The European Commission adopted the rules on the operation of the Modernisation Fund, an EU solidarity funding mechanism to support ten European Union Member States in their transition to climate neutrality by helping to modernise their energy systems and improve energy efficiency.
To benefit by the Modernisation Fund are all countries from the Central and Eastern European region: Bulgaria, Croatia, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania and Slovakia.
The Modernisation Fund will allocate around 14 billion euros from the auctioning of allowances from the EU Emissions Trading System for the period 2021-2030, depending on the carbon price. Every beneficiary Member State has its own share of allowances to be used under the Modernisation Fund, as determined by the revised EU Emissions Trading System Directive.
The Modernisation Fund will support low-carbon investments in the generation and use of energy from renewable sources, energy efficiency, energy storage, modernisation of energy networks, including district heating, pipelines and grids and a just transition in carbon-dependent regions, supporting the redeployment, re-skilling and upskilling of workers, education, job-seeking initiatives and start-ups.
As one of the key funding instruments of the European Green Deal Investment Plan contributing to the objectives of the European Green Deal, it will increase energy security in the beneficiary Member States by supporting increased interconnections and transformation of energy networks, enhance the financing of renewable energy sources and help make the economies and the energy sectors of the beneficiary Member States greener and cleaner, providing a boost to the green recovery.