Iberdrola and EIB extend a EUR 220 million green loan to boost Spain's smart grids

The European Investment Bank (EIB) and Iberdrola have agreed to extend the green loan signed in 2021 to support the development, modernisation and digitisation of the company's electricity distribution networks, a project with an impact on twelve Spanish regions. The EUR 220 million increase signed today brings the total EIB financing to around EUR 820 million, which will boost smart grids in Spain and contribute to the further electrification of the economy. The project linked to the loan will improve the efficiency of the distribution network, which will be enhanced by automation and control. 

With this loan, Iberdrola will boost economic recovery and employment in Spain by safeguarding around 10,000 jobs a year during the implementation period, according to EIB estimates. This loan supports the EU Bank's regional cohesion and development objectives, which prioritise the promotion of projects in less developed regions with a per capita gross domestic product (GDP) below the EU average. In this respect, 68% of the i-DE plan envisaged in this agreement is being developed in these Spanish regions. 

This agreement favours the development of the smart grid investment plan being developed by i-DE, Iberdrola's distribution company in Spain, for the period 2021-2023, which involves a total investment of 1,800 million euros. The company will have the capacity to multiply the reliability, efficiency and security of the electricity distribution grid, all thanks to support from the EIB and Spanish government funds through the Recovery and Resilience Mechanism (RRM). 

Iberdrola's CEO, Ignacio Galán, explained: "The extension of this green loan with the EIB will enable us to further develop smart grids in Spain, which are essential for facilitating the integration of renewable energy production, boosting energy efficiency and improving the distribution grid and the quality of supply. This will speed up the transition to a more sustainable model, helping to bring about greater energy self-sufficiency and security, which are so necessary at this critical time".  

EIB Vice-President Ricardo Mourinho Félix said: "The extension of this financing is all the more important at a time of energy crisis. We at the EIB know that it is vital to boost electricity grids in order to see the growth of renewable energies, which are vital for ensuring security of supply and decarbonising the EU's economies. The extension of this green loan with Iberdrola is a further step towards this goal, which will also translate into economic growth and employment in Spain". 

In environmental and energy terms, this operation is in line with the EIB's Climate Roadmap and the EU's REPowerEU strategy. The additional resources Iberdrola will receive will facilitate the implementation of the company's Strategic Plan, which focuses on investment in renewable energy and grids, two of REPowerEU's priorities. 

The projects developed by i-DE also support the increased electrification of the heating and mobility sector, in line with the objectives of Spain's National Integrated Energy and Climate Plan (PNIEC) 2021-2030. 

The EU Bank is developing this operation through a Green Loan. This is a type of financing whose characteristics fully comply with the requirements of the EIB's Climate Awareness Bonds (CAB) programme. The transaction is therefore eligible for allocation to its portfolio of CAB-financed lending operations.

Iberdrola, which is a global leader in sustainable and green financing, has established itself as a global benchmark in sustainable financing, being the first group in the world to issue green bonds, after being the first Spanish company to open this market in 2014. In 2016, the company also underwrote the first green loan for an energy company, in the amount of 500 million euros.

At the end of June 2022, the group already had green financing or financing linked to sustainability criteria amounting to more than 43.8 billion euros, of which more than 16.5 billion euros correspond to green bonds.  

The European Investment Bank (EIB) is the long-term financing institution of the European Union, whose shareholders are its Member States. The EIB provides long-term finance for sound investment to help achieve EU policy objectives. The European Investment Bank (EIB) provides long-term loans on behalf of the European Union.