Sustainable Finance

Iberdrola Signs €550 Million Green Loan With EIB to Increase Spain's Renewable Energy Production

Published on: 23 July 2022 08:55 AM
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Almost 1,800 MW of wind farms and photovoltaic parks will be constructed on various sites, primarily in rural areas. The new facilities will generate enough clean energy to meet the annual needs of almost one million households. The initiative will have a substantial impact, contributing to the EU's energy supply security, climate action, and social cohesion.

Iberdrola and the European Investment Bank (EIB) have inked a new deal to expedite Spain's energy transition through developing new renewable power. The EU Bank will grant a green loan of €550 million to build a portfolio of projects with a total capacity of approximately 1,800 megawatts (MW). 

These facilities will provide environmentally friendly and cost-effective energy equal to the average annual usage of about one million households. The overall investment in wind farms will exceed 1,100,000,000 euros.

The new infrastructure will generate approximately 2,100 jobs per year during the construction period. 

The European Investment Bank (EIB) will finance solar facilities and wind farms in several Spanish municipalities, mostly in rural parts of Castilla y León and Extremadura, regions designated by the European Union as cohesion regions.

 A portion of the funds will be allocated to projects including the 200 MW Tagus and 80 MW Almaraz photovoltaic facilities in Extremadura and the 50 MW Valdemoro wind farm in Castilla y León. These investments will not only increase the production of sustainable energy but will also enhance supply security.

EIB Vice-President Ricardo Mourinho Félix said: 

"The new green loan signed with Iberdrola enables us to step up our contribution to making Spain a country with increased renewable capacity, a key factor for Europe to achieve its climate targets. As the EU Bank, we continue to support projects in line with our 'Climate Roadmap', while at the same time boosting Europe's security of energy supply in the current sensitive context. We are pleased to support Iberdrola in projects that will generate economic growth and jobs in the cohesion regions".

Iberdrola's CEO, Ignacio Galán, explained that: 

"This financing agreement, which further strengthens our cooperation with the EIB, is a new boost for our projects in Spain at an important time when we need to speed up the energy transition and reduce our dependence on fossil fuels. The financing signed with the EIB is also in line with Iberdrola's commitment to a sustainable energy model that will enable the transition to a low-carbon economy."

This project contributes to the EU's goal of reaching 32 per cent of energy from renewable sources in gross final energy consumption by 2030, as outlined in the EU's new RES (Renewable Energy Sources) Directive, which the European Commission recently suggested boosting to 45 per cent. In addition, it promotes the attainment of the 42 per cent renewable energy targets stated for Spain in the National Integrated Energy and Climate Plan (PNIEC) 2021-2030.

As the loan is 100 per cent eligible within the climate action/renewable energy framework (as it is earmarked for onshore wind and solar photovoltaic projects), the operation can be categorised as an EIB Green Loan. This is a form of financing that meets all of the standards outlined by the EIB's Climate Awareness Bonds (CAB) programme. Therefore, the transaction qualifies for allocation to its portfolio of lending activities financed by the issuance of CABs.

Source: Iberdrola

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