The European Commission (EC) has extended a €2.4 billion grant from the Modernisation Fund to seven countries to help improve their energy systems, reduce greenhouse gas emissions in energy, and support them in meeting their 2030 climate and energy targets.

The beneficiary countries of this grant are Romania which will receive €1.39 billion (~$1.48 billion), Czechia €520 million (~$552 million), Poland €244.2 million (~$260 million), Lithuania €85 million (~$90 million), Hungary €74.3 million (~$79 million), Slovakia €49.5 million (~$52 million), and Croatia €40 million (~$42 million).

The Fund supports 45 investment proposals of these countries in the areas of electricity generation from renewable sources, modernization of energy networks and energy efficiency in industry, buildings, and transport, and the replacement of coal generation with lower carbon intensity fuel.

The Fund will assist the construction of eight solar parks and two combined cycle gas turbine plants, which will replace lignite with renewables and gas for power generation and modernization of electricity networks in Romania, and the improvement of energy efficiency in the industry in Poland.

It will also be used to modernize public lighting systems within municipalities, convert coal to biomass and gas in district heating and emissions trading system (ETS) installations, and increase energy efficiency in Czechia. It will help produce electricity from renewable energy sources in Croatia and renovate public buildings, increasing energy efficiency in Lithuania.

In Hungary and Slovakia, the Fund will help commission energy storage installations for grid security and rehabilitate and extend district heating and cooling networks.

The grant concludes the third investment cycle of the Modernisation Fund, funded by revenues from the auction of emission allowances from the EU’s EMS. The Fund aims to support ten lower-income EU countries transitioning to climate neutrality by modernizing their power sector and broader energy systems. It supports investments in generating and using electricity from renewable sources, energy efficiency, energy storage, modernization of energy networks, including district heating, pipelines, and grids, and just transition in carbon-dependent regions.

In its first year, the Fund made available €898.43 million (~$955 million) to eight countries to help modernize their energy systems, reduce greenhouse gas emissions in energy, industry, transport, and agriculture and support them in meeting their 2030 climate and energy targets.

The deadline for the beneficiary States to submit investment proposals for the next disbursement cycle is August 16, 2022, for non-priority proposals and September 13, 2022, for priority proposals.

The European Commission had recently proposed the REPowerEU roadmap to make Europe independent from Russian fossil fuels well before 2030, starting with gas, by expediting renewable energy expansion in the wake of Russia’s invasion of Ukraine.

In 2021, EC provided €2.9 billion (~$3.52 billion) to support the ‘European Battery Innovation’ project for research and innovation in the battery value chain.