Bulgaria’s Coal Sector in Transition – Part II: Investment Outlook in Pernik and Kyustendil
The Pernik–Kyustendil region in southwest Bulgaria has long relied on lignite mining and coal-fired power. Today, only two thermal plants remain operational: the Bobov Dol TPP (630 MW) in Kyustendil province and the smaller Republika TPP (105 MW) in Pernik. These facilities continue to use local open-pit coal mines, but the sector is steadily contracting. In Pernik, the power plant has reduced staff from around 1,200 to just 450, and coal mining employment across the region has declined sharply from approximately 10,000 workers three decades ago to fewer than 500 today.
As Bulgaria works towards ending coal-fired generation by 2038, these regions face significant pressure to restructure their local economies. The remaining plants produce around 904 GWh of electricity annually output that will need to be replaced with low-carbon alternatives. Despite the challenge, this transition presents notable opportunities for industrial investment in clean energy, advanced manufacturing, and green technologies.
Clean Energy and Industrial Opportunities
Solar and Wind Development
Former mine sites and surrounding rural land in the region offer excellent potential for renewable energy development. At Bobov Dol TPP, a 42 MW solar park is already under construction. Both Pernik and Kyustendil municipalities are exploring additional photovoltaic installations and wind energy projects, including a proposed 45-turbine wind farm in the Konyavska mountain range near Kyustendil. These developments benefit from strong grid connectivity and are supported by EU and national funding dedicated to clean energy.
Green Hydrogen and Transitional Gas
Bulgaria’s national hydrogen roadmap designates Pernik and Kyustendil as potential locations for hydrogen infrastructure and production. Pilot projects inspired by the “ZAHYR” hydrogen valley initiative in Stara Zagora may be replicated in these areas. Bobov Dol TPP is being connected to the national gas network and is currently installing gas engines to replace heavy fuel oil. This transitional infrastructure could eventually support blended hydrogen systems or hybrid generators, creating opportunities for investment in electrolyser manufacturing, hydrogen storage, and fuel cell technologies.
Clean-Tech Industrial Parks
Plans are underway to establish climate-neutral industrial parks in both regions, powered by renewable sources. Pernik, in particular, is actively promoting a green industrial park focused on clean manufacturing and logistics. Dedicated EU funding, totalling €70 million for Bulgaria’s coal regions has been allocated for these zones. These sites offer attractive locations for factories producing photovoltaic components, battery systems, electric vehicle (EV) parts, or hydrogen-related equipment.
Energy Efficiency and Local Renewables
Energy efficiency upgrades present another growing market. Kyustendil has launched a €16.5 million programme to renovate public and residential buildings, including insulation, new windows, and rooftop solar installations. Additional funding is directed toward energy retrofits in schools, hospitals, and social housing. These initiatives create significant business potential for construction firms, renewable installers, smart-grid providers, and energy efficiency contractors.
Sustainable Tourism and Agriculture
The natural assets of both Pernik and Kyustendil provide strong foundations for tourism and agri-business development. Kyustendil, with its renowned orchards and mountain landscapes, is well positioned for eco-tourism, wellness retreats, and high-value agriculture. Reclaimed mine land can be repurposed for greenhouses, medicinal herb cultivation, or organic farming, supported by EU rural innovation funds.
Clean Transport and Heating
Local authorities are also investing in modernising heating and transport systems. Pernik is replacing outdated solid fuel systems with efficient alternatives such as heat pumps and solar thermal, and it is upgrading its public transport fleet with electric buses. These initiatives offer opportunities in green mobility, HVAC systems, and e-infrastructure development.
Funding and Support Mechanisms
Just Transition Fund (JTF)
Bulgaria has secured €1.2 billion in Just Transition Fund support, with approximately €122 million allocated to Kyustendil province and €92 million to Pernik. These funds prioritise the creation of sustainable employment and the reduction of regional dependency on coal. Initial phases of the transition include solar farms, industrial zone development, building renovations, and workforce retraining programmes, most of which are already underway with national and EU backing.
