Parliament expands municipal capital program with key role for BDB

The National Assembly approved the first update of this year's state budget, inflating the number of municipal projects in the investment program. In the final vote, 158 MPs supported the amendments, 12 were against, and 25 abstained.

With the changes, the total number of municipal projects jumps from 3,066 to 3,472, for which a projected budget of over BGN 8.1 billion is planned for the period 2025 – 2027. BGN 3.8 billion has been allocated for the current year and another BGN 4.3 billion for the period 2026 – 2027.

However, the 2025 State Budget Act stipulates that only BGN 1.6 billion will actually be paid out this year. Of this amount, BGN 750 million will go to municipal projects that have been started but not paid for, as well as to projects started this year. The remaining BGN 900 million will go through the Bulgarian Development Bank (BDB), which this year will be capitalized by the government with an additional BGN 4 billion, which the state will withdraw as debt. This effectively circumvents the deficit, but ultimately all Bulgarian citizens will foot the bill.

However, Deputy Finance Minister Kiril Ananiev specified that the money from the BDB will be released under certain conditions.

Payments from the BDB will be made after the BGN 750 million from the central budget has been exhausted,” he said.

Discussions on the bill included requests for changes between the two readings, including ideas for the 2026 state budget, which is expected to be drafted within a few months.

The discussions mainly involved MPs from the pro-Russian Revival party, the We Continue the Change – Democratic Bulgaria (PPDB) party, the Alliance for Rights and Freedoms (APR) party, and the Greatness party.

We are now at a critical moment – either we create clear rules, or the whole good idea will be meaningless,” said Martin Dimitrov of PP-DB.

He stressed that the party would give partial support to the bill, but between readings it would propose amendments for “equality, fairness, and fair competition” to ensure equality between municipalities.

If things take a negative turn, with reverse selection, where those in power choose and pay for some and completely disregard others, the whole point is lost,” Dimitrov said.

Mehmed Salim of the APS also stressed the need for publicity and “transparency in the allocation of funds.”

The budget is becoming a tool for winning elections, not for development,” Salim said.

Kosta Stoyanov of Vazrazhdane, however, pointed out that as of 2024 there are still unpaid funds amounting to BGN 500 million, and with only a few months left before the publication of next year's draft budget, it might be better to make changes to the way funds are allocated then.

We would like to remind you that the Public Finance Act requires the draft budget to be published by October 31.

We can certainly work in this direction and come up with something, but I don't know if now is the right time, because the draft budget for 2026 will be presented in just a few months,” Stoyanov said.

The draft law passed its first reading, and the deadline for submitting proposals between the two readings was shortened to three working days.

Translated with DeepL.