Investment Roadmap

CEIS to unlock over Euro 10 trillion of clean energy funding through 2040

Europe is faced with the unprecedented challenge of meeting its energy transition goals of achieving climate neutrality by 2050 (at least 55 per cent emission reduction by 2030), while simultaneously phasing out reliance on Russian fossil fuels (by 2027) and ensuring energy security, affordability and industrial competitiveness.

To address concerns over lagging transition investment in Europe, on March 10, 2026, the European Commission (EC) published the Clean Energy Investment Strategy (CEIS) (COM(2026) 116). It was motivated in part by findings of the Mario Draghi report on the future of European competitiveness (September 2024) that achieving the continent’s energy ambitions requires not only clean generation but simultaneous grid modernisation and a more integrated approach to financing.

To meet 2030 and 2040 climate and energy objectives, European energy investment must increase to Euro 660 billion annually through 2030, and further to Euro 695 billion annually in the following decade, taking the total to over Euro 10 trillion through 2040. In comparison, investments averaged Euro 240 billion per year between 2011 and 2021, highlighting the accelerated pace and scale of future needs. The CIES acknowledges that public budgets – including the European Union’s (EU) Multi-Annual Financial Framework (MFF) and the European Investment Bank (EIB) – cannot meet this gap alone. Public capital must instead function as a strategic lever to crowd in private, institutional and capital market investment.

While EU instruments such as the Connecting Europe Facility-Energy (CEF), the Recovery and Resilience Facility and REPowerEU have accelerated investment, barriers to private capital mobilisation persist. Lengthy permitting and grid connections, fragmented markets, and undervaluation of system benefits continue to deter investment. The CEIS seeks to mobilise private investment by linking Europe’s energy project pipeline with available capital. Around Euro 33.7 trillion in assets is under private management in Europe, including Euro 12 trillion held by institutional investors seeking long-term returns, which energy projects can provide with an appropriate framework in place.

The CEIS is structured around two broad pillars – unlocking capital market access for energy infrastructure, and the strategic deployment of public funds as de-risking instruments – supported by an upgraded institutional dialogue. The strategy recommends four key actions, addressing each of the above.

Supporting capital market access for energy infrastructure

Action 1: Strengthening grid operator balance sheets

• Recognising that transmission system operators (TSOs) and distribution system operators (DSOs) must finance large-scale infrastructure upgrades while maintaining investment-grade credit ratings, the EC and EIB are deploying three complementary facilities:
• Strategic Infrastructure Investment Fund (SII Fund): An equity co-investment platform with an indicative EIB commitment of up to Euro 500 million in necessary anchor capital, to invest in specific energy infrastructure projects, designed to close equity gaps that private managers alone cannot bridge. Projects that fail to reach financial closure due to insufficient equity are the primary target.
• Operator Securitisation Facility (OSF): An off-balance-sheet financing structure that would convert future regulated revenue streams into immediate liquidity. Physical assets would remain under public ownership. The OSF is designed to align financing tenors with the long life cycle of grid assets, mitigating refinancing risk, and reducing the total cost of capital. Smaller operators may benefit through pooling arrangements.
• Hybrid bonds: The EIB acts as anchor investor in hybrid bond issuances by regulated utilities. As hybrid bonds are treated partly as equity, operators can expand their debt capacity and investment headroom without breaching credit limits or diluting ownership.

Action 2: Loan securitisation and intermediated lending for small operators

For smaller grid operators – particularly DSOs – the EC and EIB will explore loan securitisation of existing bank portfolios to free up bank balance sheet capacity for new lending. The initiative builds on the first Growth for Energy operation announced in 2025, in which the EIB shared commercial bank credit risk on loans to municipal utilities. Regional and local commercial banks are identified as critical intermediaries for aggregating fragmented lending demand from small operators across the EU’s heterogeneous DSO landscape.

