The European Investment Bank (EIB) has granted a EUR 300 million loan to Energias de Portugal, SA (EDP) for the re-powering of two existing pumped storage hydropower plants. EIB Vice-President Magdalena Álvarez Arza and the CFO of EDP, Nuno Alves, presided over the signing ceremony for the finance contract (with a maturity of 15 years) in Lisbon this morning.
The EIB Vice-President emphasised that “the European Investment Bank, as the financial arm of the European Union, is pleased to finance this type of project, which has clear benefits in terms of environmental sustainability and security of the energy supply. Indeed, these investments are of common interest to Portugal and the Bank and thus constitute one of our strategic priorities.”
Following on from a loan in the amount of EUR 145 million, signed in 2009 (EDP Repowering I), which formed part of EDP’s investment programme in new and existing hydropower plants, this loan will serve to finance the re-powering of two existing pumped storage hydropower plants: the Alqueva plant on the Guadiana River in the southeast of Portugal; and the Venda Nova plant on the Cávado River in the north of Portugal. For Alqueva, the project will more than double installed capacity from 240MW to 496MW and for Venda Nova it will more than treble installed capacity from 281 MW to 1017 MW. The project is located in two of Portugal’s convergence regions – Norte and Alentejo.
The aim of the project is to augment peak hydropower capacity and to supply ancillary services in the market. The plants will generate electricity during peak and medium load hours and store energy during base load hours. The project will support renewable energy and reduce CO2 emissions, as pumping power stations enable the accommodation of a higher share of renewable energy in the electricity system. It will improve the reliability of the power system and contribute to the coverage of electricity demand and thus to security of supply.
The project is in line with the national strategy on renewable energies decided by the Portuguese government in 2007 and forms part of EDP’s investment programme for the coming decade in new and existing hydropower plants in Portugal.
Background information:
The European Investment Bank is the long-term financing institution of the European Union (EU), working to further European objectives. The Bank’s financing is geared to well-defined European policies. As part of the EU’s strategy of fostering sustainable, competitive and secure energy, the EIB gives priority to financing investment in renewable energies, energy efficiency, energy RDI, the diversification and security of the internal energy supply (including the trans-European energy networks) and external energy security.