focal points of Specific objective 3.1 and Specific objective 3.2 respectively:

• “Preventing and mitigating the consequences of natural and man-made disasters in the cross-border area”;

• “Promoting and enhancing the utilization of common natural resources, as well as stimulating nature protection in the programme area, through joint initiatives across the border”.

Possible actions under Specific objective 3.1 include: early warning and disaster management systems, supply of equipment, and capacity building. Potential beneficiaries are: all levels of local/regional structures dealing with emergency situations; central and regional offices of relevant governmental institutions; regional and sector development agencies.

Possible actions under Specific objective 3.2 include: preservation and improvement of the quality of water, and related promotion initiatives. Eligible beneficiaries are the same as these listed under Specific objective 3.1, including administrations of protected areas, universities, environmental NGOs and local action groups (LAGs) supported under measure “Leader” within the Rural Development Programme 2014-2020 for Bulgaria and within IPARD for Serbia.

11) Interreg V-A Romania-Bulgaria Programme 2014-2020

One of the issues addressed by Priority Axis 3 of the Interreg V-A Programme Romania-Bulgaria 2014-2020, “A safe region”, is flood risk management. Under PA3, there are two types of interventions – one directed at climate related risks, and one directed at non-climate related natural risks (e.g. earthquakes) and risks linked to human activities. EUR 17 259 641 are allocated to measures related to prevention and management of climate related risks such as erosion, fires, floods, storms and drought.

14 INTERREG IPA CBC Programme Bulgaria-Serbia 2014-2020

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Soft measures which could get financing are elaboration of harmonized standards, forecasting systems, early warning and alert systems, risk mapping tools and data bases. Hard measures include land improving (e.g. sanitation and reforestation of river banks, building flood and coastal defense facilities such as dikes and reservoirs). Possible integrated measures are mainly focused on measuring and monitoring of environmental parameters. Eligible beneficiaries are in the first place national and local institutions in charge of managing emergency situations, NGOs and universities.

12) INTERREG IPA CBC programme "Bulgaria – the former Yugoslav Republic of Macedonia" 2014-2020

Priority axis 1 of the programme, “Environment” could potentially support water related projects. EUR 5 789 852, which constitutes 35% of the programme budget15 have been allocated to this priority. The programme aims at two specific objectives under PA1, namely:

• SO 1.1: Environment protection and sustainable use of the common natural resources of the CBC area;

• SO 1.2: Prevention and mitigation of consequences of natural and man-caused disasters of cross-border dimension and impact.

Two types of actions are supported by PA1 to contribute to the specific objectives: investments (e.g. investments in small infrastructure and equipment) and soft measures (e.g. carrying out studies, trainings, establishing networks). Beneficiaries include local/regional authorities; regional offices of relevant governmental institutions; regional and sector development agencies; research institutes; and social institutions.

15 INTERREG IPA CBC programme "Bulgaria – the former Yugoslav Republic of Macedonia" 2014-2020

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4. Interest of Bulgarian companies for future cooperation with the Dutch business

The fields of expertise that the identified companies would like to develop and their interest in partnership with Dutch companies is researched on the basis of two methods for gathering information: an online survey and telephone interviews.

The answers of the interviewed entities and the entities that responded to the online questionnaire are presented in a separate sheet to the companies’ database (Annex 1).

Both the interview and the online survey aimed to collect information on the following questions:

1. Present areas of activities of the entities; 2. Future plans for development; 3. Previous partnerships with Dutch and other foreign companies; 4. Interest of cooperation with Dutch companies; 5. Partnership possibilities.

Telephone interviews

Of the 49 companies and institutes in the database, 25 companies and 3 research institutes have been pre-selected for the telephone interview. The selection have been based on the following criteria:

• To have balanced representation of all type of companies and focus of consultancy companies;

• Included are mainly big companies with sufficient resources and relatively good reputation; • Included are the companies which implemented big projects in the last years; • Excluded are the companies for which there is insufficient information (no web-site).

