MultiHome Opens the Debate on Alternative Financial Instruments for Home Renovation

The MultiHome Regional Service Hub and platform for Home Renovation, operated by the Energy Agency of Plovdiv hosted a roundtable on 11 February in Plovdiv, Bulgaria, to discuss alternative financial instruments for residential building renovation. The event brought together financial institutions, public authorities, and renovation stakeholders to explore new ways to finance home energy upgrades beyond traditional state grants.

MultiHome: A Key Player in Home Renovation

As a key player in the Plovdiv region, MultiHome is strengthening collaboration between public authorities, renovation businesses, financial institutions, and citizens. By fostering long-term partnerships, it aims to accelerate energy-efficient renovations and support the transition to more sustainable housing initiative build on previous efforts, including the Integrated Home Renovation Service developed for the region.

Policy Shifts Demand New Market Approaches

For over a decade, Bulgaria’s home renovation sector depended on the National Renovation Programme, which covered 100% of renovation costs. This led to a market where private financing options, such as loans for energy efficiency improvements, were largely ignored. As a result, fewer than 1% of residential buildings were renovated, while the expectation of “free” renovations discouraged private investment.

In 2023, the final call for the National Renovation Programme reduced the grant coverage to 80%, revealing the urgent need for new financial models. With a low number of applications received, it became clear that market adaptation is necessary to sustain home renovation efforts.

The Role of Financial Institutions in New Financing Models

The roundtable discussion included representatives from public funds and private banks, who examined how financial institutions can support home renovation with tailored financial products, flexible funding mechanisms, and improved public-private cooperation. The demand for home renovation financing is growing, creating new business opportunities for the financial sector. Experts agree that existing public funds need restructuring and that blended financing models must be explored.

A key challenge is the banking sector’s reliance on individual credit history risk assessments, which do not align well with renovation projects led by homeowners’ associations. Large-scale, building-level renovations offer greater energy and financial savings than individual apartment upgrades, making it essential to adapt loan models to support holistic energy renovation projects. Additionally, there is a need to shift perceptions—energy-saving measures and advanced technologies should be seen as valuable assets in financing assessments rather than cost burdens.

New Approaches to Financing

Current renovation rates fall short of the EU’s 2030 and 2050 targets set by the revised Energy Efficiency Directive (EED) and Energy Performance of Buildings Directive (EPBD). This gap presents a major opportunity for new financial and service models in the home renovation sector. Financial institutions must prepare for the transition from full state funding to blended public-private financing. The key takeaways from the discussion include:

• Free 100% state-funded renovation programmes will no longer be available, making mixed public and private financing essential.
• New financial instruments must be developed to support self-financing and co-financing, requiring collaboration between public institutions and private investors.
• Homeowners need flexible, reliable, and long-term financial solutions to make renovation accessible.
• Trust in loan schemes remains fragile, and efforts must be made to improve public confidence in borrowing for home renovation.
• Financial assessments should be adapted to offer customised financing solutions for different types of homeowners.

Building Trust and Practical Solutions

Financial institutions showed strong interest in developing new approaches that balance investment security with the need for energy-efficient home upgrades. The MultiHome Service Hub and Platform is gaining attention as a trusted coordination centre, bringing together key actors in the renovation value chain. By offering high-quality support and expert advice, it helps financial institutions navigate uncertainties in the market.

Continued dialogue and pilot projects will be crucial to developing practical solutions, starting with small-scale initiatives that can later be expanded. Plovdiv has already hosted innovative events to showcase solutions for sustainable home renovation, demonstrating growing momentum in the sector.

The MultiHome project is co-funded by the LIFE Programme of the EU under Grant Agreement No 101120815.