EBRD Finances Hungary’s 450MW Solar-Plus-Storage Project in Landmark Deal

In a significant move for Central and Eastern Europe’s renewable energy landscape, the European Bank for Reconstruction and Development (EBRD) has committed to financing a pioneering 450MW solar-plus-storage project in Hungary. The deal represents a major step forward in integrating large-scale renewables with energy storage to enhance grid stability and marks the EBRD’s first energy project financing in the country in over a decade.

The Szihalom Project: A Key Hungary solar storage project

The project, developed by Renalfa IPP, is located in Szihalom in north-eastern Hungary. Currently under construction, it pairs a substantial 450MW solar PV plant with a 250MW/1GWh battery energy storage system (BESS). This combination is set to become one of Hungary’s largest renewable energy developments and is expected to be fully operational later this year.

The financing structure is as notable as the project’s technical specifications. The EBRD is providing €70 million (US$82 million) as part of a larger €210 million financing package arranged with commercial banks. This investment is not only the EBRD’s first in Hungary’s energy sector since 2010 but also its first financing for a hybrid renewable asset in the entire Central and Eastern European region, signaling strong confidence in the model.

A Merchant Model for a Modern Grid

A key aspect of the Szihalom project is its market strategy. All electricity generated will be sold directly on the Hungarian power market. This merchant-based approach is a bold move, as the project will operate without the safety net of government subsidies or long-term corporate power purchase agreements (PPAs).

This strategy underscores the growing economic viability of solar-plus-storage. By leveraging the BESS, the plant can store energy when generation is high and prices are low, then dispatch it to the grid during peak demand hours when prices are higher. As Renalfa IPP CEO Ivo Prokopiev noted, this capability allows the project to offer “green baseload products and grid flexibility services,” addressing the critical challenge of intermittency associated with renewable sources.

Addressing the Integration Challenge

The Szihalom project arrives at a crucial time for the energy transition. As renewable capacity grows globally, the industry’s focus is shifting from simply building generation assets to effectively integrating them into the grid. Large-scale projects like this one, which co-locate generation with massive storage capacity, are essential for managing grid risks and ensuring a reliable supply of clean energy.

By providing both power and essential ancillary services, the Szihalom plant will play a vital role in balancing the Hungarian grid. This landmark deal financed by the EBRD not only accelerates Hungary’s green transition but also establishes a powerful, replicable model for developing subsidy-free, hybrid renewable energy projects across the region.