The government has decided to allow state guarantees on new loans to National Electric Company (NEK) for the expansion of the Chaira pumped-storage plant. The provision will go into the draft 2027 budget, the Council of Ministers press office said after today's meeting. The guarantees will total up to €228,086,452, or the equivalent in another currency.
The loans will pay to enlarge the lower reservoir of the Chaira plant. The plan includes a new Yadenitsa dam and a reversible pressure tunnel to link it with the Chaira dam.
The guarantees will be given only if state aid rules are met. Before the energy minister submits a guarantee proposal, the minister must carry out an analysis. The minister must also show that NEK is not a company in difficulty and can service the loan the state is guaranteeing.
The decision also says that in 2027 no new investment projects funded through state loan agreements will be approved.
The government says preparation of the project is well advanced. It says the project will improve energy security and the stability of the national power system, and will help the grid take in more electricity from renewable sources.
Energy minister Iva Petrova told BNT as early as June that the Chaira plant is a very important facility and that the expansion is a critical infrastructure project. She said it would add storage capacity and make the system more flexible. Energy could be stored for longer, and the plant would run for more hours. Petrova said the system needs this now, because renewable sources are growing at a fairly aggressive pace.
The project has the status of EU Project of Common Interest No. 2.21, confirmed by Delegated Regulation (EU) 2026/764. The government says this status confirms its contribution to linking regional energy markets and to security of supply in Southeast Europe.