The European Commission and the European Investment Bank have approved a €2.3 billion ($2.67 billion) Islands Decarbonization Fund specifically for Greece, aimed at financing electricity interconnections, clean energy, storage and electric mobility projects on the country's islands, local media reported on September 2.

Greece's Ministry of Environment and Energy said the approved investment plan includes projects totaling about €2.3 billion, financed through the EU Emissions Trading System. Resources are currently estimated at approximately €2 billion, depending on emission allowance price movements.

Around €1.1 billion will go to electricity interconnections in the Dodecanese, Cyclades and northeastern Aegean islands. Greece's transmission operator said last week that the interconnection between the mainland and Kos has entered construction, with a contract for the design, supply and installation of the high-voltage direct current (HVDC) cable system between Corinth, on the mainland, and Kos to Fulgor, a subsidiary of leading European cable producer Hellenic Cables.

A further €977 million is allocated to renewable energy and storage projects, with emphasis on self-consumption PV systems at homes, hotels, restaurants, schools, hospitals and agricultural facilities. Another €200 million will fund multipurpose dams and reservoirs, and €56 million will go to electric vehicle charging infrastructure.

The ministry said the investments would reduce the islands' carbon footprint and strengthen energy autonomy. Many Greek islands still rely on diesel-fired generation, with costs shared among electricity consumers nationwide. Combining interconnections with island-based renewables and storage can reduce oil-fired plant operation and improve system flexibility.

Greece has already implemented clean energy projects on several islands, including a hybrid solar-wind-storage plant on Tilos and a net-metering PV system on Halki. The Islands Decarbonization Fund will determine which models are prioritized to deliver lasting reductions in fossil fuel consumption.