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EU Invests Over €1 Billion in Energy Infrastructure in Support of the Green Deal

Feb. 21, 2022
The largest amount of funding will go to the EuroAsia interconnector project to support the first electricity interconnection between Cyprus and the European grid.

EU countries have agreed on a Commission proposal to invest € 1.037 billion (US$ 1.18 billion) in five cross-border infrastructure projects under the Connecting Europe Facility (CEF) for trans-European energy networks. CEF will provide financial support to 4 projects for construction and 1 study. The largest amount of funding will go to the EuroAsia interconnector project (€ 657 million or US$ 746 million) to support the first electricity interconnection between Cyprus and the European grid.

“Recent months have reminded us again how crucial a well-integrated EU energy market is for ensuring affordable energy and security of supply, as well as the clean energy transition. While we have made remarkable progress in the last decade with making our market better connected, more can and should be done. I want to particularly highlight the EuroAsia interconnector that will bring an end to the energy isolation of Cyprus and link it to the rest of Europe.”, said Kadri Simson, commissioner for energy.

Well-integrated energy infrastructure networks are necessary for the energy transition, as they facilitate the integration of renewable energy, enhance security of supply and help keep energy prices in check. The allocation of CEF funds therefore supports the implementation of the European Green Deal. Today’s agreement grants financial aid for the construction of 3 projects for electricity transmission and 1 for gas storage, as well as supporting a study on CO2 transport:

EuroAsia Interconnector (€657 million or US$ 746 million)

This electricity project interconnects the transmission networks of Cyprus and Greece, allowing the transmission of electricity in both directions and ending the energy isolation of Cyprus. The 898 km of undersea cables and maximum sea depth of 3000 meters will set new world records for a project of this kind. This investment is a continuation of the financial and political support of the EuroAsia project. The CEF grant comes in addition to the €100 million (US$ 113 million) grant awarded in the Recovery and Resilience Facility instrument.

Baltic Synchronisation Project Phase II (€170 million or US$ 192 million)

The second phase of the Baltic project includes funding for grid reinforcement in Poland and upgrading the transmission infrastructure in Lithuania, Latvia and Estonia - thus supporting the integration of the Baltic States’ electricity system with other European networks. The Baltic Synchronisation project also received funding under previous CEF calls leading to total CEF support of more than €1.2 billion (US$ 1.35 billion), underlining the political importance of this project.

Aurora Line (€127 million or US$ 143 million)

CEF funding will support the development of a third transmission line between Sweden and Finland in order to increase electricity transmission capacity between the two countries and support the integration of onshore and offshore renewable electricity.

Chiren Expansion (€78 million or US$ 88.3 million)

This project covers the capacity increase of a gas storage facility in Bulgaria, which is necessary for regional security of supply in South-East Europe, as well as reducing gas supply costs. It also supports the phase-out of coal in the region, facilitating the clean energy transition.

Northern Lights Phase II (€4 million or US$ 4.53 million)

This study looks into the expansion of the CO2 transport and temporary storage capacity in Norway, open to industrial clusters from across the EU, with the aim to accommodate additional demand.


A final, formal decision by the Commission on the CEF grants is expected in the coming weeks. Only Projects of Common Interest (PCIs) on the EU list adopted by the Commission are eligible for a CEF Energy PCI grant for studies or works. To be defined as a PCI, a project must either contribute to the interconnection of EU countries’ energy networks, provide significant benefits in terms of integrating renewable energy sources, ensuring energy security or diversification, or provide consumers with choices and competitive prices. The Sept.2021 call marks the last CEF call under the 4th PCI list; the subsequent calls will fund projects on the 5th PCI list.

In the period 2014-2020, CEF Energy allocated €4.7 billion (US$ 5.32 billion) to studies and works supporting the implementation of 107 PCIs. In the period 2021-27 €5.35 billion (US$ 6.06 billion) is available for CEF Energy including a new window for cross-border renewable projects in the field of renewable energy, with an allocation of up to 15% of the CEF budget subject to market uptake. A first call for such projects (in the form of prefeasibility studies) is currently open until 1 Feb.

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