Regional Minister Takes the Municipal Investment Program “Under Direct Control”

The National Assembly adopted the controversial provisions in the 2026 state budget, which grant the Minister of Regional Development and Public Works the authority to manage the list of investment projects for Bulgarian municipalities. The proposals were adopted on second reading with 114 votes in favor, 85 against and 7 abstentions. The 2026 budget is the first to lack Annex 3, which traditionally lists these projects.

We remind you that the municipal investment program began with the 2024 Budget – that was when, for the first time, it was clearly specified how much money the state would allocate and for which municipal capital projects, and the National Assembly approved the list of projects as an annex to the budget law. However the ability of municipalities to amend their projects three times a year has ballooned the program to 8.1 billion levs for the 2025 – 2027 period, and as early as 2024 a proposal was made to update the budget due to hundreds of new requests from local authorities.

On October 1, 2025 however Parliament swiftly transferred the authority to approve changes to the list to the Council of Ministers. The catalyst at the time was the water crisis in Pleven and the change was made with the stipulation that adjustments would be limited to water and sewerage projects.

In June of this year Prime Minister Rumen Radev announced that the projects under the program lacked actual financial backing and called on mayors to shift their focus to European funds.

The provisions adopted today call for the list of projects in question to be completely eliminated in 2026. Instead funding will be provided only for projects on that list that are not eligible for European funding and that have actually begun. The latter must have a signed agreement with the Ministry of Regional Development and Public Works (MRDPW) by the end of 2025 and either a published tender, a contract with a contractor or an open construction site by July 1, 2026.

An important detail is that the Council of Ministers (CM) will determine the projects to be funded upon the proposal of the regional minister, who will, in practice, be able to negotiate with municipalities to modify the terms of agreements already concluded, but without exceeding the established financial limit. Payments will first go through the Bulgarian Development Bank (BDB) – up to €460.2 million – and once this resource is exhausted through the MRDPW budget using funds from the central budget amounting to up to €600 million.

It was precisely this point that outraged Assen Vassilev, the former finance minister from the “We Continue the Change” party, who warned that this would give the minister the sole authority to decide which municipalities to pay.

This provision grants the Minister of Regional Development the sole authority to decide which municipalities will be paid, to unilaterally amend contracts already signed with municipalities and to determine whether they will be paid at all and when. Instead of having rules and a transparent list of projects, you are taking us back to the days of Tsarist Bulgaria – even then we had a Constitution, not an autocrat,” Vassilev pointed out.

Even after a revote requested by Vassilev, the members of parliament once again approved the texts.

Translated with DeepL.