Romania and Bulgaria are developing a major grid-modernisation project designed for the electricity system they are rapidly creating rather than the one they inherited. CARMEN—Romanian and Bulgarian Smart Grid Assets Increasing RES and Interconnection within South-East Europe—has a total budget of almost €208 million, with around half expected to come from European grants.
The project brings together Bulgaria’s Electricity System Operator, Romania’s transmission system operator Transelectrica and Romanian distribution company Delgaz Grid. Bulgaria’s share of the investment exceeds €59 million, including approximately €29 million in funding from the Connecting Europe Facility. Implementation is scheduled to continue through 2032.
CARMEN is not simply another cross-border interconnector. Instead, it represents a coordinated package of substation reconstruction, automation, telecommunications and control-system upgrades aimed at increasing the usable capacity and visibility of the existing electricity network. In Bulgaria, the work includes substations such as Dobrudzha, Varna, Gorna Oryahovitsa, Mizia and Balkan. More than 1,100 kilometres of optical telecommunications infrastructure are also planned along overhead lines, including the 400 kV Druzhba and Saedinenie interconnectors with Romania.
That distinction is increasingly important because Southeast Europe’s grid challenges cannot be addressed solely by constructing additional transmission lines. Renewable generation is geographically dispersed and can change rapidly depending on weather conditions. Real-time data, automated controls and coordinated remedial actions are becoming essential for using existing infrastructure safely and efficiently. In some cases, digitalisation can unlock additional network capacity faster and at lower cost than conventional grid expansion.
CARMEN’s geographical focus is also strategic. Northeastern Bulgaria and southeastern Romania have significant wind and solar potential, while the wider north-south electricity corridor connects renewable-rich areas with major demand centres and neighbouring markets. Increasing the controllability and visibility of the network could help reduce renewable curtailment, strengthen cross-border electricity trading and support future green-hydrogen development.
The project also illustrates the growing operational connection between transmission and distribution networks. Rooftop solar, batteries, electric vehicles and flexible industrial consumers are largely connected at the distribution level, but their combined behaviour increasingly influences national balancing and cross-border electricity flows. Delgaz Grid’s involvement reflects the reality that a smart transmission system cannot operate efficiently without an intelligent distribution layer.
The wider investment environment reinforces this trend. In July 2026, the EBRD separately provided Delgaz Grid with a RON 300 million loan, equivalent to around €57 million, to support its 2026–2030 electricity-network investment programme, including modernisation, digitalisation and smart-meter deployment. The financing is separate from CARMEN’s €208 million budget, but both projects contribute to the same broader transformation of the regional electricity system.
Implementation will nevertheless present challenges. Digital infrastructure requires interoperable systems, strong cybersecurity, skilled personnel and disciplined procurement. Installing sensors has limited value if operators cannot exchange the resulting data or incorporate it into real-time capacity calculations. Cross-border projects also face the risk of asynchronous implementation, where one country completes its infrastructure before the corresponding systems in the neighbouring country are ready.
If successfully implemented, CARMEN could demonstrate that the value of a modern electricity grid is not measured only by the number of kilometres of new transmission lines. Better information, automation and control can allow existing infrastructure to accommodate more renewable electricity, manage contingencies and facilitate cross-border trade.
For Southeast Europe, where permitting and constructing major new transmission infrastructure can take many years, improving the performance of the network already in place could prove just as important as building new lines.
