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Reform Support
© EU

Supporting reforms to foster an attractive business environment and increase competitiveness

Funding Programme
  • 2018

Improving the Governance of State-Owned Enterprises In Bulgaria

In line with a reform commitment for joining the Exchange Rate Mechanism II, Bulgaria requested support to modernise the governance framework of state-owned enterprises according to good international practices.


The Ministry of Finance of the Republic of Bulgaria requested technical support to improve the governance of state-owned enterprises (SOEs) by reviewing and assessing the legal, regulatory and operational frameworks of the Bulgarian SOE sector and by revising and aligning legislation with international best practice. Better SOEs corporate governance is important for improving public services, the financial performance of the companies, and competition in key sectors of the economy.

Support delivered

Launched in October 2018, the project took place in the general context of Bulgaria’s ambition to address the 2018 Country Specific Recommendation on SOEs and to adhere to the Organisation for Economic Co-operation and Development, OECD Guidelines on Corporate Governance of State-Owned Enterprises (“the SOE Guidelines”). The Commission provided support over a 12-month period in the form of technical advisory services by the OECD team of experts.

The support measures consisted of:

  • Reviewing the regulatory and operational framework for state-owned enterprises;
  • Aligning state ownership legislation with OECD guidelines on corporate governance of state-owned enterprises;
  • Preparing a draft law on public enterprises and implementing provisions.

The project covered areas such as: clarifying the rationale for state ownership of enterprises; developing a high-quality ownership policy supported by corporate objectives for individual SOEs; professionalising the state ownership function and ensuring that ownership rights are exercised on a whole-of-government basis; ensuring a level playing field between SOEs and private companies; implementing high standards of transparency and information disclosure; and professionalising boards of directors and empowering them to play a key role in strategy and corporate oversight.

Results achieved

As a result of the project, Bulgaria adopted a new Law on Public Enterprises and set up an Agency for Public Enterprises and Control, PECA.

The support from the Commission assisted the Ministry of Finance in its efforts to fulfil an obligation under Bulgaria’s commitments for entry into the Exchange Rate Mechanism (ERM) II.

The adoption of the new legislation constituted an important first step towards aligning the legal and regulatory environment of Bulgarian SOEs with the SOE Guidelines. The legal and institutional reforms in Bulgaria should contribute towards achieving improving the professionalism and transparency of state ownership and SOE management practices and improving standards of public integrity and corporate ethics.