The European Investment Bank (EIB) has agreed to lend Spanish utility Iberdrola €550m to speed up the country’s energy transition. The money will be used to develop renewable energy projects with an investment value of €1.1bn, and an electrical capacity of 1.8GW, or enough to power a million households.
The EIB is the investment bank of the EU, and its money will be concentrated on photovoltaic plants and wind farms in rural areas of Castilla y León and Extremadura, which Brussels classes as relatively poor regions eligible for cohesion funds.
Part of the funding will go to projects such as the 200MW Tagus and 80MW Almaraz solar plants in Extremadura and the 50MW Valdemoro wind farm in Castilla y León.
The funding will create around 2,100 jobs a year during construction, and according to Iberdrola, will make a contribution to the post-Covid recovery of the Spanish economy and help to strengthen energy self-sufficiency in Europe.
Ricardo Mourinho Félix, the EIB’s vice president, said: “The green loan signed with Iberdrola enables us to step up our contribution to making Spain a country with greater renewable capacity, a key factor in helping Europe achieve its climate targets.
“As the EU bank, we are continuing to support projects in line with our Climate Bank Roadmap, while at the same time boosting Europe’s security of energy supply in the current sensitive climate. We are pleased to be supporting Iberdrola in projects that will generate economic growth and jobs in cohesion regions.”
This EU has set a target of generating 32% of its members’ energy from renewable sources by 2030. The European Commission recently proposed to increase this to 45%. For its part, Spain has a target of 42% by 2030.
Ignacio Galán, Iberdrola’s chief executive, said the agreement would give “a new boost to our projects in Spain at an important time when we need to accelerate the energy transition and reduce dependence on fossil fuels.”
In 2014, Iberdrola became the first energy company to issue green bonds. In 2016, the company also underwrote the first green loan in the energy sector, for a total of €500 million. At the end of March 2022, the group had green financing or financing linked to sustainability criteria amounting to more than €41bn.