The response rate of the telephone interviews was 29%. Overall, 8 out of the 28 companies responded to our request for a brief interview. Seven of these companies are specialized in consultancy (technical assistance) services. Their current thematic areas of competence are diverse and include: water resources; marine areas and aquaculture; nature and ecosystem services; environmental assessments; design of WSS infrastructure, including WWTPs; energy efficiency of the water cycle; irrigation; construction of dam walls and tailing ponds; flood risk management; correction of river beds; due diligence; pump testing; computer hydraulic modelling. One of the 8 respondents is a private research institute with the following areas of competence: improvement of water management; capacity building; raising awareness; integrated river basin management; cross-border cooperation in the water sector.

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With regard to the development of new areas of competence, most respondents indicate areas which are complementary to their core areas of competence, with the exception of one company which would like to further develop its main fields of expertise. The desired new areas of competence include:

• Development of projects in the water sector; • Implementation of specific activities related to environmental protection (e.g. river basin

management, flood risk management, evaluation of ecosystems and ecosystem services, monitoring and protection of marine environment, development of aquaculture);

• Development of new technological and software skills (e.g. data visualization and data modelling techniques for monitoring of water bodies, related ecosystems and biodiversity);

• Hydraulic modelling; • Computer hydraulic modelling of river basins; • Wastewater management; Purification of water; Sludge management; • Reducing water losses; • Infiltration in sewerage networks; • Analysis of operational and financial parameters and asset management of WSS

companies; • Implementation of new technologies; • Biodiversity and management of protected areas; • Climate change management; green transport; health and environment; • Development, implementation and enforcement of legislation; local governance.

All the respondents have had partnerships with foreign companies in the past. They mentioned partnerships with companies from the following countries: Belgium, Germany, France, Greece, UK, Turkey, Slovenia, Moldova and the UAE. The research institute cited partnerships with the Norwegian Institute for Water Research (NIVA) and the Baltic Environmental Forum (BEF).

One of the respondents mentions a previous partnership with the Dutch consulting engineering company Tauw. Another respondent refers to extensive experience with Dutch partners: PWN (under LOGO East Programme of VNG); Brinck Meter Control Services BV, Water Fund Bulgaria BV and Flowe BV (under the EVD/PSO Environment Programme). Third company has involved Dutch experts in the implementation of its projects. Another partner from the Netherlands, which stands out, is the engineering and project management consultancy company Royal HaskoningDHV.

All the respondents show interest in possible future partnerships with Dutch entities (private companies, research institutes, public organizations and NGOs) in the water sector. One of the

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respondents is especially interested in partnerships with Dutch research institutions and universities such as Delft University of Technology. Most respondents envisage future partnerships as establishment of consortia or joint ventures for development and implementation of projects in the water sector both in Bulgaria and abroad (mainly in the EU and in the Western Balkans). Future partnerships are also viewed as possibilities for exchange of experience and best practices, as well as cooperation in the implementation of international projects. Possible co-working opportunities are identified under the programmes INTERREG, Horizon 2020, LIFE, etc.

One of the companies notes that it may offer joint participation in tenders in specific regions such as the Western Balkans, Turkey, the Eastern Partnership countries and North Africa. It also highlights its experience with some of the operational programmes implemented in Bulgaria: OP “Environment”, OP “Regions in growth”, and OP “Innovation and competitiveness”.

Online survey

As far as the online survey on CheckMarket is concerned, as we expected, the response rate was lower than the phone interviews – 16%. Overall, 3 out of 19 companies invited completed the questionnaire. One of the respondents offers mainly consultancy services in the water sector. Another one combines consultancy, monitoring and supervision services in its portfolio. The third respondent is specialized in design, engineering, construction of WSS infrastructure and WWT facilities.

The areas of competence the companies would like to develop in future years include:

• Further development of consultancy services in the water sector; • Environmental protection and management; • Protection of the harmful impact of water; • Sludge management; • Competences related to measuring activities.

All the respondents have had partnerships with foreign companies in the past. Some of the foreign partners that were mentioned are: Mott MacDonald, UK; Meyer & John, Germany; Strabag, Austria; Alpine Bau.