De-risking instruments

Action 3: De-risking innovative technologies and long-duration storage

• With the International Energy Agency estimating that around 35 per cent of required emissions reductions up to 2050 depend on technologies not yet commercially available, the CEIS identifies innovation financing as structurally critical. Actions include:
• Venture debt and equity support for emerging technologies, including long-duration energy storage, floating offshore wind and solar, ocean energy, airborne wind, agrivoltaics, carbon capture and storage (CCS), carbon capture utilisation and storage (CCUS), and geothermal – all eligible under the EU’s flagship InvestEU programme. The latter supports clean energy investments in a transversal manner through guarantees, enabling investment in projects and enterprises targeting all stages of development. Further, the Horizon Europe programme and the Innovation Fund will continue to provide relevant grant support to clean energy technologies.
• Small modular reactors (SMRs) and advanced modular reactors: Alongside a companion SMR Strategy (COM(2026) 117), the EIB will provide venture debt and other instruments to de-risk demonstration-phase investments ahead of anticipated early 2030s, commercialisation.
• Scale-up Europe Fund: A privately managed vehicle targeting deep-tech and disruptive scale-up companies in clean energy, complementing the European Innovation Council’s Trusted Investors Network.
• Energy-efficiency-as-a-service: A 2026 pilot scheme aiming to leverage Euro 500 million to accelerate uptake of energy efficiency service models for SMEs. A broader Energy Efficiency Accelerator instrument is foreseen under the next MFF’s European Competitiveness Fund.
• Ensuring synergies and maximising effective public funding: EU countries use national funds to de-risk clean energy investments, but limited coordination can reduce efficiency. The EC will use existing frameworks to enhance cooperation, align priorities, avoid duplication, and promote cross-border collaboration, best practices and pilot projects.

Upgraded investment dialogue and strategic funding

Action 4: Establish an Energy Transition Investment Council (ETIC)

The EC will establish the ETIC, comprising institutional investors, financial institutions, EU countries and senior EC officials. The ETIC will replace and upgrade the Investors Dialogue on Energy (established 2022) and provide structured strategic feedback to align EU policy with private investor needs. A sub-group will focus on the role of the EIB, international financial institutions and national promotional banks. The first meeting is scheduled for Q2 2026. Progress will be tracked through the existing Energy Union Task Force.

ENTSO-E’s response to CEIS

The European Network of TSOs for Electricity (ENTSO-E) broadly supported the strategy but flagged implementation concerns, noting that over Euro 800 billion is needed for transmission investment over the next two decades. It welcomed the focus on aligning grid expansion with renewables and supported tools such as hybrid bonds and OSF, while cautioning that the SIIF requires further clarity on governance. The latter reflects a wider concern in the infrastructure investment community about the ability of public co-investment platforms to operate with sufficient commercial flexibility and predictable governance. The EC will need to address this credibly to attract private fund managers as partners. More broadly, ENTSO-E has called for stable regulatory frameworks, cost-reflective grid tariffs, and clearer guidance on implementation, risk-sharing and timelines.

The way forward

Financing tools alone are insufficient without addressing permitting delays, grid connection bottlenecks and return uncertainty; the CEIS must work alongside enabling policies, including the European Grids Package (December 2025) and Solvency II Delegated Regulation (latest amendment in October 2025) reforms. Key next steps include the first ETIC meeting in Q2 2026 and the Energy-System Needs Assessment for the Clean Transition (ENACT) assessment with a post-2030 legislative package in Q4 2026. Throughout 2026, priorities include Solvency II reforms (with major changes focusing on long-term equity investment incentives, recalculated risk margins and updated interest rate stress scenarios), deployment of the Euro 30 billion CEF-Energy budget, and a pilot “energy-efficiency-as-a-service” scheme. Looking ahead, the 2028-34 MFF will introduce a European Competitiveness Fund with an Energy Efficiency Accelerator, while ongoing efforts include EIB’s Euro 75 billion commitment, InvestEU mobilisation, and the Clean Industrial Deal State Aid Framework activation to support the Clean Industrial Deal and the net zero transition.

Net, net, the CEIS sets out a credible pathway to mobilise the scale of capital required for Europe’s transition, but its success will hinge on execution. Aligning financial instruments with regulatory certainty, faster permitting, and coordinated national action will be critical to crowd in private investment. Ultimately, delivering on the CEIS will depend on the EU’s ability to translate frameworks into bankable projects at speed and scale.