Bulgaria’s economy might suffer from the bursting of an emering bubble of renewable energy investments, according to the head of the Bulgarian Industrial Association, Bozhidar Danev.

“The Bulgarian economy has been unbalanced in the recent years because of the stromy development of the construction sector; a similar bubble is now appearing with speculative investments in renewable energy sources,” Danev said Monday as he presented research of BIA about low-carbon energy.

“The construction sector sucked in the credit and human resources of Bulgaria and generated significant but rather unhealthy economic growth. It led to a time bomb in our financial system which still has not exploded. It also led to a rising deficit of our current account, which is extremely dangerous because the foreign direct investments in Bulgaria collapsed. Now because of unhealthy policies we are about to create a new bubble – renewable energy. We are going to finish off the Bulgarian economy by inflating this bubble,” warned Danev.

According to the BIA research, the renewable energy sector in Bulgaria is plagued by speculative capital because of the privileges granted to the companies investing in the sector.

According to Mihail Deliyski, Chair of the Association for Environmental Engineering, who spoke on the issue together with Danev, the Bulgarian state should focus on encouraging the use for renewable energy sources for heating and cooling, which it is not doing at present.

“The state is currently subsidizing two types of renewable energy production – wind and solar parks, and only large-scale ones, which is a prerequisite for attracting foreign investors aiming to making quick profit,” Deliyski stated in order to support of Danev’s argument that speculators are entering the Bulgarian renewable energy sector.