- This is the first loan granted by the EIB for the development of smart grids in Spain linked to the achievement of direct emission reduction indicators
Endesa and the European Investment Bank (EIB) are taking a new step in sustainable financing to boost the energy transition. EIB Vice-President, Ricardo Mourinho Félix, and Endesa Chief Financial Officer Luca Passa signed today a EUR 250 million loan in Madrid to finance the investments that e-distribución, Endesa's networks subsidiary, will make during the 2022-2024 period in the improvement, modernisation and expansion of electricity distribution networks.
This is the first sustainable loan granted by the EU Bank to finance distribution networks in Spain, which links the financial conditions to a corporate direct emissions reduction target (GHG scope 1).
The transaction consolidates the shared commitment of both institutions to sustainable finance and represents a new milestone for Endesa in its efforts to modernise electricity infrastructures with the ultimate aim of increasing security and the quality of supply, and thus facilitate the energy transition and the electrification of the economy. The funds will make it possible to boost the digitalisation, automation and sensorisation of networks to achieve more efficient and resilient electricity infrastructures that contribute to the energy transition, guaranteeing the integration of renewable energies, the deployment of electric vehicles or the promotion of self-consumption.
According to Luca Passa, Endesa's Chief Financial Officer, "This transaction reinforces Endesa's commitment to sustainable finance in collaboration with the EIB. This relationship has been reflected over the past year in the signing of the first two sustainable financing transactions in Spain for an amount of EUR 250 million each to develop renewable plants and continues now with a line of financing for the promotion of smart grids. Two elements, renewable energies and grids, which are the key to developing a new energy model that moves towards decarbonisation and will strengthen our energy independence."
EIB Vice-President Ricardo Mourinho Félix said: "At the EIB, we are staunchly committed to climate action and we are actively demonstrating this at COP27. Securing financing to ensure a resilient and sustainable energy supply represents a priority for the EU Climate Bank. Therefore, we are pleased to support this project to modernise electricity grids, which creates jobs and supports social cohesion, while encouraging the greater integration of renewable energies."
This loan is in addition to the EUR 1.1 billion in financing lines formalised between Endesa and the EIB to promote smart grids since 2014.
This project will be implemented in eight Spanish autonomous communities: Andalusia, Aragon, the Balearic Islands, the Canary Islands, Castile-Leon, Catalonia, Extremadura and Galicia. Most of these regions are considered cohesion regions by the EU. The operation therefore contributes to the EIB's regional cohesion and development objectives, which prioritise the promotion of projects in regions with a gross domestic product (GDP) per capita below the EU average.
In addition, the project will generate significant employment. Estimates for the operation foresee some 8,000 jobs per year throughout its implementation.
The value of investments financed by this loan contributes to mitigating climate change, while accelerating the transition to clean energy. Furthermore, pricing linked to sustainable criteria not only provides a stimulus and commitment, but also provides a solid example as a signal to the market, making it easier for Endesa to execute its ambitious decarbonisation strategy.
Distribution networks, key to the energy transition.
Endesa's Strategic Plan for the 2022-2024 period places the strengthening and modernisation of distribution networks as one of the company's two strategic pillars in addition to the development of generation from renewable sources. Endesa will allocate EUR 2.9 billion over the course of the period to distribution networks, a figure that will increase to EUR 12 billion through to 2030 to improve the quality of services, reducing energy losses and interruptions in supply.
These investments will make an important contribution to economic activity and employment in the 24 provinces in which Endesa's networks subsidiary, e-distribución, carries out its activity. During the past year, this activity saw electricity provided to more than 12.5 million customers encompassing both households and companies.
EIB at COP27
Find an overview of EIB at COP27 on our dedicated website. In addition, the EIB has a pavilion in the side event area of the Blue Zone and is running a series of events on numerous topics. You will find the full agenda here. You are welcome to join our virtual attendee hub to watch the sessions either live or later at your convenience, and network with attendees. With an easy two-step registration process, you will always have the latest information on our agenda.
The EIB Group has adopted a Climate Bank Roadmap to deliver on its ambitious agenda to support €1 trillion of climate action and environmental sustainability investments in the decade to 2030 and to deliver more than 50% of EIB finance for climate action and environmental sustainability by 2025. As part of the roadmap, all new EIB Group operations have been aligned with the goals and principles of the Paris Agreement since the start of 2021.
Endesa is the largest electricity company in Spain and the second largest in Portugal. The company is also the second largest gas operator in the Spanish market. Endesa operates an end-to-end generation, distribution and marketing business. Through Endesa X it also offers value-added services aimed at the electrification of energy usage in homes, companies, industries and Public Administrations. A new business line has also been created, Endesa X Way, fully dedicated to electric mobility. Endesa is firmly committed to the United Nations SDGs and strongly supports the development of renewable energies through Enel Green Power España, the digitalisation of grids through e-distribution, and corporate social responsibility (CSR). The Endesa Foundation is also active in CSR-related matters. Our workforce numbers around 9,260 employees. Endesa is a division of Enel, Europe’s largest electricity group.