The Islands Decarbonization Fund was officially launched on the island of Naxos, supported by the European Investment Bank (EIB), the Greek government, and the European Commission. This initiative, described as a smaller-scale version of the European Union’s Recovery and Resilience Facility (RRF) by Deputy Minister of Environment and Energy Alexandra Sdoukou, is focused on advancing green development across Greek islands.
The fund, with contributions from EIB and public resources, is expected to total €1.6 billion, with an aim to mobilize investments of €3 billion to €5 billion. The government plans to fund its share by gradually selling 25 million carbon allowances (EUAs) under the European Union Emission Trading System (EU ETS).
During the launch ceremony, Prime Minister Kyriakos Mitsotakis emphasized the initiative’s dual benefits, stating, “We are making lives better through this initiative. At the same time, we improve our economy and strengthen our energy security.”
Key projects include:
- €550 million for interconnecting the Dodecanese islands and islands in the northern Aegean Sea to the mainland grid, as part of a €2 billion project by the Independent Power Transmission Operator (IPTO).
- €135 million for renewable energy self-consumption projects, including battery systems for households, businesses, municipalities, and farmers.
- €140 million for solar and wind farms with battery systems in connected islands, offering grants covering 40% of costs.
- €210 million for hybrid renewable energy plants with batteries on non-interconnected islands such as Rhodes, Kos, and Lesbos, covering 42% of costs.
These initiatives aim to replace diesel power generators, meeting 30% to 40% of electricity needs with renewable energy. Additionally, €260 million is allocated for an offshore wind farm, €100 million for water supply and pumped-storage hydropower plants, €30 million for a car charging network, and €100 million for providing green electricity to ships in harbors.
The projects are projected to reduce CO2 emissions by one million tonnes annually and save consumers €3.8 billion in energy costs over 25 years. Minister of Environment and Energy Thodoros Skylakakis noted the initiative’s impact on tourism, stating, “This effort will send a green message with great importance when it comes to our tourism as well.”
