The European Investment Bank (EIB) and Gas Natural Fenosa have signed a loan for a total of EUR 450m that the energy group will use to finance part of its electricity distribution business and develop renewable energy projects in Spain.

The EIB financing will help implement the 2016-2019 investment plan of Gas Natural Fenosa's electricity distributor, Unión Fenosa Distribución, for the modernisation and extension of the distribution network in eight Spanish Autonomous Communities: the Canary Islands, Andalusia, Castilla la Mancha, Castilla León, Catalonia, the Community of Madrid, Extremadura and Galicia.

Gas Natural Fenosa – via Gas Natural Fenosa Renovables – will also use the EIB loan to finance the construction of 11 new wind farms on Gran Canaria and Fuerteventura, with total installed capacity of 49.6 MW.

Overall, these investments will improve the operation and coverage of Spain's electricity distribution network, which will result in efficiency, service and supply quality improvements for users.

In addition, the project being developed by Gas Natural Fenosa with EIB financing will make it possible to create 5 000 direct and indirect jobs during the implementation phase.

The new financing complements the two bond issues for EUR 2bn with maturities of seven to ten years carried out in the first half of 2017.