Broader EU and National Funding Streams
In addition to JTF, Bulgaria’s Recovery and Resilience Plan allocates 59% of its resources to climate-related initiatives amounting to €1.7 billion for renewable energy and storage, and over €1 billion for energy efficiency upgrades. Other funding tools include InvestEU, EIB public loan facilities, and Cohesion Policy grants. Municipalities are increasingly empowered to apply for these funds directly, boosting investment-readiness and enabling co-financing opportunities.
Labour Market and Infrastructure Advantages
These regions have a skilled but underemployed industrial workforce, many of whom are undergoing retraining with EU Social Fund support. Former coal workers are acquiring skills in solar panel installation, basic electrical engineering, and hydrogen safety protocols. Labour costs remain competitive, typically €350–400 per month making the area attractive for labour-intensive manufacturing or assembly operations. Solid infrastructure including roads, rail, electrical grid, and now gas access lowers entry barriers for industrial ventures.
Public-Private Partnership Opportunities
Local authorities are inviting private investors to co-develop sites and participate in the green transition. In exchange for job creation and alignment with environmental goals, municipalities are offering streamlined permitting, access to serviced land, and co-investment support. Public-private partnerships are central to the development of industrial zones and clean-tech clusters, offering long-term value to early entrants.
Conclusion: A New Industrial Horizon for Bulgaria’s Western Coal Belt
Once defined by lignite, Pernik and Kyustendil are now becoming testbeds for Bulgaria’s low-carbon transformation. With the support of over €200 million in targeted EU funding and access to a skilled workforce and strong infrastructure, both regions are rapidly repositioning as clean energy and green industry hubs.
Emerging opportunities span solar and wind energy, hydrogen production, battery assembly, building renovation, and e-mobility. These projects offer not only profitable investment prospects but the chance to participate in reshaping Bulgaria’s industrial future away from fossil fuels and towards sustainable growth.
For forward-looking companies in renewables, energy technology, or sustainable manufacturing, Pernik and Kyustendil offer the right mix of incentives, workforce, land availability, and strategic location. Acting now means playing a pivotal role in one of Southeast Europe’s most ambitious energy transitions where legacy coal towns are poised to become leaders in the green economy.
- Parliament of the Republic of Bulgaria (January 2023). Law on the Phase‑Out of Coal Generation by 2038. Sofia: Official Gazette.
- Ministry of Energy, Republic of Bulgaria (2021). Report on Lignite Mining Output and Consumption, 2021. Sofia: Ministry of Energy.
- National Statistical Institute of Bulgaria (2021). Yearbook of Energy Statistics, 2021: Lignite Production Figures. Sofia: NSI.
- Energy Policy Group, Bulgarian Academy of Sciences (2024). Forecast: Transition of Coal‑Fired Electricity to 2038. Sofia: BAS Publications.
- Ministry of Innovation and Growth, Republic of Bulgaria (April 2023). National Hydrogen Roadmap 2023. Sofia: MiG.
- European Commission, Directorate‑General for Energy (May 2023). Bulgaria: Hydrogen Strategy Outline within the EU Green Deal Framework. Brussels: EC Publications.
- BTA (Bulgarian News Agency) (March 2024). “Pernik TPP Reduces Workforce after Boiler Shutdown.” Sofia: BTA Press Release.
- WWF Bulgaria (December 2023). Socioeconomic Impacts of Coal Decline in Pernik and Kyustendil. Sofia: WWF Bulgaria Report.
- Municipality of Pernik (February 2024). “Pernik Announces Plans for Renewable‑Powered Industrial Park.” Pernik: Municipal Press Service.
- European Commission (June 2024). Just Transition Fund Allocation for Bulgaria’s Coal Regions 2024–2027. Brussels: EC Directorate‑General for Regional and Urban Policy.
- European Investment Bank (March 2024). Bobov Dol and Pernik Transition: Investment Roadmap and Call for Industrial Zone Proposals. Luxembourg: EIB Advisory.
- Municipality of Kyustendil (January 2024). “Feasibility Study: Wind Energy Development in the Konyavska Mountain Region.” Kyustendil: Municipal Development Office.
- Ministry of Finance, Republic of Bulgaria (April 2024). Recovery and Resilience Plan 2021–2026: Climate‑Related Investments. Sofia: MoF.
- Geoinformation Agency of Bulgaria (2022). Map of Pernik–Kyustendil Coal Region and Infrastructure. Sofia
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