The EU invests €650 million in cross-border energy infrastructure

The European Commission will allocate around €650 million in grants from the Connecting Europe Facility (CEF) to help finance fourteen cross-border energy infrastructure projects. These projects will play a key role in strengthening the EU’s energy security, increasing the integration of renewable energies and, consequently, Europe’s competitiveness.

As highlighted in the recently adopted European electricity network package, improving interconnectivity is crucial for the EU to reduce energy prices for consumers and industry and ensure our independence.

This is the second call for proposals from the first list of CIP/MIP. The funding awarded exceeds the initial indicative budget of €600 million for the call, reflecting the success and interest seen in the first call in 2024.

In addition, for the first time, ESM funds will be used to finance the protection of critical energy infrastructure, as well as hydrogen projects, demonstrating the growing maturity of the sector. 

Selected projects

Overall, the funds have been allocated to six electricity infrastructure projects, including smart grids, and eight hydrogen infrastructure projects.

Around €470 million in funding has been allocated to the six electricity projects, which include smart grids.The largest grant, €180 million, will finance the AGUAYOIIproject, which involves the construction of a reversible pumped storage hydroelectric power plant in Spain. This plant combines greater efficiency in generating energy from renewable sources with an underground installation, without the need to expand the existing water reservoirs used by it, and therefore has no impact on the environment.

Around €113 million will contribute to increasing the resilience and protection of critical energy infrastructure against physical, cyber and other threats in Poland, Estonia, Latvia and Lithuania as part of the Baltic synchronisation. This is the first time that the ESM has financed critical energy infrastructure resilience and protection measures on such a scale, improving the EU energy system’s ability to respond to new challenges.

The modernisation of the Čierný Váh facility in Slovakia, one of the first in Europe to combine traditional pumped storage with battery storage on such a scale, will also be financed with a contribution of €63 million.

Another construction grant of around €104 million will go to a smart grid project between Bulgaria and Romania. Transmission and distribution networks will be modernised and digitised to improve efficiency and enable secure electricity flows from renewable energy generation.

The other two electricity projects (one on an internal connection in Austria and the other on a Greece-Egypt connection) will receive grants to finance studies.

In order to contribute to the adoption of the growing hydrogen market and decarbonise EU industry, more than €176 million will be allocated to boosting hydrogen infrastructure. The €120 million grant for the hydrogen storage project in Gronau, Germany, will be the first time that ESM funds have been used to finance a hydrogen-related project. By helping to develop the first large-scale cross-border underground hydrogen storage facility in north-western Europe, the project will strengthen energy security, enable market integration and facilitate the large-scale integration of renewable hydrogen. Other projects in Austria, Bulgaria, France, Germany, the Netherlands and Slovakia will receive grants to finance studies.

Next steps

Following the Commission’s evaluation of the applications, Member States examined the Commission’s proposal in the EIF Coordination Committee on 15 January 2026 and voted in favour. The formal adoption of the award decision will take place in the coming weeks. The European Climate, Infrastructure and Environment Executive Agency (CINEA) will then prepare grant agreements with the beneficiaries. The next CEF call for proposals for energy infrastructure is planned for the second quarter of 2026.

Context

This funding decision is based on the 2025 ESM funding call.

The selected projects were designated as Projects of Common Interest (PCIs) and Projects of Mutual Interest (PMIs) in 2024 under the strategic framework for trans-European energy networks (TEN-E). PCIs are designed to complete the EU energy market and contribute to climate neutrality objectives by ensuring that all Europeans have access to affordable, reliable and renewable energy. MIPs cover cross-border infrastructure between the EU and third countries, contributing to the EU’s energy and climate objectives, including its recently adopted global vision.

More information: European Commission.