€104M EU Grant Backs First Joint Smart Grid Upgrade

Delgaz Grid, Transelectrica, and ESO lock in EU funding for CARMEN, the first CEF-backed cross-border smart grid project of its kind

2 Jun 2026

Southeastern Europe has its first major grid funding anchor. On May 22, three operators signed the financing agreement for CARMEN (Carpathian Modernized Energy Network) at the European Commission's Energy Infrastructure Forum in Copenhagen, securing €104 million in EU grants under the Connecting Europe Facility. Total project value sits at roughly €207 million.

Romanian distribution operator Delgaz Grid, part of E.ON's network, signed alongside national transmission operator Transelectrica and Bulgaria's ESO. Designated a Project of Common Interest, CARMEN is the first CEF-backed initiative to fund joint transmission and distribution upgrades across two member states at once. That structural first matters: Europe has long struggled to coordinate cross-border grid financing at this level.

The scope targets specific failure points rather than broad ambitions. Engineers will deploy Dynamic Line Rating across high-voltage corridors, install FACTS devices for reactive power management, and embed real-time digital monitoring across distribution infrastructure in six northeastern Romanian counties. Shared data platforms and aligned planning protocols aim to cut congestion on the Romanian-Bulgarian interconnection, releasing capacity that bottlenecks have long held back.

Romania's renewables pipeline is outpacing its grid. Constraints have repeatedly delayed new connections and suppressed cross-border power flows, a tension CARMEN directly addresses. Delgaz Grid Chairman Volker Raffel said the project would increase network capacity to integrate decentralised generation, benefiting producers, prosumers, and consumers on both sides of the border.

Costs are clearly divided. Delgaz Grid leads at €77.5 million total, Transelectrica follows at €70.7 million, and ESO contributes €59.3 million, with EU grants covering roughly half of each partner's commitment.

European Commissioner for Energy Dan Jørgensen attended the signing in person. His presence underlines what the deal already signals: the EU Grids Package has made cross-border infrastructure coordination a legislative priority, and CARMEN gives that agenda a working proof of concept in a region where grid investment has lagged well behind renewable ambition. Three operators are now formally committed, funding is confirmed, and a replicable model for TSO-DSO coordination across European borders may finally be taking shape.