diff --git a/.env b/.env
index 48fe451a9..73a5f57a6 100644
--- a/.env
+++ b/.env
@@ -27,6 +27,13 @@ DB_PASS=postgrespass
 DB_PORT=5432
 DB_NAME=postgres
 
+## Keycloak  ##
+##############
+KEYCLOAK_DB_VENDOR=POSTGRES
+KEYCLOAK_DB_USER=keycloak
+KEYCLOAK_DB_PASSWORD=keycloak
+KEYCLOAK_DB_NAME=keycloak
+
 ## Local prisma db url
 DATABASE_URL=postgres://postgres:postgrespass@localhost:5432/postgres?schema=api
 
diff --git a/db/init.d/create-keycloak-db.sh b/db/init.d/create-keycloak-db.sh
new file mode 100644
index 000000000..e56909abb
--- /dev/null
+++ b/db/init.d/create-keycloak-db.sh
@@ -0,0 +1,9 @@
+#!/bin/bash
+
+set -e
+set -u
+
+psql -v ON_ERROR_STOP=1 --username "$POSTGRES_USER" <<-EOSQL
+    CREATE USER keycloak WITH PASSWORD 'keycloak';
+    CREATE DATABASE keycloak;
+    GRANT ALL PRIVILEGES ON DATABASE keycloak TO keycloak;
\ No newline at end of file
diff --git a/db/init.d/init.sql b/db/init.d/init.sql
index 793a0612c..4ea7b3f52 100644
--- a/db/init.d/init.sql
+++ b/db/init.d/init.sql
@@ -2,3 +2,4 @@
 \set ON_ERROR_STOP on
 
 CREATE SCHEMA "api";
+CREATE SCHEMA "public";
\ No newline at end of file
diff --git a/docker-compose.yml b/docker-compose.yml
index 73f5a4ea1..e1a1631c3 100644
--- a/docker-compose.yml
+++ b/docker-compose.yml
@@ -51,7 +51,7 @@ services:
     restart: 'no'
     environment:
       DATABASE_URL: postgres://${DB_USER?}:${DB_PASS?}@${DB_HOST?}:${DB_PORT?}/${DB_NAME?}?schema=api
-    entrypoint: ["sh", "-c", "sleep 5 && yarn prisma migrate deploy"]
+    entrypoint: ['sh', '-c', 'sleep 5 && yarn prisma migrate deploy']
     depends_on:
       - pg-db
     networks:
@@ -65,7 +65,7 @@ services:
     restart: 'no'
     environment:
       DATABASE_URL: postgres://${DB_USER?}:${DB_PASS?}@${DB_HOST?}:${DB_PORT?}/${DB_NAME?}?schema=api
-    entrypoint: ["sh", "-c", "sleep 15 && yarn prisma generate && yarn prisma db seed"]
+    entrypoint: ['sh', '-c', 'sleep 15 && yarn prisma generate && yarn prisma db seed']
     depends_on:
       - pg-db
     networks:
@@ -81,8 +81,9 @@ services:
     restart: always
 
     volumes:
-      - pg-db-data:/bitnami/postgresql
-
+      # Keycloak creates it's own /data and /conf folders
+      - keycloak-db-data:/var/lib/keycloak
+      - pg-db-data:/var/lib/postgresql/data
     ports:
       - '${DB_PORT?}:5432'
 
@@ -95,7 +96,6 @@ services:
 
     networks:
       - backend-net
-
   ########################################
   ## LOCAL IDENTITY PROVIDER - KEYCLOAK ##
   ########################################
@@ -108,22 +108,27 @@ services:
     profiles: ['local-keycloak']
     restart: always
     environment:
-      - KEYCLOAK_USER=${KEYCLOAK_PASSWORD}
-      - KEYCLOAK_PASSWORD=${KEYCLOAK_PASSWORD}
+      - KEYCLOAK_USER=${KEYCLOAK_USER?}
+      - KEYCLOAK_PASSWORD=${KEYCLOAK_PASSWORD?}
       - JAVA_OPTS_APPEND=-Dkeycloak.profile.feature.token_exchange=enabled -Dkeycloak.profile.feature.admin_fine_grained_authz=enabled
       - KEYCLOAK_IMPORT=/opt/jboss/keycloak/config/keycloak-webapp-realm.json
       - DEBUG=true
       - DEBUG_PORT='*:8787'
-      - DB_VENDOR=H2
-      - TZ=Europe/Sofia
+      - DB_VENDOR=${KEYCLOAK_DB_VENDOR?}
+      - DB_USER=${KEYCLOAK_DB_USER?}
+      - DB_PASSWORD=${KEYCLOAK_DB_PASSWORD?}
+      - DB_ADDR=${COMPOSE_PROJECT_NAME?}-pg-db
+      - DB_DATABASE=${KEYCLOAK_DB_NAME?}
     ports:
       - '8180:8080'
       - '8787:8787'
     volumes:
       - './manifests/keycloak/theme_podkrepi:/opt/jboss/keycloak/themes/theme_podkrepi'
       - './manifests/keycloak/config:/opt/jboss/keycloak/config'
+    depends_on:
+      - pg-db
     networks:
-      backend-net:
+      - backend-net
 
   # ## KEYCLOAK CONFIGURATOR - removes the need to recreate keycloak container upon config changes
   # ## uncomment if you plan to tune the keycloak realm configuration
@@ -147,6 +152,7 @@ services:
   #     backend-net:
 volumes:
   pg-db-data:
+    driver: local
   keycloak-db-data:
     driver: local