Interview | The industrial zone near Gyueshevo is a lifeline for Kyustendil

Eng. Ognyan Atanasov is a civil engineer and a graduate of three leading technical universities in Bulgaria. Before entering local government, he set up his own design office, worked as an expert in building renovation and energy efficiency, and developed a small family business in tourism. His professional reputation led him to the position of youngest deputy chairman of the Chamber of Engineers in Investment Design and to two consecutive terms as a municipal councilor in Kyustendil, where he gained experience in public administration.

On November 5, 2023, after a contested runoff, Atanasov was elected mayor of Kyustendil with the support of 64% of the vote and officially took office in the middle of the same month. As mayor, he is focusing on the construction of a high-tech industrial zone, modern processing facilities for agricultural products, and the revival of Kyustendil as a national balneological and spa resort, drawing on his engineering experience and European instruments for a just transition.

Mr. Atanasov, we are conducting this interview shortly before the event we are organizing in the municipality on the topic of just transition. In your opinion, what specific opportunities for economic development and job creation are opening up within the framework of this transformation?

I see enormous potential. Here, the big wave of the so-called "just transition" hit us eight to ten years ago, when most of the mines closed down. At that time, there were no financial instruments to soften the blow, and we were literally thrown into the deep end without a lifeline.

That was when the serious depopulation of the Kyustendil region, including the municipality, began. Many people left to work abroad, in Sofia or in larger cities, and formed, figuratively speaking, "caravans" to the capital, Radomir, and other places where there is more work.

Now, however, a real opportunity is opening up because there will be financial instruments to support small, medium, and micro businesses – the backbone of the economy in Kyustendil. In addition, we will be able to build a municipal industrial zone, and we are already preparing the documents to apply for the open procedure.

Where exactly will the industrial zone be located?

We are planning to build a high-tech industrial zone with an area of 190 decares. It is located next to the main road to Gyueshevo, about 200-300 meters from the route and in close proximity to the border with the Republic of North Macedonia. A total of 13 properties are planned – one of 10 decares and twelve more of 5 decares, all intended for production activities.

Have any companies already expressed interest in setting up in the zone? Are you in preliminary talks?

We are in initial talks with companies that are interested in investing. The level of interest depends mainly on the amount of state aid they can count on. Our research shows that if an investor is certified as class A or B and invests over BGN 50 million in the Kyustendil region, which is less developed, the intensity of aid for certain activities can reach 50%. This possibility was confirmed at a meeting at the Bulgarian Investment Agency.

We also have high hopes for the efforts we have been making consistently since 2017 – first as a municipal councilor and now as mayor, together with the Association of Southwestern Municipalities and a number of business organizations – to update regional support. The goal is to increase the intensity of aid from the current 30 – 35%, which is actually deterring investors from Kyustendil, Pernik, and Blagoevgrad.

As long as we are in the same region as Sofia, the intensity is too low and we are uncompetitive with Plovdiv, Stara Zagora, and other areas where aid reaches 70-75%. Sofia distorts the statistics and the distribution of funds, but we already have a decision by the Council of Ministers on a new regionalization and are waiting for Eurostat to rule. Although the option is not ideal, the exclusion of Sofia is a major victory achieved jointly with the municipalities in the region and the non-governmental sector.

You say that the adopted zoning model is not the best, even though it excludes Sofia. Which option did you support, and is this the only obstacle preventing investors from coming to Kyustendil and the region?

We supported the option where Kyustendil would be in one district with Pleven, Lovech, Vratsa, and several other regions. First, we have similar economic and social indicators; second, comparisons and measures would be more adequate. But anything that excludes Sofia is a positive step in the right direction.

I would like to remind you that the mass depopulation of the municipality and the region began ten years ago when the mines closed without any "safety net"—no funding, no transitional measures. People simply left.

The second major obstacle is the lack of prepared land. Most plots have discrepancies between the cadastre and the zoning plan – a lengthy procedure to bring them into line; many have no electricity, water, sewerage or gas. The installation of utilities alone takes between one and two years and costs a lot of money, which discourages investors.

