El Bonus is a licensed energy trader focused on purchasing electricity from RES plants and balancing them. With over 15 years of experience in the free electricity market, the company grew to be one of the largest standard balancing groups, entirely consisting of renewable electricity producers with a capacity of 400 MW. Victor Gugushev is a legal expert in the field of energy and a partner at El Bonus.
Mr. Gugushev, Bulgaria’s RES sector is predominantly dominated by local capital - SeeNext data show that in 2022 about 14% of RES companies operating in Bulgaria were owned by foreign investors. Why do you think that is?
The predominance of local capital in Bulgaria's RES sector can be attributed to several factors. Firstly, the Bulgarian government has implemented various measures to encourage local investment in renewable energy. This includes providing subsidies and incentives for local companies to invest in RES projects. Additionally, there is a growing awareness of the importance of renewable energy among Bulgarian citizens and businesses, which has encouraged more local investment in the sector.
At the same time, it is important to note that foreign investors have been at the forefront of large RES projects in the region, providing significant capital and expertise to the sector. These projects often require significant upfront investment and a deep understanding of the energy market, which foreign investors are well-positioned to provide.
Like you noted, foreign investors usually are at the forefront of big RES projects in SEE. Do you think the Bulgarian renewables scene is driven forward by companies coming from abroad or trends are dictated by local investors and context?
The renewable energy scene in Bulgaria is driven by a combination of local and foreign investors. On the one hand, local investors bring an understanding of the Bulgarian market and context, which is essential for the successful implementation of RES projects. On the other hand, foreign investors bring capital and expertise, which is critical for the growth and development of the sector.
It is safe to say that trends in the Bulgarian renewables scene are a result of a collaboration between local and foreign investors. The beauty of it is that many Bulgarians working abroad are now establishing bridges for foreign investments with fundaments of cooperation and trust.
What is El Bonus’ experience with foreign capital, have you advised clients from abroad?
We have extensive experience in working with foreign capital. Over the years, we have advised numerous clients from abroad on a variety of energy-related matters, from the commissioning of power plants, EPC, relations with state authorities, ESO EAD, distribution companies, public providers, conclusion of necessary contracts, issuance of licenses for trading and production of electricity, further O&M services, electricity trading on the regulated and free market, relations with coordinator of balancing groups, energy exchange and more.
What are the main advantages and, on the other hand, the main obstacles that foreign investors encounter in Bulgaria?
The main advantages of investing in the Bulgarian RES sector for foreign investors include favourable government policies, a growing market for renewables, and a fast-developing infrastructure. At the same time, foreign investors may encounter several obstacles, including bureaucratic red tape, limited access to financing, and finding a trusted local partner as many new “professional consultants” continue to pop up.
Overall, investing in the Bulgarian RES sector is becoming increasingly attractive as the market continues to grow and mature. By working closely with local partners and leveraging their expertise and knowledge of the market, foreign investors can overcome many of the challenges they may encounter and reap the benefits of the future of energy.