EMPIRICAL ANALYSIS OF FINANCIAL BARRIERS IN THE TRANSITION TO SMART CITIES IN BULGARIA

Abstract

The transition to smart cities in Bulgaria is particularly important for sustainable urban development. However, it is being delayed due to serious financial barriers and market imperfections. Traditional budget subsidies have been exhausted, which necessitates the exploration of new market mechanisms. The article identifies the severity of financial constraints facing Bulgarian municipalities based on an empirical survey among 43 experts and the definition of a working strategic framework of alternative financial instruments. The analysis outlines six main problems. The most serious are the lack of targeted state funding, limited access to European programs due to lack of capacity and weak interest from private capital. A complex set of green bonds, social impact bonds and shared venture capital funds tied to performance indicators (KPI) is proposed as a solution.