At the same time, none of the respondents has had partnerships with Dutch companies before but all of them show interest in future co-working possibilities. The type of partnerships that are unanimously desired by all respondents are consortia/ joint ventures for participation in tenders, as well as exchange of know-how and good practices. One of the respondents also shows interest in cooperation in research activities. The most valuable benefits that a future partnership may bring, according to respondents, are listed below in descending order of importance:

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• Specific expertise and know-how; • Financial resources for the implementation of future projects; • References for the implementation of completed projects; • Experts complementing the team.

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5. Promising partnership possibilities for Dutch Companies

Summarized results of the study are visible on the infographic (Figure 3) and our conclusions are presented in greater detail further below in the text.

In order to investigate the business possibilities for Dutch companies at the Bulgarian market below we have summarized the main findings with regard to:

• Funding opportunities; • Immediate opportunities

in the nearest future; • Possible partnerships

with Bulgarian companies.

Figure 3. Main findings of the water sector study

Funding opportunities

The major business opportunity for Dutch companies at the Bulgarian market seems to be the establishment of consortia and/or joint ventures for participation in tenders and, subsequently, implementation of projects funded under the Bulgarian operational programmes, co-financed by the European Structural and Investment Funds. Bulgarian companies in the private sector show interest in such type of partnership and the potential benefits it may bring: financial resources; references for specific experience; and experts complementing their teams. The main operational programmes that provide funding in the water sector in Bulgaria for the 2014-2020

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period are: OP Environment (OPE) and the Rural Development Programme (RDP). Also, minor investments are envisaged under OP Regions in Growth (OPRG) and the budget of the Ministry of Regional Development and Public Works. The water related funding opportunities under OPE and RDP are presented by thematic categories below:

• Improvement of water resources and water bodies status (under OPE) – EUR 1 016 870 809;

• Flood and landslides risk prevention and management (under OPE) – EUR 66 749 074; • Water management of agricultural land (under RDP) – EUR 955 417 39916; • Irrigation systems (under RDP) – EUR 105 286 971; • Construction, reconstruction and rehabilitation of small-scale WSS infrastructure (under

RDP) – EUR 229 500 000.

In addition, several transnational cooperation programmes provide funding opportunities in the water sector. More specifically, financial support under these programmes is given to water management and flood risk prevention activities. The water related funding opportunities under the specific programmes are presented below:

• Danube Transnational Cooperation Programme 2014-2020 – EUR 18 841 076; • INTERREG Balkan-Mediterranean 2014-2020 – EUR 2 800 000; • Joint Operational Programme Black Sea Basin 2014-2020 – EUR 18 800 000.

The INTERREG cross-border cooperation programmes with Bulgaria’s neighbouring countries (Greece, Turkey, FYROM, Serbia and Romania) represent a third source of funding opportunities.

Just like the transnational cooperation programmes, the CBC programmes provide financial support mainly to water resources management, climate change adaptation and mitigation, and flood risk prevention. The distribution of funding for the 2014-2020 programming period under all of the above mentioned programmes is shown in the table below.

16 This is the amount of funding dedicated not only to water management but also to soil management and biodiversity management of agricultural land.

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Table 2. Distribution of funding for the 2014-2020 period per thematic category within the water sector

Funding source Water management (funding in EUR)

WSS infrastructure (funding in EUR)

Flood (and landslides) risk management (funding in EUR)

Water management of agricultural land (funding in EUR)

Irrigation (funding in EUR)

OP Environment 2014-2020 99 661 629 917 209 179

66 749 074 x x

Rural Development Programme 2014-2020

x 229 500 000 x 318 472 466* 105 286 971

Funds of the Ministry of Regional Development and Public Works (2016 budget)

x 12 500 000 400 000 x x

Danube Transnational Cooperation Programme 2014-2020

12 564 411 x 6 276 665 x x

INTERREG Balkan-Mediterranean programme 2014-2020

x x 2 800 000 x x

Joint Operational Programme Black Sea Basin 2014-2020

18 800 000 x x x x

INTERREG V-A Greece-Bulgaria Cooperation Programme 2014-2020

5 850 000 x 12 000 000 x x

INTERREG IPA CBC Programme Bulgaria-Turkey 2014-2020

4 535 362 x 6 803 044 x x

INTERREG IPA CBC Programme Bulgaria-Serbia 2014-2020

2 172 324 x 6 523 750 x x

INTERREG V-A Romania-Bulgaria Programme 2014-2020

x x 17 259 641 x x

INTERREG IPA CBC programme Bulgaria-FYROM 2014-2020

3 474 000 x 2 315 852 x x

Total amount of funding 147 057 726 1 159 209 179 121 128 026 318 472 466* 105 286 971

