Electricity Trading Licences in Bulgaria

Renewable energy, Corporate Clients

As the Bulgarian market has witnessed a notable increase in renewable energy capacity,  Bulgaria has implemented a rigorous licensing process for electricity trading. This article outlines the key steps and documentation required to obtain an electricity trading licence in Bulgaria.

Step 1: Application pack and submission

The first step in obtaining an electricity trading licence in Bulgaria is making an application to Bulgaria’s State Commission for Regulation of Energy and Water (SCREW). 

Required documents for the electricity licence application 

The application must contain a completed application form accompanied by the following legal, technical and economic documents.

Legal documents

1. Applicant’s certificate of good standing;
2. Declarations confirming that:
   1. the Applicant’s directors have not been subject to disqualification or convicted of certain criminal offences;
   2. the Applicant has not been declared bankrupt and is not in liquidation;
   3. SCREW has not revoked any licence previously issued to the Applicant for the relevant activity;
   4. more than 3 months have passed since the entry into force of any refusal to issue a licence for the relevant activity (essentially preventing Applicants from re-submitting an application more than once every three months);
3. A rulebook on working with energy customers (if the Applicant’s relevant activity is customer-facing)

Technical documents 

1. Evidence of the Applicant’s assets, including the integrated information network (proof of office equipment (printers, computers, servers etc), contracts with Internet providers) and any software used for carrying out the relevant activity; 
2. Proof of availability of technical resources required for energy transactions;
3. Information on the Applicant’s shareholding and relevant evidence (shareholders’ agreement, court decisions, shareholders’ register etc);
4. Information on the Applicant’s management and organisational structure, the education and qualifications of the Applicant’s management, and the number and qualifications of the personnel engaged in the licensed activity.

Economic documents

1. Bank certificate for a dedicated bank account holding 1/24 of the Applicant’s annual turnover from electricity trading (subject to a minimum of BGN 150,000) to secure transaction obligations. In the first licensing year, the amount is based on the Applicant’s estimated annual turnover from electricity trading in Bulgaria. In subsequent years, it is determined based on the Applicant’s electricity trading turnover in Bulgaria for the previous year.
2. Written undertaking from the bank to provide SCREW with information about the dedicated account’s balance and the Applicant’s annual turnover from Bulgarian electricity trading.
3. Applicant’s annual financial statements for the last three financial years (if not already published on Bulgarian Companies Registry website), as well as the auditor’s report if the financial statements are subject to an independent financial audit. If the legal entity is newly established and financial statements have not been filed yet, evidence of the availability of funds to implement the project will be required (certificate from the relevant bank about the bank accounts’ existence and their balance);
4. Information on the financing sources intended to be used for the specific activity and evidence of the availability of these sources;
5. Business plan encompassing investment, production, repair programmes, estimated structure and volume of expenses by year as well as projected annual financial statements;
6. Projected balance sheets, profit and loss statements and cash flow statements for a period of 3 years;
7. Estimated prices and quantities for the purchase/sale of electricity or natural gas for a period of 3 years;
8. Evidence of payment of the appropriate application fee. 

If a balancing group manager licence is sought or other special circumstances apply, the SCREW may require additional documentation.

Step 2: Review

The second step involves the review of the application by SCREW. This should take place within seven days of filing. If SCREW identifies issues with the application, it will notify the Applicant in writing. The Applicant has seven days to respond, failing which SCREW is entitled to reject the application. 

Step 3: Decision

The final step is SCREW’s decision to either issue or refuse the licence. SCREW reviews the application in an open meeting. If the licence is refused, the Applicant may not renew their application earlier than three months from the date of the refusal. 

If granted, a licence will be valid for up to 35 years. The duration of the licence will vary and is determined on the basis of asset life span and the Applicant’s financial status. SCREW cannot grant a licence for a period longer than that requested by the Applicant but may impose a shorter period. 

For comprehensive assistance with the licensing process and all energy-related legal matters, please contact us via our contact form or email us directly at [email protected]. We are committed to guiding you through every step and addressing your specific requirements with expertise and precision.