Iberdrola expands partnership with the World Bank with a 300 million green loan for renewable projects in emerging countries such as Morocco
The World Bank, through its private sector investment arm, the International Finance Corporation (IFC), has given Iberdrola further backing. The organisation and the electricity company have signed a loan linked to ESG criteria (environmental, social and corporate governance) of 300 million euros for renewable projects in countries dependent on fossil fuels such as coal, including Morocco, Poland and Vietnam.
Of the agreed amount, EUR 170 million has already been committed to finance onshore wind energy projects in Poland. In addition, the two institutions continue to explore options for collaboration to support the development of new innovative clean energy projects in emerging countries, such as offshore wind generation and green hydrogen.
The current loan is subject to meeting two strategic ESG targets for the group. The first objective is to reduce the company's absolute direct and indirect greenhouse gas emissions by more than 60% by 2030 compared to the 2020 baseline, including Scopes 1, 2 and 3, from the company's operations, customers and supply chains. The second objective is to more than double Iberdrola's installed capacity by 2030, which at the end of the third quarter of 2023 exceeded 41,000 clean MW.
The operation is part of the alliance signed in May last year to promote the energy transition in emerging countries. At that time, a green loan linked to sustainability objectives of USD 150 million (around EUR 136 million) was formalised to finance digitalisation and energy efficiency improvements in the electricity distribution networks operated by Iberdrola's Brazilian subsidiary. Earlier, in 2022, IFC had already granted Neoenergia a loan for USD 115 million.
José Sainz Armada, Iberdrola's Director of Finance, Control and Corporate Development, said: "This loan will allow Iberdrola to continue contributing to the energy transition, decarbonisation and electrification of developing countries, which are still highly dependent on fossil fuels. It also consolidates IFC as one of our major partners in financing renewable projects.
"This loan is a significant step in the global IFC-Iberdrola Energy Transition Partnership, which aims to support Iberdrola's expansion and re-entry into emerging markets that need to decarbonise their energy matrix," said Alfonso Garcia Mora, vice president for Europe, Latin America and the Caribbean at IFC. "We look forward to partnering with Iberdrola on projects that can accelerate a just and equitable transition to a low-carbon and sustainable energy future in developing and emerging markets."
IFC, Committed to Emerging Markets
IFC, with AAA credit rating, is the arm of the World Bank Group that finances the private sector in more than 100 emerging countries, with the aim of enabling them to improve their own private sectors by investing in companies through loans, equity and guarantees. The mission is to mobilise capital from other investors, and to advise companies and governments to stimulate private investment.
The agency committed a record $43.7 billion (40 billion euros) last year to private companies and financial institutions in developing countries. IFC thus empowers the private sector to end poverty and boost shared prosperity as economies grapple with the impacts of crises.
Iberdrola, a leader in sustainable finance
Iberdrola is a leader in green finance. Last December, Europe's leading electricity company and the world's second largest by stock market value signed the largest credit line in its history for 5.3 billion euros with 33 banks at prices similar to those of 2019 and with a cost linked to the fulfilment of a series of ESG objectives. IFC's relationship with Iberdrola dates back to 1998 with financing to Iberdrola's subsidiaries in Bolivia.
Iberdrola has established itself as a global benchmark in sustainable financing, being the first private group in the world to issue green bonds, after becoming in 2014 the first Spanish company to issue a bond of these characteristics. The group currently has almost 20,000 million euros of green bonds outstanding.
