Today, the European Commission and the European Investment Bank announced that €3.66 billion have been disbursed from the Modernisation Fund to support 34 energy related projects in nine EU Member States.
These investments will support the modernisation of energy systems in the EU. They will reduce greenhouse gas (GHG) emissions in the energy, industry and transport sectors, and improve energy efficiency. The projects will help the beneficiary Member States to meet their climate and energy targets. They will also strengthen the EU's industrial competitiveness by supporting modern, efficient and resilient energy infrastructure, fostering innovation and helping to reduce the EU's imports of fossil fuels.
Funded by revenues from the EU Emissions Trading System (EU ETS) , this is the largest disbursement from the Modernisation Fund to date, bringing the total disbursed funding to €19.1 billion since January 2021. The beneficiaries of today's disbursement are 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 round includes first investments in Greece, which became a Modernisation Fund beneficiary in January 2024.
The 34 supported projects focus on renewable electricity generation, use and deployment of renewable energy sources, modernisation of energy networks and energy efficiency. Examples include:
- support for the production and utilisation of heat from renewable energy sources and energy efficiency in heating and cooling systems in Croatia;
- Investments in electricity storage capacity from renewable sources in Czechia;
- replacement of urban diesel buses with new urban electric buses in Greece;
- improving energy efficiency in public buildings in Hungary;
- increasing the electricity grid capacity in Latvia;
- Investments in large-scale energy storage capacities in Lithuania;
- development of clear air programme supporting energy efficiency improvements and heat source replacements in single-family houses in Poland;
- increasing energy efficiency in EU ETS installations in Romania;
- modernisation and development of the electricity transmission and distribution network to facilitate integration of renewables in Slovenia.
Background
The Modernisation Fund , funded by revenues from the auctioning of emission allowances under the EU ETS, aims to support 13 lower-income EU countries (with a gross domestic product per capita below 75 % of the Union average in the years 2016 to 2018) in their transition to climate neutrality. The beneficiary Member States are Bulgaria, Croatia, Czechia, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Slovakia, as well as Greece, Portugal and Slovenia which became eligible for support as of January 2024, under the revised EU ETS Directive.
The Modernisation Fund supports investments in the generation and use of energy from renewable sources, energy efficiency, energy storage, modernisation of energy networks, including district heating, pipelines and grids, and just transition in carbon-dependent regions. The Fund complements other EU instruments such as cohesion policy , the Recovery and Resilience Facility and the Just Transition Fund . It mobilises significant resources, which can help eligible countries support investments in line with the REPowerEU Plan and the Fit For 55 package . It operates under the responsibility of the beneficiary countries in close cooperation with the European Commission and the European Investment Bank .
The next deadlines for EU Member States to submit investment proposals for Modernisation Fund support are 12 August 2025 for non-priority proposals and 9 September 2025 for priority proposals. Priority investments focus on modernising energy systems, reducing GHG emissions in energy, industry and transport, and improving energy efficiency listed in the EU ETS Directive . All other investments qualifying for the Modernisation Fund are considered as non-priority investments subject to additional scrutiny.
