To lead a sustainable energy future, the European Commission and the European Investment Bank have announced an investment of €3.66 billion from the EU’s Modernisation Fund
The funds will support 34 clean energy and infrastructure projects in nine EU Member States, marking the largest disbursement from the Fund since its launch in 2021.
The latest financing round focuses on modernising energy systems, reducing greenhouse gas emissions, and enhancing energy efficiency across the energy, industry, and transport sectors. It will also help beneficiary countries move closer to their national climate targets while strengthening energy security and reducing fossil fuel imports.
The green transition in nine countries
The countries receiving this round of funding include Croatia (€170 million), Czechia (€1.05 billion), Greece (€113.6 million), Hungary (€181.3 million), Latvia (€40 million), Lithuania (€37 million), Poland (€1.33 billion), Romania (€712.3 million), and Slovenia (€19.7 million).
This is the first time Greece is receiving Modernisation Fund support, following its eligibility under the revised EU Emissions Trading System (EU ETS) Directive in January 2024.
The supported projects vary but share the same goal of improving the transition to cleaner, more resilient energy systems. Key initiatives include:
- Renewable heating and energy-efficient cooling systems in Croatia
- Large-scale electricity storage from renewables in Czechia
- Electric bus fleets replacing diesel buses in Greek cities
- Energy efficiency upgrades in public buildings in Hungary
- Expansion of electricity grid capacity in Latvia
- Deployment of large-scale energy storage in Lithuania
- Cleaner heating solutions for Polish households
- Improved energy efficiency in industrial EU ETS installations in Romania
- Modernisation of electricity networks to integrate renewables in Slovenia
Funded by emissions trading revenues
The Modernisation Fund is mainly financed through revenues generated from the auctioning of emissions allowances under the EU ETS. Since its inception in January 2021, the Fund has disbursed €19.1 billion to support energy transformation in lower-income EU countries, defined as those with GDP per capita below 75% of the EU average between 2016 and 2018.
These investments are part of the broader EU strategies, such as the REPowerEU Plan and the Fit for 55 package, which aim to reduce emissions by 55% by 2030 and achieve climate neutrality by 2050. The Fund complements other EU financing instruments, including the Cohesion Policy, the Recovery and Resilience Facility, and the Just Transition Fund.
The next steps
EU Member States looking to benefit from future disbursements of the Modernisation Fund can submit their investment proposals by 12 August 2025 for non-priority projects and by 9 September 2025 for priority projects. Priority proposals include initiatives focused on energy system upgrades, GHG reduction, and energy efficiency improvements as specified in the EU ETS Directive.
The Modernisation Fund is a key component in the push towards climate neutrality, ensuring that all Member States can make the necessary investments in green energy infrastructure and innovation.