That is why I insist that Kyustendil should have its own municipal industrial zone, where all communications are connected to the property, the status is "production," and building permits can be obtained within two months. Combined with adequate assistance of up to 70% and measures by the Bulgarian Investment Agency, the conditions will become comparable to those in Plovdiv, Stara Zagora, or Shumen, where investors already receive over 70% grant aid.

The current situation—a lack of prepared sites and only a 30% grant—practically excludes us from the competition. If you were an investor, where would you go: somewhere where you can get a building permit and a 70% grant in two months, or here, where you face lengthy procedures and 30% support?

These conditions are key. How are local authorities preparing to meet the challenges of the energy transition and create new forms of employment? I assume that the industrial zone will create quite a few jobs for the city and the region?

Kyustendil has traditionally developed in three complementary areas: tourism, agriculture, and light industry with a technological profile. We are talking about high value-added manufacturing, not heavy industry. The city has a long history in optics and electronics; large factories for optics, capacitors, etc. used to operate here, and today, although on a smaller scale, two capacitor workshops and a number of other high-tech lines are still in operation. I am convinced that it is precisely in this direction –technology, light industry, plus strong tourism and agriculture – that our sustainable future lies.

What can the municipality do? First, create conditions – modern infrastructure and ready-to-use sites. Second, be an active mediator between business and institutions. Third, conduct high-quality information campaigns so that companies know what they can apply for. I believe we are an example of this: under the current procedure for the diversification of micro, small, and medium-sized businesses in line with the just transition, we organized a meeting that was attended by over 200 company representatives—something unheard of in the entire Southwest region in recent years.

Yes, the intensity of the aid under this scheme is 30%, but there is a "loophole" – if the project falls under the de minimis rule, the company can receive 100% grant funding of up to around BGN 550,000–560,000 (and the ceiling for the program itself is BGN 1 million). This means that companies that have not absorbed European funds in the last three years can receive the entire amount they need – up to BGN 510,000 – without any co-financing, and part of the budget is even available to start-ups.

The total resource is BGN 33 million, and I am convinced that thanks to our active campaign, a large part of these funds will go to the municipality and region of Kyustendil.

BGN 33 million has been allocated under the Just Transition Program. Are these funds only for the Kyustendil region?

Yes, the funds are earmarked entirely for the Kyustendil region. The success of the information meeting I mentioned, which was attended by over 200 business representatives, inspired us to deepen our communication with companies and to pay attention to other opportunities that are opening up under the operational and cross-border programs.

We then organized a similar broad campaign under the Bulgaria-Serbia program, where Bulgarian companies can apply together with Serbian partners for projects worth up to BGN 5 million. Once again, we took a personal approach – as mayor, I approached companies directly to encourage them to participate, to bring institutional weight to bear and, most importantly, to ensure that they received concrete answers to all their questions.

I am extremely grateful to the governing bodies that took part in our information days and provided clear guidance to businesses. This model of active dialogue and support has proven to work, and we intend to build on it in the future.

Does Kyustendil need more investment in retraining and training the workforce? Are the steps taken so far adequate?

Absolutely. I am a firm believer in lifelong learning. People need to constantly build on their skills to be able to cope with a labor market that is changing at an extraordinary pace – artificial intelligence and new technologies prove this every day.

We have good communication with the Ministry of Labor and Social Policy on human resources development programs; we see a common understanding here. But there are also problems. For example, significant funds were initially allocated to retrain miners as IT specialists. This is unrealistic – you can't turn someone who has worked underground into a programmer with a quick course. It makes much more sense to retrain these workers in the installation and maintenance of renewable energy equipment or other technical activities where their skills are similar and the transfer is natural. I am glad that, following our feedback, this approach has been revised.

I look forward to seeing the skills map that the trade unions are developing to identify where the needs of business and the potential of the workforce intersect. But for me, the most important thing is that training funds should not go to classrooms where people listen to lectures after work and stare at the ceiling, tired and unmotivated. The money must go to the companies themselves. Training should take place on the job, while the person is already working and applying their new knowledge in real-life situations. The project can last six months, a year, or two—the important thing is that after it ends, the employee stays with the company, and if they decide to change jobs, they do so with real skills and higher pay. That way, no one falls out of the labor market.

