EU granted the largest possible funding to the key second phase projects of the Baltic States‘ synchronisation programme

On Thursday, October 1st 2020, the coordinating committee of the Connecting Europe Facility (CEF) of the EU Infrastructure Network decided to allocate the maximum possible support to the key projects of synchronisation of the Baltic States with the grid of continental Europe.

Following the application of the transmission system operators of Lithuania, Latvia, Estonia and Poland, € 719.7 million support will ensure the smooth implementation of infrastructure projects and already in 2025 will allow the Baltic States to start operating on the same frequency as Poland and other continental European countries.

Support of a maximum intensity of 75% is granted for the most important and already started synchronisation projects. € 493 million has been allocated for the construction of the Lithuanian-Polish interconnector Harmony Link, support for the installation of synchronous compensators in Lithuania, Latvia and Estonia - € 166.5 million. The remaining part is awarded for the modernization and development/enforcing of the local grids required for the integration of the Harmony Link interconnection.

All together 4 transmission system operators PSE (Poland), Augstsprieguma tīkls (Latvia), Elering AS (Estonia) and Litgrid (Lithuania) received the majority, about three quarters of this year's total CEF budget for energy projects, which is € 979.6 million. Including the  previous € 324 million EU support for the synchronisation it has already exceeded € 1 billion in funding for the first phase of synchronisation, which was so far focused on strengthening the local grids of the three Baltic States and preparing for building Harmony Link interconnector. This is a record amount of support among all Community funded energy projects.

“The decision to allocate funding is also an expression  of the European solidarity with the Baltic States and a confirmation that the integration of the Baltic States’ energy systems into the common European electricity grid system is the most important energy project not only for us, but also for the whole of Europe. We are grateful for the trust shown, we feel a great responsibility together with our partners and we really work together to ensure that the synchronisation is implemented smoothly and on time. Preparations are already underway for the Harmony Link project, we have announced the purchase of synchronous compensators, so we are doing everything in our power to ensure that this mega project moves smoothly forward and through COVID,” Daivis Virbickas, CEO of Litgrid says.

“We have been very successful in mobilizing European Union funds and have secured a maximum grant rate of 75% from the European Commission, both in the recent and in the previous call. We can now turn our attention to the realization of investments in order to be ready for synchronisation by the end of 2025, as previously planned,” Taavi Veskimägi, CEO of Elering says.

“The fact that not only in the first phase, but also in the second phase of the synchronisation's project has received the maximum possible co-financing - 75% - shows that this project is important not only for the Baltic region but also for the whole of Europe. It will increase the energy security of our region. The prepared application for funding is a successful cooperation of all three Baltic states together with Poland,” said Varis Boks, CEO of AST.

A total of 28 applications were received for this year's call for CEF funding for energy projects. The joint application for the second phase of the synchronisation was rated with the highest rate/score of all applications.

At the end of May this year, the application submitted to the CEF by the transmission system operators of the Baltic States and Poland also included more projects for which urgent funding is not currently required. The total amount of projects was € 1.22 billion, and the requested amount of support was € 915 million. The countries are expected to apply for the support for the remaining projects to CEF next year.

The synchronisation project is important for the creation of a common European electricity market, ensuring secure electricity transmission. It will also have the effect of closer economic cooperation.