EU invests €650 million in cross-border energy infrastructure

This article is brought to you in association with the European Commission.

The European Commission will allocate nearly €650 million in grants from the Connecting Europe Facility (CEF) to help finance 14 cross-border energy infrastructure projects. These projects will play a vital role in strengthening the EU’s energy security, increasing the integration of renewable energy and, as a result, Europe’s competitiveness.

As emphasised in the recently adopted European Grids Package, improved interconnectivity is crucial for the EU to reduce energy prices for consumers and industry and to ensure our independence.

This is the second call for proposals under the first PCI/PMI list. The granted funding goes beyond the call’s initial indicative budget of €600 million, mirroring the success and interest seen in the first call from 2024.

Furthermore, for the first time, CEF funding will be used to support the protection of critical energy infrastructure and to fund work projects on hydrogen, demonstrating the increasing maturity of the sector.

Selected projects

Overall, the funding is allocated for 6 electricity infrastructure projects including smart electricity grids and for 8 hydrogen infrastructure projects.

Nearly €470 million of the funding is earmarked for the 6 electricity projects including smart electricity grids. The largest grant, of €180 million, will support the AGUAYO II project for the construction of a reversible pumped-storage hydroelectric powerplant in Spain. The plant combines improved efficiency in energy generation from renewables with an underground installation, without the need to expand existing water reservoirs used by the plant, therefore having no impact on the environment.

Almost €113 million will help increase the resilience and protection  of critical energy infrastructure from physical, cyber and other threats in Poland, Estonia, Latvia and Lithuania in the framework of the Baltic Synchronisation. This is the first time that the CEF finances resilience and protection measures of critical energy infrastructure on such scale, enhancing the capacity of the EU energy system to respond to new challenges.

The modernisation of the Čierný Váh facility in Slovakia, among the first in Europe to combine traditional pumped hydro storage with battery storage on such a scale, is also supported with a €63 million contribution.

Another grant for construction works of almost €104 million will go to a smart grids project between Bulgaria and Romania. The transmission and distribution networks will be modernised and digitalised to improve efficiency and enable secure electricity flows from renewable generation.

The other 2 electricity projects – one on an internal link in Austria, the other for a connection from Greece and Egypt – will receive grants for support studies. 

To help the uptake of the growing hydrogen market and to decarbonise the EU industry, more than €176 million will be dedicated to boost hydrogen infrastructure. The grant of €120 million for the hydrogen storage in Gronau project in Germany marks the first time CEF funding will be used for a works project for hydrogen. By helping to develop the first large-scale, cross-border underground hydrogen storage facility in northwestern Europe, the project will strengthen the security of energy supply, 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 support studies.

Next steps

Following the Commission’s evaluation of applications, Member States scrutinised the Commission’s proposal in the CEF Coordination Committee of 15 January 2026 and voted in favour of the proposal. The formal adoption of the award decision will follow 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.

Background

This funding decision is based on the 2025 call for CEF funding.

The selected projects obtained the status of Projects of Common Interest (PCIs) and Projects of Mutual Interest (PMIs) in 2024 under the Trans-European Networks for Energy (TEN-E) policy framework. PCIs are designed to complete the EU energy market and contribute to climate-neutrality objectives, ensuring that all Europeans have access to affordable, reliable, and renewable energy. PMIs encompass cross-border infrastructure between EU and non-EU countries, contributing to the EU’s energy and climate goals, including its recently adopted Global Vision.

List of proposals selected for grants in the field of the trans-European energy infrastructure under the Connecting Europe Facility following the call for proposals launched on 3 April 2025.