Understanding Europe’s Infrastructure Manufacturing Shift Through Croatia’s KPT2 Project: New Links to Electronic Component Demand

In recent years, infrastructure development in Europe has been shifting toward local manufacturing, sustainability, and system-level integration. As green energy, smart grids, and cross-border interconnectivity become critical priorities, the alignment between manufacturing and project execution is becoming increasingly tight. This shift not only reshapes equipment deployment models but also redefines how components are selected and supported across systems.

On July 28, 2025, Siemens Energy announced an €80 million investment in Croatia to launch a manufacturing project named KPT2. This joint venture with local power equipment firm Končar-Energetski transformatori will establish a modern transformer manufacturing facility near Zagreb, accompanied by a co-located R&D center.

According to the plan, the factory will deliver its first transformer in Q4 2026, with an expected annual output of 2,000 units. More than 60% of these units will support grid modernization efforts in Central and Eastern Europe (CEE) and the Balkan region. KPT2 represents not just capacity expansion, but a localized engineering-focused manufacturing model with broader implications for the European infrastructure and energy equipment sector.

Q1: What makes the KPT2 project different?

Rather than replicating a standard production facility, KPT2 exemplifies an embedded, region-specific manufacturing strategy tailored to project needs. Its defining features include:

Integrated R&D: A dedicated development center focused on equipment adapted to Mediterranean climates and regional power specifications;

Local service orientation: Over 60% of production is targeted at grid upgrades in CEE countries;

Technology transfer: Croatian engineers will undergo training at Siemens Germany, enabling local absorption of key processes.

This isn’t about low-cost outsourcing. It’s a project-driven deployment model emphasizing regional responsiveness, regulatory alignment, and co-engineering.

Q2: Why should the electronics industry care about a transformer project?

Because power system upgrades involve much more than replacing core equipment—they demand the integration of control, protection, communication, and energy conversion systems. Electronic components play a vital role across these interconnected systems.

For example:

Monitoring & protection modules: Hall-effect current sensors (e.g., LEM HLSR), voltage sampling ICs, isolation amplifiers (e.g., TI ISO124);

Power and switching systems: Solid-state relays (e.g., Panasonic AQ-H series), high-voltage MOSFETs, power management ICs;

Communication and signaling: Industrial-grade optocouplers (e.g., Vishay 6N137), CAN/LIN drivers, fiber-optic transceivers;

Connectivity and EMC compliance: Heavy-duty connectors (e.g., Harting Han series), DIN rail terminals, EMI filters.

These components aren’t typically purchased directly by transformer manufacturers. Instead, they are procured through EPC contractors, system integrators, or industrial OEMs—embedded within the broader system. Demand for electronic parts thus emerges indirectly and incrementally, following the engineering lifecycle of each project.

Q3: How do projects like KPT2 influence component selection and procurement?

Projects like KPT2 bring forward three clear trends impacting component sourcing strategies:

Specification-first sourcing
Engineers now ask: “Is this REACH compliant? Is there a VDE test report? Can you ensure 5+ years of supply continuity?” Basic datasheets are no longer enough—buyers demand full documentation, certification, and lifecycle guarantees.

De-risking of uncertified or aging components
Components with ambiguous certification boundaries, unclear longevity, or lack of traceable records are being replaced by parts with lifecycle transparency and project-ready documentation. Brands like ST, Infineon, and Vishay are increasingly favored due to ecosystem reliability.

System-level support is the new entry barrier
Price and basic specs alone aren’t sufficient. Vendors must demonstrate their ability to provide documentation packages, condition-specific validation, European standard alignment, and responsive support tailored to engineering use cases.

If you’re supporting projects involving power cabinets, remote monitoring units, or substation communications, now is the time to review your BOMs. Watch for components that:

Have uncertain certification;

Lack documented lifecycle visibility;

Were chosen primarily for cost competitiveness but lack engineering support.

Q4: What should component vendors focus on now?

KPT2-type projects don’t change your current orders—but they do shape future standards. The next wave of engineering bids will reflect the values and requirements such initiatives help define.

Proactively assess:

Do your key components support 10-year lifecycle commitments?

Are your older part numbers missing updated certification documentation?

Can you offer a reference BOM that aligns with emerging project standards (EMC, anti-aging, regional compliance, etc.)?

Quick-read checklist:

Conclusion

KPT2 is not just a manufacturing initiative—it’s a harbinger of how future infrastructure projects will define and filter component ecosystems.

Customers are no longer buying parts in isolation; they’re selecting solutions that can support long-term system stability, regional compliance, and certification traceability. Component suppliers capable of delivering lifecycle clarity, robust documentation, engineering engagement, and agile support will be the ones invited into the next generation of infrastructure tenders.

Now is the time to evolve—from selling parts to enabling systems.