*This is the estimated average amount in EUR, as RDP 2014-2020 only provides information for the amount of funding dedicated to a whole group of measures

directed at water management, soil management and biodiversity management of agricultural land - EUR 955 417 399.

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Immediate opportunities in the nearest future

The immediate business opportunities for Dutch companies are related to currently implemented and planned projects in the water sector. First, there are projects commissioned by state authorities such as the Ministry of Environment and Water, the River Basin Directorates, the Ministry of Regional Development and Public Works, the Ministry of Agriculture and Forestry, the Ministry of Health and the Executive Environmental Agency.

Second, there are projects commissioned by Water Supply and Sewerage companies. It is worth noting that in the programming period 2007-2013, the WSS companies were not eligible for funding from the European Structural and Cohesion Funds. In the current programming period, however, they are eligible beneficiaries and are expected to implement major investment programmes in the settlements above 10 000 p.e.

Third, there are projects commissioned by municipalities. These projects target mainly integrated water cycle management.

In all three groups, the majority of projects identified in our database are funded under Operational Programme Environment – 27 out of 34 projects presented in Annex 2. Therefore, it can be concluded that OPE 2014-2020 stands out as the most significant current source of funding.

Similarly, there is a clearly visible tendency in the thematic area of the majority of projects. Most projects identified in our database are for rehabilitation or development of water supply and sewerage infrastructure, including waste water treatment plants – 26 out of 34 projects presented in Annex 2. Water management and water quality projects concern improvement of the water monitoring. There are no ongoing/planned to be launched soon projects for flood risk management.

Possible partnerships with Bulgarian companies

Of the 49 companies and research institutes included in our database, 10 companies and 1 research institute responded to our invitation to include them in the current study of the water sector. The research institute and seven companies participated in brief telephone interviews, and three companies completed our online survey. The main positive result of the interviews and the online survey is that all respondents show interest in future partnership with Dutch companies. In addition, all respondents have had experience in cooperation with foreign companies at least once before. The majority of respondents are acquainted with the good reputation of the Dutch water sector, while 36% have had partnerships with Dutch entities before.

The areas of competence that responding companies would like to develop in future years are thematically grouped and listed below:

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• Implementation of specific activities related to environmental protection (e.g. river basin management; flood risk management; evaluation of ecosystems and ecosystem services; monitoring and protection of marine environment; development of aquaculture);

• Development of new technological and software (e.g. data visualization; computer hydraulic modelling of water bodies, related ecosystems and biodiversity);

• Wastewater management (e.g. purification of water; sludge management); • Reducing water losses; • Analysis of operational and financial parameters and asset management of WSS

companies; • Climate change management; green transport; health and environment; • Development, implementation and enforcement of water related legislation; local

governance.

Most respondents envisage future partnerships as establishment of consortia or joint ventures for development and implementation of projects in the water sector both in Bulgaria and abroad (mainly in the EU and in the Western Balkans). Future partnerships are also viewed as possibilities for exchange of experience and best practices, as well as cooperation in the implementation of international projects. Possible co-working opportunities are also identified under the programmes INTERREG, Horizon 2020, LIFE, etc.

The most valuable benefits that a future partnership may bring, according to respondents, are: specific expertise; financial resources; references for completed projects; and last but not least, experts complementing the team.

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Annex I. Bulgarian companies operating in the area of water

Excel database attached

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Annex II. Current and planned projects in the area of water in Bulgaria

Excel database attached

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© Netherlands Enterprise Agency | July 2017

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