For the expansion of electricity grids in Spain

EIB and Iberdrola agree on EUR 700 million green loan

BEI e Iberdrola acuerdan un préstamo verde de 700 millones de euros para la expansión de redes eléctricas en España
EIB and Iberdrola agree EUR 700 million green loan for electricity grid expansion in Spain

The European Investment Bank (EIB) has approved a EUR 700 million green loan to expand Iberdrola's electricity distribution network in Spain. The first EUR 500 million tranche of the loan was signed in Madrid by Jean-Christophe Laloux, the EIB's Director General for EU Operations, and José Sainz Armada, Iberdrola's Director of Finance, Control and Corporate Development. 

  1. EIB and energy security 
  2. Electricity grids, a key pillar of the energy transition 
  3. Iberdrola's commitment to sustainable financing and decarbonisation in the country 

The total investment associated with the project will be EUR 1.44 billion, the other EUR 740 million of which will be provided by Iberdrola. The project will contribute to increasing the efficiency and resilience of the electricity distribution grid, facilitate connection, new electrification uses such as heat pumps and electric mobility, and allow more renewable energy sources to be integrated into the grid, thereby accelerating the energy transition and advancing the decarbonisation of the Spanish electricity sector.  

The project will also boost industrialisation and economic and employment growth in Spain by maintaining around 10,000 jobs per year in 12 autonomous communities throughout the implementation period. 

The financing agreement underlines the EIB's commitment to economic, social and territorial cohesion, as more than 65% of the total associated investment will go to regions whose per capita income is below the EU average. 

The 700m loan approved is part of the EIB's programme of actions in support of the REPowerEU plan, and will support energy security by facilitating the integration of renewable energy and reducing the EU's dependence on fossil fuel imports.  

"Supporting the modernisation of electricity grids to facilitate the integration of new renewable energy sources is one of the EIB's priorities included in its Climate Bank roadmap," commented Jean-Christophe Laloux, the EIB's Director General for EU Operations. "This new financing agreement with Iberdrola will accelerate Spain's energy transition, ensure access to sustainable energy for all citizens and contribute to the EU's energy and strategic autonomy," added Laloux. 

Iberdrola's Director of Finance, Control and Corporate Development, José Sainz Armada, said: "Thanks to this loan, the company will be able to speed up the decarbonisation of industry, a key process for Spanish companies. With this new EIB financing we are furthering the development of smart grids in Spain, which are essential for facilitating the energy transition, boosting efficiency and improving the distribution network and the quality of supply. We are also helping to electrify the economy and reduce the country's energy dependence". 

EIB and energy security 

In 2023, the EIB Group granted financing worth more than EUR 21bn for energy security in Europe. In Spain, this objective amounted to 4.513 billion in the same year, financing renewable energy projects, energy efficiency, electricity grids and storage systems, among others. These investments are helping Europe to accelerate the transition to sustainable energy and reduce its dependence on fossil fuel imports. 

In July 2023, the EIB's Board of Directors decided to increase to EUR 45bn the funds allocated to REPowerEU projects, the scheme designed to end Europe's dependence on fossil fuel imports.  

The EIB has also decided to broaden the range of eligible sectors to boost financing for EU manufacturing industry in strategic leading-edge zero net carbon technologies, as well as the extraction, processing and recycling of key raw materials. This additional funding will be distributed between now and 2027 and, in total, is expected to mobilise more than €150 billion in investments in the targeted sectors. 

Electricity grids, a key pillar of the energy transition 

Electricity grids are the platform needed to move towards a decarbonised economy, enabling the integration of more renewables, the attraction of industry, sustainable mobility, smart cities and self-consumption. Distribution grids are a key enabler of initiatives and trends that are changing the economy, such as electric mobility, heat pumps, self-consumption and smart cities. 

The European Union has recently increased the target for total renewable energy consumption in Europe to 42.5% by 2030, up from 32%. In order to bring renewables to customers and businesses, it is estimated that for every euro invested in renewable generation, around one euro of investment in distribution networks is needed.  

Iberdrola operates one of the most important electricity distribution systems in the world. The company already has more than 1.3 million kilometres of power lines and more than 4,500 substations in Spain, the United States, the United Kingdom and Brazil, which distribute electricity to more than 35 million people around the world. 

Iberdrola's commitment to sustainable financing and decarbonisation in the country 

Iberdrola continues to advance in its commitment to sustainability, based on the electrification of the economy, through clean energy, and oriented towards the fight against climate change and the creation of wealth and employment in the communities in which it operates. 

At the end of 2023, the group already had green financing or financing linked to sustainability criteria amounting to more than 54,449 million euros, of which more than 20,200 million euros correspond to green bonds.