Today, the European Commission and the European Investment Bank announced the allocation of €1.8 billion from the Modernization Fund to support 45 clean energy investments in 12 different Member States. This includes the first investment in Portugal, which became a beneficiary Member State in 2024.
Financed by revenues from the EU Emissions Trading System (EU ETS), this disbursement brings the total support from the Modernisation Fund to €20.7 billion for 294 investments since 2021. The Fund supports the modernization of energy systems in the EU, in particular high-impact projects that will reduce greenhouse gas (GHG) emissions in the energy, industry, and transport sectors and improve energy efficiency. These investments help countries achieve their climate and energy goals, implement their national energy and climate plans, strengthen their industrial competitiveness, and reduce their dependence on fossil fuel imports.
This second disbursement in 2025 is in addition to the €3.66 billion already disbursed in July for 34 investments, bringing the total amount disbursed in 2025 to €5.46 billion and the total number of investments in all beneficiary Member States to 79. This year alone, payments were made to Bulgaria (€50 million), Croatia (€224 million), the Czech Republic (€1.78 billion), Estonia (€111 million), Hungary (€279 million), Greece (€163 million), Latvia (€40 million), Lithuania (€42 million), Poland (€1.44 billion), Portugal (€15 million), Romania (€1.24 billion), Slovakia (€26 million), and Slovenia (€47 million).
All 79 projects supported in 2025 are focused on renewable energy production, the use and deployment of renewable energy sources, the modernization of energy networks, and the improvement of energy efficiency. Some examples include:
- heating and cooling from renewable sources for district heating networks and industry in Bulgaria;
- support for the production and use of thermal energy from renewable energy sources and energy efficiency in heating and cooling systems in Croatia;
- investments in renewable energy storage capacity in the Czech Republic;
- improving energy efficiency and renewable energy use in public sector buildings in Estonia;
- renovation and modernization of the electricity grid in Greece;
- increasing the capacity of the electricity grid in Latvia;
- investments in large-scale energy storage capacity in Lithuania;
- improving energy efficiency in municipal thermal baths in Hungary;
- developing a clean air program supporting energy efficiency improvements and heat source replacement in single-family homes in Poland;
- heating and cooling based on renewable energy sources using existing geothermal potential, supported by other renewable sources for natural mineral water facilities and thermal medical facilities in Portugal;
- improving energy efficiency in installations covered by the EU Emissions Trading Scheme in Romania;
- modernizing and developing the electricity transmission and distribution network to facilitate the integration of renewable energy sources in Slovenia;
- improving energy efficiency and reducing greenhouse gas emissions in industry and related buildings in Slovakia.
Context
The Modernization Fund, financed by revenues from the auctioning of emission allowances under the EU Emissions Trading Scheme, aims to support 13 lower-income EU countries (with a gross domestic product per capita below 75% of the Union average in the period 2016-2018) in their transition to climate neutrality. The beneficiaries are Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, and Slovakia, as well as Greece, Portugal, and Slovenia, which became eligible for support from January 2024 under the revised ETS Directive.
The Modernization Fund supports investments in the production and use of energy from renewable sources, energy efficiency, energy storage, the modernization of energy networks, including district heating systems, electricity transmission networks, and a 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 that 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 beneficiary Member States to submit investment proposals for support from the Modernisation Fund are 15 January 2026 for non-priority proposals and 12 February 2026 for priority proposals. Priority investments, which represent over 90% of the portfolio, are focused on modernizing energy systems, reducing greenhouse gas emissions in energy, industry, and transport, and improving energy efficiency, as specified in the EU Emissions Trading System Directive. All other investments that meet the criteria for the Modernization Fund are considered non-priority investments and are subject to further verification.
Further information
Confirmations of priority investments
Recommendations of the Modernization Fund Investment Committee
