The European Bank for Reconstruction and Development (EBRD) said on October 22 it will invest €16.8mn in Croatia’s first large-scale battery energy storage system and virtual power plant, taking its first equity stake in a standalone merchant storage project.

The EBRD’s direct equity investment will go to IE-Energy Projekt, a newly established joint-stock company developing the greenfield battery energy storage system (BESS) and virtual power plant (VPP) in the coastal city of Šibenik. The project is expected to provide up to 60 megawatts of flexible capacity, helping to stabilise the national grid and support the integration of renewable energy sources.

Croatian pension funds managed by Raiffeisen will match the EBRD’s contribution with an equivalent €16.8mn investment, while an additional €16.5mn grant will come from the EU Modernisation Fund, the bank said.

The facility will enable real-time balancing of electricity supply and demand through the deployment of a digital VPP platform, enhancing Croatia’s grid flexibility as it expands its solar and wind power capacity.

“This investment marks a milestone in Croatia’s green transition,” said Miljan Ždrale, EBRD director for Central Europe. “It supports the deployment of next-generation energy infrastructure and strengthens the resilience of the national grid, opening the door for more clean energy sources.”

The EBRD said the project will contribute to Croatia’s goals of decarbonisation and energy independence by reducing reliance on fossil fuels and improving energy system stability amid rising renewable generation.

The EBRD has invested more than €5bn in 273 projects in Croatia to date, focusing on supporting reforms, leveraging EU membership benefits, and modernising public-sector enterprises.