Corporate governance

OECD Review of the Corporate Governance of State-Owned Enterprises in Bulgaria



Date of publication
11 December 2019


This report evaluates the corporate governance framework for the Bulgarian state-owned enterprise sector relative to the OECD Guidelines on Corporate Governance of State-Owned Enterprises. The report was prepared at the request of Bulgaria and is financially supported by the European Commission, DG REFORM. It is based on discussions involving all OECD countries.

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Conclusions and recommendations







Background and framework of the project

Despite large-scale privatisations in the 1990s, SOEs still occupy a central place in the Bulgarian economy in terms of both their size and their dominance in strategic sectors like energy and transport.

While the performance of Bulgarian SOEs is highly heterogeneous, they are generally weak and profitability is very low, both compared to SOEs in neighbouring countries and to private companies in Bulgaria. Thus, while some SOEs function effectively, others accrue large deficits, which in turn may present significant financial risks to the Bulgarian economy

With Bulgaria’s ambition to join the European ERM-II exchange rate mechanism and Banking Union by the end of 2019, Bulgaria has engaged to implement a number of commitments in relevant policy areas, including improving the governance of SOEs by revising and aligning national legislation with the SOE Guidelines. The project is supported financially supported by the EU Structural Reform Support Service (SRSS) Programme.


The role of the OECD

The OECD Guidelines on Corporate Governance of State-Owned Enterprises (the “SOE Guidelines”), first adopted in 2005 and revised in 2015, provide an internationally agreed benchmark to help governments assess and improve the way they exercise their ownership functions in state-owned enterprises.

Building on a rigorous review of the corporate governance framework of the Bulgarian state-owned enterprise sector, the SOE Review of Bulgaria provides concrete guidance to strengthen the country’s legislative and institutional framework and ensure that SOEs operate efficiently, transparently and in an accountable manner.

Bulgaria officially became an adherent to the SOE Guidelines in November 2019. It has thus committed itself to actively promote the implementation of the Guidelines in establishing its ownership practices and in defining a framework for corporate governance of SOEs.


Impact and recent developments

In parallel with developing the Review, the OECD Secretariat also actively supported Bulgaria’s ongoing legislative and institutional reform efforts, by providing administrative and technical support in developing the new “Law on Public Enterprises” which was adopted on 26 September 2019, and promulgated by Decree No.79 on 8 October 2019. The new law addresses the main vulnerabilities in state ownership practices identified in the SOE Review and establishes the legislative foundation for stronger ownership coordination and monitoring throBE ugh the establishment of the Public Enterprises and Control Agency (PECA); more independent, qualified and transparently-nominated boards of directors; and improved disclosure at both the level of individual enterprises and the level of the state.

As a next step, the OECD will continue providing support to the Bulgarian authorities in the implementation of the new law in 2020. Assistance will focus on both aligning the content of the Implementing Rules with the OECD standards as well as developing the technical and administrative capacity of the new Public Enterprises and Control Agency. 



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