The government has agreed that the state can guarantee new loans to National Electric Company (NEK) for the expansion of the Chaira pumped-storage plant. The guarantees are for up to €228,086,452, or the equivalent in another currency, and are included in the draft 2027 state budget law, the cabinet press office said.

The money is for a project to enlarge the plant's lower reservoir by building the Yadenitsa dam and a reversible pressure tunnel to the Chaira dam. The guarantees must follow state aid rules.

Before a guarantee is proposed, the energy minister must carry out an analysis. The minister must also show that NEK is not a company in difficulty and can repay a loan guaranteed by the state.

The press office said the project is at an advanced stage of preparation. It said the project will help energy security and the national power system, and will make it easier to bring in more renewable energy.

The project also has the status of a Project of Common Interest of the European Union, No. 2.21, confirmed by Delegated Regulation (EU) 2026/764. This status confirms the project's role in linking regional energy markets and in the security of supply in South-East Europe.

Energy minister Iva Petrova told BNT in June that the expansion will allow more energy storage and make the system more flexible. She said energy could be stored for longer and the plant could run for more hours. She said the system needs this because renewable sources are coming online on a large scale.

The cabinet also noted in its decision that in 2027 it will not approve new investment projects that are to be financed with state loan agreements.