The Decarbonization Fund is a landmark initiative aimed at accelerating the green transition and decarbonization of the Greek islands. The fund will be financed by the expected proceeds from the auctioning of 25 million EU Emissions Trading System (EU ETS) allowances, estimated at €1.6 billion.
The fund was established following the signing of a tripartite agreement in November 2024, between the Ministry of Environment and Energy, the European Commission, and the European Investment Bank (EIB), during an event held on the island of Naxos, in the presence of Prime Minister Kyriakos Mitsotakis.
On February 17, 2025, a cooperation agreement was signed between the Ministry of Environment and Energy and the Strategic Contracts Unit (PPF) of the Hellenic Corporation of Assets and Participations (HCAP), outlining the terms for the program’s implementation.
The Fund will support sustainable investments that enhance the energy autonomy of Greek islands by:
- Creating more resilient infrastructure.
- Promoting sustainable water management.
- Advancing electromobility.
- Supporting the green transformation of agriculture, tourism, and maritime sectors.
Investors implementing eligible projects will be able to receive co-financing of up to 60% from the Fund.
Total Budget and Pillars
The total budget of the Fund will be allocated across three strategic pillars, as defined by the Ministry of Environment and Energy:
- New Renewable Energy Sources (RES).
- Interconnection of island grids.
- Installations to increase RES penetration.
The finalization of Greece’s proposals for the eligible green actions is currently underway and will be submitted for approval by the EIB and the European Commission.
All program activities are expected to be completed by 2032.