Iberdrola signs EUR 1 billion loan with the EIB to accelerate Europe's energy transition
The European Investment Bank (EIB) and Iberdrola have signed a new EUR 1bn financing agreement to accelerate Europe's energy transition through the construction of a large portfolio of photovoltaic (19) and onshore wind (3) plants in Spain, Portugal and Germany. The construction of these plants will mobilise a combined investment of more than EUR 1.7 billion and their total installed capacity will be 2.2 GW. The project will contribute to accelerating the energy transition, security of energy supply, climate action and social cohesion in Europe.
This operation contributes to REPowerEU, the EU's programme to increase Europe's energy autonomy. In addition, the project will have an innovation component that will help the integration of renewables, undoubtedly one of the major challenges for achieving Europe's climate goals. Some of the photovoltaic projects will include hybridisation with wind energy and battery systems for energy storage. Hybrid systems allow PV power to be generated when the sun shines and wind power when the wind blows, complementing each other and sharing the same connection point to ensure a more stable supply. Energy storage is a fundamental pillar of the energy transition, as it makes renewable energy production more flexible and guarantees its integration into the system. The agreement was signed in Madrid by Ricardo Mourinho Félix, Vice-President of the European Investment Bank, and Ignacio Galán, Chairman of Iberdrola.
The new-build plants will generate green power equivalent to the approximate average consumption of more than one million households in a year and will largely be located in cohesion regions where per capita income is below the EU average, demonstrating the EIB's commitment to economic and social convergence. The investments to be undertaken under this agreement will boost economic growth and employment in the regions where the renewable energy plants will be installed. This new project will contribute to the national energy plans of the three countries, as well as to Iberdrola's net zero emissions target set for 2040. "With this major financing agreement covering three countries, the EIB is continuing its firm commitment to accelerating Europe's energy transition and ensuring access to sustainable energy for all Europeans," stressed EIB Vice-President Ricardo Mourinho Félix. "This is a strategic objective for the European Union and for the EIB, contributing not only to climate change mitigation but also to the Union's energy security and strategic autonomy. Sustainable energy and energy security are two sides of the same coin as the horrific war in Ukraine has shown. Collaboration with European energy companies such as Iberdrola is essential to achieve this dual objective".
Iberdrola's CEO, Ignacio Galán, said: "As one of the EIB's main partners, we are delighted to once again have the EIB's confidence through this loan, which is a huge boost for accelerating Europe's energy independence - in line with the EU's RePowerEU Plan -, meeting climate targets and continuing to create economic growth and jobs on the continent".
EIB and energy security
By 2022 the EIB Group has committed more than EUR 17bn in financing for Europe's energy transition. In Spain, this priority action of the Climate Bank reached a record EUR 3.197 billion in the same year for financing sustainable energy and natural resource projects, making the country the second largest in the EU in terms of volume of financing. This figure demonstrates the Group's commitment to ensuring access to sustainable energy at a time of great uncertainty. These investments are helping Europe to overcome the crisis caused by the sudden cut in Russian gas supplies resulting from Russia's unjustified aggression against Ukraine.
In October, the EIB's Board of Directors decided to raise the Group's clean energy financing volumes to record levels in support of the REPowerEU objective, which aims to end Europe's dependence on Russian fossil fuel imports. Over the next five years, EUR 30bn will be invested in addition to the EIB's already strong support for the energy sector in the EU. The financing committed as part of REPowerEU is estimated to mobilise EUR 115bn in additional investment by 2027, making a substantial contribution to Europe's energy independence and to the EIB Group's goal of mobilising EUR 1 trillion over this decade for climate finance.
Spain is set to play a major role in the deployment of REPowerEU and in the EIB Group's long-term commitment to sustainable energy in general. Proof of this is the financing committed to projects such as Iberdrola's and other renewable energy, energy efficiency or energy storage and grids projects receiving EIB finance in Spain.
Iberdrola committed to renewables and sustainable financing
The transaction forms part of Iberdrola's commitment to decarbonising the planet. As part of this strategy, the company plans to invest more than EUR 47 billion between 2023 and 2025 to boost the energy transition, employment and net zero emissions.
Iberdrola continues to advance in its commitment to sustainability, based on the electrification of the economy, through clean energy, and aimed at combating climate change and creating wealth and employment in the communities where it operates. Thanks to today's signing, the electricity company strengthens its position in sustainable financing with more than 48,000 million euros of ESG operations signed, of which 17,619 million are in green bonds.
The projects to which Iberdrola allocates the resources obtained with this type of placement are aligned with the Sustainable Development Goals (SDGs) of the United Nations, on which Iberdrola focuses its efforts: number 7 - Affordable and Clean Energy - and number 13 - Climate Action.