Croatian engineering group KONČAR has secured a €370 million financing package to accelerate the expansion of its manufacturing capacity for transformers, switchgear and other critical electricity grid equipment, reinforcing Europe’s efforts to strengthen electricity networks and meet the growing demands of electrification and renewable energy integration.
The financing combines €320 million from international financial institutions and Croatian banks with €50 million of KONČAR’s own capital, making it one of the largest investment programmes in the company’s history. The package includes €120 million each from the European Bank for Reconstruction and Development (EBRD) and the International Finance Corporation (IFC), while Privredna banka Zagreb (PBZ) and Zagrebačka banka are each contributing €40 million.
The investment will fund the expansion of production facilities, the purchase of advanced manufacturing equipment, increased research and development capabilities, and improvements in energy efficiency across the group’s operations.
Responding to Europe’s Growing Grid Investment Challenge
The announcement comes as European electricity networks face mounting pressure from the rapid deployment of renewable energy, electrification of transport and industry, and the replacement of ageing transmission and distribution infrastructure.
Demand for high-voltage transformers, substations, switchgear and digital grid technologies has risen sharply across Europe, with manufacturers struggling to keep pace as utilities accelerate grid reinforcement projects.
By expanding its manufacturing footprint, KONČAR aims to increase production of equipment essential for transmission and distribution system operators, renewable energy developers and industrial customers modernising electricity infrastructure.
The company said the investment will significantly strengthen its manufacturing capabilities at a time when secure European supply chains for critical grid equipment have become an increasingly strategic priority.
Largest Investment Programme in KONČAR’s History
The €370 million financing forms part of an even larger investment strategy.
KONČAR plans to invest €550 million over the next three years to expand manufacturing capacity, develop new technologies and strengthen its engineering capabilities.
When combined with separate investments being undertaken alongside its long-standing strategic partner Siemens Energy to expand power transformer production, the total value of planned investments exceeds €800 million.
The programme reflects the sustained increase in demand for grid infrastructure across European markets, where long lead times for transformers and other critical equipment have become a major constraint on renewable energy projects and grid expansion.
International Backing for Industrial Growth
The financing agreement was signed at KONČAR’s headquarters in Zagreb by representatives of the company, the EBRD, IFC, PBZ and Zagrebačka banka.
For the EBRD, the transaction represents the beginning of a strategic partnership with one of Croatia’s largest industrial exporters.
Frederic Lucenet, Global Head of Manufacturing and Services at the EBRD, told DMVR/The Voice of Renewables that the project demonstrates how industrial investment can directly support Europe’s energy transition by expanding the production of critical electricity infrastructure, strengthening supply chains and enabling greater renewable energy integration.
Miljan Ždrale, EBRD Regional Director for Central Europe, described the investment as a reflection of the bank’s commitment to supporting Croatia’s green transition, improving the competitiveness of export-oriented manufacturers and accelerating electricity grid modernisation across Europe.
The IFC also highlighted the strategic importance of increasing European manufacturing capacity for transformers and other specialist electrical equipment.
According to IFC Division Director for Europe Ines Rocha, the investment will strengthen Croatia’s industrial competitiveness through advanced manufacturing, innovation and the creation of skilled jobs while supporting Europe’s long-term energy resilience.
Strengthening Croatia’s Industrial Base
For KONČAR, the financing represents a significant endorsement of its long-term growth strategy.
President of the Management Board Gordan Kolak told DMVR that the support from international development institutions and Croatia’s leading banks confirms the company’s growing role as an industrial and technological partner in Europe’s energy transition.
Chief Financial Officer Mario Radaković added that the financing validates KONČAR’s commitment to sustainability, corporate governance, financial transparency and operational stability while providing the foundation for the company’s largest-ever investment cycle.
The project is also expected to strengthen Croatia’s industrial sector by expanding domestic manufacturing capacity, increasing exports and creating new employment opportunities.
Alongside production investments, the programme includes initiatives to support workforce development through vocational training, education partnerships and cooperation with technical universities and schools.
Strategic Importance for Europe’s Energy Transition
The investment reflects a broader shift in European energy policy, where expanding manufacturing capacity for grid infrastructure is increasingly viewed as essential to achieving decarbonisation targets.
While renewable generation continues to grow rapidly, many projects remain constrained by shortages of transformers, switchgear and other electrical equipment required to connect new capacity to the grid.
By increasing domestic production of these components, KONČAR aims to help reduce supply bottlenecks, improve the resilience of European electricity infrastructure and support the continent’s accelerating investment in transmission and distribution networks.
As Europe enters a period of unprecedented grid expansion, manufacturers capable of delivering specialised electrical equipment at scale are becoming increasingly important strategic partners in the continent’s transition towards a more electrified, secure and low-carbon energy system.
