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The framework loan will support investments in electricity generation, transmission, distribution, district heating and cooling production and distribution in Andorra, in the period 2024-2028.
The aim is to support climate change mitigation beyond the EU borders. The project will improve the quality of electricity supply, develop district heating and enhance Andorra's electricity interconnection with Spain, while contributing to the national goal of achieving at least 33% of electricity demand supplied by national sources by 2030.
The operation concerns a framework loan supporting investments in electricity generation, transmission, distribution, and district heating and cooling production and distribution in Andorra, covering the period 2024-2028.
The Project is aligned with the EU's priorities and the country's own development objectives contributing to Andorra's energy and climate change policy objectives and to the national goal of achieving at least 33% of electricity demand supplied by national sources by 2030.
The Project will enable the Promoter to meet the increase in electricity, heat and cold demand in a sustainable manner (using renewable generation sources) while maintaining or improving the reliability and quality of supply of the distribution networks which will be modernised and digitalised. Investments contribute to maintaining security of supply, a public good. They also contribute to the integration of renewable generation, which reduces negative climate and environmental externalities.
The Project is aligned with EIB's Energy Lending Policy (Energy Networks and Renewable Generation) and Climate Action (Mitigation - Other, Renewable Energy and Energy Efficiency) eligibility criteria.
The Project's quality and results are expected to be "Good", and the Promoter is an experienced utility operator of power and heat systems.
The financing proposed offers features such as revisable rates, long grace periods and tenors and long availability periods which adjust to the project implementation timing and ensure a satisfactory project implementation. Additionally, these features improve the affordability of the project.
This operation is in line with the strategic priorities of the Principality of Andorra. This will be the first operation by the EIB in Andorra and will send a strong positive signal before the popular referendum to be held in Andorra to approve the Association Agreement between the EU and Andorra.
Some of the Project schemes in Andorra would have fallen under Annex I of the EIA Directive 2011/92/EU as amended by Directive 2014/52/EU, requiring an Environmental Impact Assessment (EIA), and Annex II of the EIA Directive 2011/92/EU as amended by Directive 2014/52/EU, requiring the competent national authority to determine the need for an EIA, if they were located within the EU. Schemes that have to do with digitalisation and refurbishment of assets are expected to have limited environmental impact. The Project scheme in Spain falls under Annex I of EIA Directive 2011/92/EU as amended by Directive 2014/52/EU, requiring an EIA. The requirements and status of the permitting procedures will also be further assessed during appraisal. The appraisal will focus on the capacity and capability of the Promoter to implement the programme in line with EIB environmental and social standards and requirements.
The promoter has to ensure that implementation of the Project will be done in accordance with the EIB's Guide to Procurement.