The Modernisation Fund: A Structural Blind Spot in EU Climate Policy

The Modernisation Fund is often treated as a technical financing tool. In reality, it is one of the most structural instruments in EU climate policy.

In this episode, Marine Cornelis speaks with Morgan Henley, campaigner at CEE Bankwatch, about how the Modernisation Fund shapes energy systems in Central and Eastern Europe. Drawing on concrete examples from district heating, the conversation shows how funding design and governance choices lock in infrastructure pathways for decades.

The episode examines why the Fund’s low political visibility enables priority drift, how limited scrutiny reinforces incumbent interests, and why these dynamics matter most in countries with constrained fiscal space. Rather than focusing on technologies, the discussion centres on power, accountability, and the long-term consequences of how climate money flows.

This is a conversation about why climate credibility is built through governance, not announcements.

Topics covered

• The Modernisation Fund as a structural EU instrument

• Governance gaps and low political visibility

• Priority drift and incumbent advantage

• District heating as a long-term system choice

• Why funding design determines transition outcomes

CEE Bankwatch report on the Modernisation Fund (2026)

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Music: I Need You Here - Kamarius
Edition: Podcast Media Factory 

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