So you are focusing on the direct employer-employee relationship right from the training stage?

Yes, that's the better option. When you learn directly on the job, under the guidance of a specialist who is both a theorist and a practitioner, the training is much more effective – you see the processes in a real environment. I would like to quote the late engineer Ivan Kralev, long-time chairman of the Chamber of Engineers in Investment Design, who often said a military maxim:

More sweat in training, less blood in battle."

If we invest funds so that education takes place on site in companies, people will be ready for the labor market the very next day. If we invest funds so that education takes place on site in companies, people will be ready for the labor market the very next day.

In the discussions held, the business community has strongly welcomed this approach. So far, we have seen many cases where training organizations absorb funds, and people are left with a pile of certificates but still end up registering at the employment office. Transferring training to companies stops this vicious practice and delivers real results.

Which are the main sectors in Kyustendil that can benefit most from the Just Transition Fund?

At the information meeting I mentioned, with over 200 companies in the room, it became clear that the "fan" is as wide as possible. The managing authority has opened the program to cover almost all key activities in the region:

• Agriculture and processing industry – naturally strong traditions in the region;
• Textiles and garment manufacturing – companies that already operate here;
• Energy production and new energy technologies;
• Other light manufacturing with a high-tech component.

There was almost no enterprise that did not fall within the eligible sectors. In addition to existing companies, the scheme also allows start-ups, so the opportunities are truly broad.

What message would you send to young people in Kyustendil who are hesitating about whether to stay and work here?
My message is clear: first, go and get a quality higher education where you think you will get the best knowledge; then come back and invest it in Kyustendil. A smaller town offers real advantages – a higher quality of life, proximity to nature, shorter distances, and a strong sense of community.

I am counting on the new investments from the Just Transition Fund and the industrial zone to create well-paid jobs that will retain and bring back young professionals. This is the missing link for young people—decent pay for their skills—and this is what we are working hardest on.

How do you see the future of Kyustendil after the transition from coal to a sustainable economy? What would the city look like, say, in five years?

I have always argued that the closure of mines and coal-fired power plants should be postponed as long as possible so that we can use every tool available for a smooth transition. The target date is 2038, and the process is unlikely to be fully completed in the next five years – which is good news because it gives us time to prepare.

In my personal vision for 2030, Kyustendil is a city with well-paid jobs based on the three pillars I always talk about: agriculture, tourism, and light industry with high added value. The city must regain its place as a national resort: between 1964 and 1989, Kyustendil was a leading tourist center, officially recognized as a resort, and today it still meets all the criteria. Mineral water – the resource that has sustained life along the Struma River for 8,000 years and enabled the city to mint its own coins as far back as Roman times – must once again become our calling card. We have free debits that should not go down the drain, but into modern spa complexes and tourist products.

In agriculture, the next step is to build modern processing facilities, because today we produce a lot, but sell at low purchase prices. And the industrial zone – together with the green transition programs – will attract investors and give local companies a chance to upgrade their equipment, optimize their processes, and offer higher wages.

Kyustendil has everything it needs to develop in these three areas, and we are already taking the necessary steps to return the city to its rightful place in history.

This is the latest event in your city as part of the European projects we are organizing. Do you have any feedback on how the residents of Kyustendil are responding to such initiatives and what effects they are having? How important is it for citizens here to have such events?

For me, it is extremely important to organize such forums because they give people access to reliable information and help them make informed choices. The topic of the Just Transition is often used for speculation – facts are distorted and spread through inappropriate channels. That is why any event that clarifies the process and the instruments is useful.

I admit that the mood toward the transition is often negative—many believe that there is nothing fair about it. My interpretation is different: the blow came ten years ago, when the mines closed and no one threw us a lifeline. That is why I see the current programs as an opportunity to keep the people who are here and bring back those who left.

The greater challenge, in my opinion, is yet to come for Stara Zagora, where the wave has not yet hit. Kyustendil has already gone through this – now is the time to use the tools available to us and turn the transition into a real opportunity.

Co-funded by the European Union. However, the views and opinions expressed are those of the author(s) alone and do not necessarily reflect those of the European Union or the European Commission. Neither the European Union nor the European Commission is responsible for them.

Translated with DeepL.