In Amari, a Cretan municipality south of Rethymno, the history, culture, and economy are intertwined with its fertile valley. Surrounded by the mountains of Kentros, Samitos and the Psiloritis, Amari valley is home to groves of ancient olive trees, cherries, plumes, and apricots—crops that have sustained local livelihoods for generations.
But, recurring droughts, intensified by climate change, now threaten the region’s agriculture and the well-being of its residents.
To address this challenge, the municipality intends to use the Platys river that flows through the valley. The Greek Ministry of Transport and Infrastructure plans to build a dam with a reservoir capacity of 21 million cubic metres , an irrigation network extending over 4,350 hectares, and close 20 kilometre of pipes. This aims to improve the irrigation in the Rethymno and Heraklion prefectures, regions that form the heart of the island's agricultural production.
“The construction of the dam is a necessary response to the ever-worsening problem of water sufficiency, especially with the severe drought caused by climate change,” says Pantelis Mourtzanos, the mayor of Amari who played a key role in developing the project. “The new reservoir will allow efficient management of water resources, ensuring a steady supply of water for crop irrigation.”
The European Investment Bank and the Council of Europe Development Bank each committed €80 million to support the significant new investment in Crete, signed in January 2024.
"Climate-related risks pose significant threats to economic stability and social well-being," says Georgia Kastranta, director of flood Protection and irrigation at the Ministry of Transport and Infrastructure. "This project will boost the sustainability of Crete's agricultural sector, stimulate economic growth, and help mitigate the adverse effects of climate change."
A growing issue
Over the past decade, Crete has seen a sharp drop in rainfall and an increase in extreme droughts. In 2023, rainfall fell to only 40% of normal levels, and early 2024 has seen a similar lack of rain. Meanwhile, in the same year, the average temperature increased by 0.5 degrees Celsius compared to 1991-2020. The decrease in water availability, rising temperatures, and desertification signal that the climate crisis is already affecting the island.
This has severe consequences for the island's residents, impacting the quality of life and critical sectors, such as tourism and agriculture. Faistos, located in the Messara plain south of Heraklion, is among the municipalities feeling the impact. There, hundreds of fields grow a variety of fruits and vegetables for export across Europe, serving as a key source of income and livelihood for residents.
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"The weather has always been unpredictable, but in the last five years, it has become so intense that it is starting to scare us,” says Grigoris Nikolidakis, the mayor of Faistos, who was born into a farming family and is committed to improving the community he grew up in. “If we don’t take action, the water we have will not be enough sufficient water for our citizens.”
Crete is also suffering an increase in severe flooding. In 2019, the island endured a catastrophic flood when it experienced more rainfall in just 10 minutes than in the previous three years combined. Such extreme weather events are becoming an annual occurrence.
“The phenomenon has developed in the last ten years, and it seems to intensify,” says Nikolidakis.
Supporting climate mitigation
Experts predict that storms will be 30 times more destructive over the next 30 years, putting the region at significant risk of flash floods. Rising temperatures are also expected to cause more frequent and severe droughts.
More funding and detailed planning are essential, if Crete is to construct resilient infrastructure that can endure this new, extreme weather. The upgrade in the water irrigation network in the area includes financing for the construction of an 18.6-kilometre transfer line from the reservoir to the currently overexploited aquifer in the Messara, an agricultural plain close to Faistos. The European Investment Bank and the Council of Europe Development Bank provided the expertise to guarantee the project’s socio-economic viability and environmental sustainability.
“The funding allows provides the stability and reliability required for such a large project, says Mourtzanos. “It allows for the immediate commencement of construction, contributing to the development of the local economy and the utilization of the area's natural resources.
This initiative will support less developed and transitional areas in Crete, attracting new investment to a region where per capita income is below the European Union average and with a severe risk of depopulation, especially among youth.
“We support the livelihood of the population in the areas surrounding the reservoirs, where agricultural activity is weakening,” says Despina Tomadaki, a principal advisor in the lending operations department at the European Investment Bank responsible for the financing of public sector corporates in Greece.
More olives, greener Crete
The project will help cut greenhouse emissions by increasing the number and water management of olive trees and by decreasing the energy used to pump groundwater into the fields. The reduction in water use will lower the cost of farming and sustain agricultural production.
“Growing olive trees is a very efficient way to capture carbon and help mitigate climate change,” says Josep Oriol Bellot Miana, a senior water and irrigation engineer at the European Investment Bank who worked on the project. “By using solar energy and collecting rainwater in reservoirs, we can cut down on the energy needed for water pumping, helping farmers and providing wider social benefits.”
The initiative will also help replenish the aquifer to sustainable levels while ensuring a steady water supply. This will create new, permanent jobs in maintaining the infrastructure, providing a much-needed boost to an area grappling with population decline.
