The intention of the Bulgarian government to impose a temporary moratorium on the new renewable energy projects might lose Bulgaria EUR 1 B of foreign investments over the next 5 years.

This was stated Wednesday at a news conference by Nikola Gazdov, Chair of the Bulgarian Photovoltaic Association.

Gazdov’s statement is in response to an announced last week by Bulgaria’s Environment Minister Nona Karadzhova that the government was going to freeze the construction of renewable energy projects which were at an early stage until an all-out plan for the sector was developed.

The Environment Ministry has also made it clear that in this way Bulgaria would avoid the infringement procedure initiated by the European Commission because of the started construction of wind power parks in territories included in the European protected areas network NATURA 2000. The government’s plan for renewable energy and the respective environmental assessment are expected to be approved by the EC by the middle of 2010.

“If a moratorium is imposed, the foreign investors will not come back for years after it has expired. Bulgaria is going to lose huge investments and several thousand jobs,” Gazdov predicted.

In his words, the lack of a clear legal framework for investments in renewable energy is repulsing potential investors in the sector.

He admitted that there were many “fake” projects in the renewable energy sphere but made it clear that the failure to realize the real ones would mean staggering loses for the Bulgarian economy.

“The announcement about the introduction of the moratorium caused panic and chaos among banks and investors,” he declared adding that the likely ban would affect practically all renewable energy projects in the country because only a small portion of the planned photovoltaic parks with a total capacity of 3 MW had been completed already.

According to the members of the Bulgarian Photovoltaic Association, banks think that the investment environment is unstable and risky and have started to refuse funding for RES projects in Bulgaria. The Deputy Chair of the Association, Ilko Yotsev, said that his application for funding of a solar park was rejected from Raiffeisenbank after the announcement of the Environment Ministry regarding the potential moratorium.

The Association has also warned that the future ban might affect the prospects of Bulgaria to achieve its goal as part of a commitment to the EU to have 16% of its energy come from renewable energy sources by 2020