- €500 million credit signed as initial tranche of an approved €700 million green loan.
- Loan will finance smart power grid development and expansion, facilitating the integration of renewable energy sources and the addition of new uses.
- Project supports the REPowerEU objective of building energy security and reducing the European Union’s dependence on fossil fuel imports.
The European Investment Bank (EIB) approved a €700 million green loan to expand Iberdrola’s electricity-distribution grid in Spain. An initial, €500 million tranche was signed in Madrid by EIB Director General for European Union Operations, Jean-Christophe Laloux, and Iberdrola Finance, Control and Corporate Development Director José Sainz Armada.
The total investment under the project amounts to €1.44 billion, with the remaining €740 million provided by Iberdrola. The aim is to improve the efficiency and resilience of the power grid, enable more renewable-energy sources to be connected and facilitate new uses such as heat pumps and electric vehicles driving forward energy transition and decarbonisation of the Spanish electricity sector.
The project will also boost industrialisation, economic growth and job creation in Spain, safeguarding 10 000 jobs a year in 12 autonomous communities during the implementation period.
The finance contract underscores the EIB's commitment to economic, social and territorial cohesion, with more than 65% of the total investment going to Spanish regions where per-capita income is below the EU average.
The loan is part of the EIB’s plan of action to back REPowerEU and will support energy security by facilitating the integration of renewable energy and reducing the EU’s dependence on imports of fossil fuels.
“Supporting power-grid modernisation to facilitate the integration of new sources of renewable energy is among the priorities included in the EIB Climate Bank Roadmap,” said EIB Director General of Operations in the European Union Jean-Christophe Laloux. “This new financing agreement signed with Iberdrola will accelerate Spain's energy transition, ensure access to sustainable energy for all and contribute to the European Union’s strategic and energy independence.”
Iberdrola Finance, Control and Corporate Development Director José Sainz Armada added: “This loan will enable us to speed up the decarbonisation of industry, a key process for Spanish companies. We will use this new EIB financing to expand smart grid development in Spain, as this is vital for facilitating the energy transition, boosting efficiency and improving the distribution network and supply quality. We will also contribute to the electrification of the economy and reducing the country’s energy dependence.”
The EIB and energy security
In 2023, the EIB Group provided more than €21 billion for energy security in Europe. In the same year, it allocated €4.5 billion to this goal in Spain, financing projects in areas including renewable energy, energy efficiency, power grids and storage systems. These investments are helping Europe to speed up the transition to using sustainable energy and reduce its reliance on fossil fuel imports.
In July 2023, the EIB Board of Directors raised the amount earmarked for REPowerEU projects to €45 billion. REPowerEU is the plan designed to end Europe’s dependence on fossil fuel imports. To boost financing for the EU manufacturing industry, the EIB will also expand the range of eligible sectors to include leading strategic technologies with net-zero carbon emissions, as well as extraction, processing and recycling of critical raw materials. The additional financing will be disbursed between now and 2027. In total, it is expected to mobilise more than €150 billion in investment in the target sectors.
More information on EIB support for the energy sector is available here.
Power grids as a key pillar of the energy transition
Power grids are a vital platform for transitioning to a carbon-free economy with more renewable energy, attractive industry, sustainable mobility, smart cities and self-supply. Distribution networks are a key element in enabling economy-transforming initiatives and trends like electric mobility, heat pumps, self-supply and smart cities.
The European Union recently increased its total renewable energy use target in Europe to 42.5% by 2030 (up from 32%). An equal amount of investment is expected to be needed in both generating renewable energy and upgrading power grids to bring this energy to customers and businesses.
Iberdrola operates ones of the largest electricity distribution systems in the world. It has over 1.3 million km of power lines and more than 4 500 substations in Spain, the United States, the United Kingdom and Brazil, supplying electricity to over 35 million people across the planet.
Iberdrola's commitment to sustainable financing and decarbonisation in Spain
Iberdrola is continuing to move forward with its sustainability strategy, which is based on electrifying the economy through clean energy, and which focuses on combating climate change and creating wealth and jobs in the regions where it operates.
At the end of 2023, the company had green or sustainability-linked financing of more than €54.449 billion, including over €20.2 billion of green bonds.
About the EIB
The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It finances sound investment contributing to EU policy objectives. EIB projects bolster competitiveness, drive innovation, promote sustainable development, enhance social and territorial cohesion, and support a just and swift transition to climate neutrality.
The European Investment Bank Group (EIB Group), consisting of the European Investment Bank (EIB) and the European Investment Fund (EIF), reported total financing signatures in Spain of €11.4 billion in 2023, approximately €6.8 billion of which went to climate action and environmental sustainability projects. Overall, the EIB Group signed €88 billion in new financing in 2023.
