On 10 March 2026, the European Commission published a Communication on the Clean Energy Investment Strategy, aimed at mobilizing private capital for the energy transition. The document complements the Citizens Energy Package and a series of related initiatives—the Affordable Energy Action Plan, the Electricity Networks Package, and the Clean Industrial Deal.
The scale of the investment needs announced is significant. The Commission estimates the annual investment needed in the energy sector at approximately €660 billion for the period 2026-2030 and €695 billion per year for 2031-2040. By way of comparison, average annual investment between 2011 and 2021 amounted to around €240 billion, i.e. an increase of nearly threefold is required. The European Investment Bank (EIB) Group has announced its intention to provide over €75 billion in financing over three years. The InvestEU program has so far mobilized over €57 billion in energy-related investments. The budget of the Connecting Europe Facility – Energy (CEF-Energy) has been increased fivefold to around €30 billion.
The strategy relies on the basic assumption that there is sufficient private capital in Europe — around €33.7 trillion under private management, of which institutional investors (insurers and pension funds) control over €12 trillion. The task is to channel these funds into energy projects through appropriate risk reduction instruments.
Measures targeting network operators
For network infrastructure operators – transmission system operators (TSOs) or distribution system operators (DSOs) – the strategy proposes three main instruments.
The first is the Strategic Infrastructure Investment Fund (SII Fund), designed as a platform for joint equity investments. The EIB is making an indicative commitment of up to €500 million as “anchor capital” with the aim of attracting private infrastructure funds. The second is the Operator Securitisation Facility (OSF), which aims to convert future regulated revenues into liquid investment-grade securities, while the physical assets remain publicly owned. The third instrument is the EIB’s participation as an anchor investor in hybrid bonds of regulated utility companies, which strengthens their balance sheet position, as hybrid instruments are treated partly as equity.
In addition, Action 2 of the Strategy provides for support for the securitisation of existing loan portfolios in order to free up commercial banks’ capacity for new loans to network operators, as well as adapting the Growth for Energy initiative for small operators through regional and local banks.
Ambitious statements, unclear implementation mechanisms
The stated increase in investment from €240 billion to €660 billion per year is unprecedented, but for network operators whose investment programs are financed through network tariffs approved by independent national regulatory authorities, a fundamental question arises: how will significantly higher investment needs be reconciled with the parallel pressure to reduce network tariffs set out in the Citizens’ Energy Package?
Action 2 of the Citizens Energy Package explicitly calls on regulators to apply a “strict approach” when assessing network costs and to reduce network tariffs for consumers. At the same time, the Clean Energy Investment Strategy requires massive investments in network modernization and expansion, which inevitably increase the regulatory asset base and therefore put pressure on tariffs. This is an internal contradiction that the strategy does not address and that puts network operators in an impossible position – to invest significantly more, while regulatory and political pressure forces them to lower or at least stabilize tariffs.
Securitization: a promising but complex instrument
The Operator Securitization Facility (OSF) is a conceptually interesting instrument – the idea of off-balance sheet financing through securitization of future regulated revenues could free up capacity for new investments without directly burdening tariffs. For large TSOs that already have an investment rating and access to capital markets, this could be an additional option for optimizing their capital structure.
The problem, however, lies with small and medium-sized DSOs, which dominate in many Member States, including Bulgaria. The strategy itself acknowledges that the DSO landscape in the EU is “large and diverse, with operators of different sizes, legal environments and regulatory regimes”. Securitizing the revenue streams of such operators requires a standardized and predictable regulatory framework, a transparent tariff methodology, and sufficient scale to form asset pools. In jurisdictions where the regulatory environment is unstable, tariff decisions are unpredictable or politically motivated, and the operational efficiency of DSOs varies significantly, market appetite for such instruments will be minimal. The strategy offers “flexibility” and the possibility of pooling smaller operators, but does not provide specific solutions to overcome these structural barriers.
Hybrid bonds: accessible to few
The EIB’s participation as an anchor investor in hybrid bonds strengthens the issuer’s balance sheet position and sends a useful signal to the market. However, this instrument is realistically only accessible to large, publicly regulated utilities with an established credit rating and a history of market financing. For smaller DSOs in Central and Eastern Europe, which are unrated and operate at a significantly higher cost of capital, hybrid bonds are not a practical solution.
The strategic infrastructure fund is modest in scale
The EIB’s indicative commitment of €500 million to the SII Fund is symbolic in relation to the stated investment needs. Even with a significant multiplier effect from co-investment, this amount represents a small fraction of the equity capital needed for network infrastructure. The strategy itself does not provide an estimate of the total amount of capital expected to be mobilized through this instrument, which makes it difficult to assess its real impact.
Regulatory predictability is the key missing prerequisite
The strategy repeatedly emphasizes the need for “stable and attractive investment conditions” and “regulatory predictability.” However, these formulations remain declarative. In the practice of network operators, the key factor for attracting private capital is not the availability of new financial instruments, but the predictability of the regulatory framework – the tariff methodology, the recognised regulatory base of assets, the permitted rate of return, and the duration and stability of regulatory periods.
The strategy does not propose specific measures to harmonise or strengthen national regulatory frameworks for network operators. It does not address the issue of minimum standards for tariff regulation that would guarantee investors a reasonable and predictable return. Instead, the approach relies on financial engineering (securitisation, hybrid bonds, joint investment funds) without addressing the fundamental problem: if the regulatory framework does not provide a sufficient and predictable return, no financial instrument will make network investments attractive to institutional capital.
Discrepancy between rhetoric and reality in DSO
The document correctly identifies that “lengthy permitting procedures and grid connection processes slow down deployment and increase risks,” and “fragmented markets with differing rules, standards, and planning practices increase transaction costs and hinder the adaptation of rules to different scales.” This is an accurate diagnosis, but the proposed measures—financial instruments and platforms for dialogue—do not address the root of the problem. For a network operator who waits two to eight years for a permit to build a new substation or transmission line, the availability of a securitization line is of secondary importance if administrative barriers make the investment itself impossible within a reasonable time frame.
What would be more effective?
From the perspective of network operators, a more effective approach would first involve ensuring an adequate regulatory return that covers the real cost of capital and reflects increased investment needs. Secondly, accelerating and simplifying the permitting procedures for network infrastructure, similar to the measures already adopted for RES. Thirdly, developing mechanisms for pre-financing network investments that precede the connection of new capacity, without these costs being disproportionately passed on to current consumers. Last but not least, harmonising the minimum standards for regulating network tariffs in the EU so that investors have a predictable framework, regardless of the specific Member State.
Conclusion
The clean energy investment strategy once again verbalises the right messages: the need for massive investment in network infrastructure is indisputable, and the mobilisation of private capital is imperative. The proposed financial instruments—securitization, hybrid bonds, joint funds—are a useful addition to the existing toolkit, but they are insufficient on their own. For network operators, the key weakness of the strategy is that it offers financial engineering as a response to a problem that is primarily regulatory and administrative. Without addressing the internal contradiction between the pressure for lower tariffs and the need for more investment, without strengthening the predictability of regulatory frameworks, and without actually speeding up licensing procedures, the ambitious figures in the strategy risk remaining on paper.
