Why CEE is one of most attractive regions for investment in new energy projects
Munir Hassan and Thomas Hamerl, partners in CMS’s world-leading energy practice, discussed the most significant developments in the renewable energy market for 2026 with Balkan Green Energy News.
There is great potential for early movers in the segments of battery storage and ancillary services, according to Munir Hassan, global head of the energy and climate change at CMS (London), and Thomas Hamerl, regional head of energy and climate change at CMS Vienna.
Interconnection and interoperability with the EU’s electricity market will enhance the region’s value for established producers and increase its attractiveness for new investors, they told Balkan Green Energy News.
Beyond grid availability and tariffs, potential investors in renewables and storage focus on the target country’s policy direction and the scalability of projects, Hassan and Hamerl explained.
Investors need advisors who are familiar with international contracts and can navigate local energy markets
Potential investors in renewables and storage do not just look for efficient support with time-sensitive grid availability and network tariffs. They appreciate legal advisors who are familiar with international contracts and can also navigate local energy markets. The current policy direction of the target country and the scalability of projects are more interesting than ever, Hassan and Hamerl asserted.
CMS’s regional footprint and its global network enable it to share expertise across jurisdictions, and its local teams contribute to regulatory initiatives. With over 70 offices worldwide, including 17 offices in CEE region, CMS supports renewable energy developers and investors. The global law firm follows policy developments that are shifting from saturated markets to the CEE region, with the aim of applying best practices and overcoming challenges and bottlenecks beforehand.
Speaking to Balkan Green Energy News, Hassan and Hamerl said companies should ride the investment wave and use opportunities as legal frameworks in Southeast Europe and the wider CEE region are advancing rapidly and opening new market segments.
At CMS’s traditional annual CEE Energy Conference (CEE Energy Conference 2025), held in London in October 2025, most investors were seriously considering to add energy storage to power plants and PPAs for industrial customers.
Data center projects are adding to demand growth in green electricity
Hassan pointed to digital infrastructure as the main driver of demand, even more in SEE than the rest of the CEE region, alongside the decommissioning of coal and gas-fired power plants.
Things are starting to move with data center projects in Slovenia, Croatia and Austria, for example, Hamerl stressed.
“Usually, data center developers are international and well-experienced, bringing technical and commercial know-how. These need not be only global hyperscalers such as Amazon, Google and Microsoft. Smaller data centre operators and telecom companies are strengthening their presence in CEE. They may all seek out the expertise and networks of local infrastructure developers,” he added.
CMS is involved in major projects throughout Southeast Europe
The changes are spurring the need for more resilience in the energy sphere and national sources. It is one of the factors behind the nuclear energy program in Poland, for shielding against geopolitical shocks, according to Hassan.
There are also nuclear power projects in Romania, including an advanced one for a small modular reactor (SMR) system, and Bulgaria, and CMS is involved in all of them. It has also contributed to deals for the giant Vifor wind power endeavor in Romania. Slovenia and Serbia are next.
Financing through debt could contribute to nuclear energy and interconnector projects
Hassan said there is a notable appetite for debt financing in CEE and suggested that the model could contribute to nuclear projects including the ones for SMRs.
“Another relevant development that we see is the development of electricity networks and even interconnectors. There’s a lot of private capital that’s looking to build electricity grids in Southeast Europe and Central and Eastern Europe. But the regimes there are designed for the existing system operators to develop these projects. The difficulty, like here in the UK and other parts of the world, is that they are unable to deliver the infrastructure quickly because they don’t have the resources and financial capability,” he asserted.
Western Europe is comfortable with the idea that private companies can own and run such assets, Hassan underscored and added that transmission upgrades in general could be financed the same way. But TSOs would typically take ownership of transmission system infrastructure including interconnectors.
EU funds would have better effect as loan guarantees
Among the investment appeal factors in CEE, Hassan highlighted the grants via the European Union’s Modernization Fund and Recovery and Resilience Facility (RRF).
“Those sorts of funds are very, very important. I think the governments need to find smart ways of effectively using that money to help create conditions in which you can get private international investment into the region, rather than simply as grant funding. If you give it as a way of, let’s say, underwriting debt, in case there’s a risk issue, that’s a better way, that kind of multiplier effect,” he stressed.
Knowhow for navigating legal frameworks in emerging market segments in CEE
The United Kingdom and other parts of Western Europe are experiencing growth of the markets for new system support services. Southeast Europe and Central and Eastern Europe may follow soon. For instance, Austria is about to introduce a capacity market. Serbia is rolling out an ancillary services market in January 2026, enabling a potential revenue stream for standalone battery energy storage systems (BESS).
“It’s not a mature market yet, but market entrants with the required experience and knowhow, will find a lot of possibilities in the region. If you want to be a first mover or an early mover, you must go there now,” said Hamerl. He added it is an opportunity for battery storage, to support the grid through the flexibility market or frequency restoration and new kinds of services, instead of just arbitrage.
It is much more expensive to expand the power grid than to use energy storage capacity available in the market
Regulatory frameworks are either in place or will very soon be in place, Hamerl noted.
“Batteries play an important role in supporting the grids and saving money because building new grids is always much more expensive than storage capacity in the market. I still see a long way to go for alternatives to batteries,” he said.
The fact is that it takes several years to build a pumped storage hydropower plant, while hydrogen and ammonia production and distribution infrastructure are not sufficiently developed yet.
Photovoltaics, BESS in sharply upward trajectory
Locations for photovoltaics in Southeast Europe are much better than in most parts of Europe, Hamerl underscored, adding that the coastal areas are particularly favorable for wind power.
For instance, experts predict the total operational solar and wind capacity in Montenegro to reach 400 MW by the end of this year. For Croatia, RES generation capacity is expected to increase from 4.7 GW in 2025 to almost 12 GW by 2040.
In Bulgaria, PV capacity jumped fivefold since 2019, to 5 GW, the law firm pointed out and emphasized the surge in both co-located and standalone BESS as well. Forecasts see the segment, currently at 600 MW, to hit 5 GW by the middle of 2026.
CMS Sofia has advised on more than 50% of all installed renewable energy capacities in Bulgaria. One of the clients, Renalfa IPP, has an investment program worth EUR 1.2 billion, involving 1.6 GW in electricity generation assets and 3.3 GWh of battery storage in Bulgaria, Romania, Hungary and North Macedonia.
CMS helping optimize regulations to suit governments as well as investors
There are obviously differences in every country of Central and Eastern Europe, but there are similarities drawing investors into the region, according to Hassan.
“They want to see the revenue risk is dealt with, the technical risks are dealt with, the political risk is kind of dealt with, et cetera. So our job as lawyers is to help people understand the frameworks, but also our local teams are helping to design some of these frameworks. To that extent, we can try and design them upfront in a way that achieves not only what the countries want, the governments want, but also what the international investors will be looking for,” he asserted.
The most important factors for investors are a clear direction of law making and scalability
In his view, the most important factors are a clear direction of lawmaking and regulation – strong policy backing, and scalability, in the sense that a company can do many more projects on the back of the first one.
Hamerl said that the waiting time for grid connection remains one of the most important elements, together with network charges. Investors seek stable grid fees or at least clarity about the pace and way of growth, he stressed.
“They are always asking us about the stability of the grid and the grid usage charges. However, in some markets there is a diversity of federal, provincial, and local laws requiring different permits. Investors ask themselves in which province it is possible to obtain permits in time. Zoning and spatial planning is crucial too. For most of our clients, it’s nice to get subsidies, but those other issues are more important,” Hamerl asserted.
