HERRERA ALLOCATION GREEN ENERGY FL 2019-0811

Promoter – Financial Intermediary

IBERDROLA SA

Location

• Spain

Description

Financing of the Herrera onshore wind project (63 MW) in the Spanish region of Castilla y León. Allocation under the Framework Loan (FL) 2019-0811 IBERDROLA SPAIN GREEN ENERGY FRAMEWORK LOAN.

Additionality and Impact

The project increases renewable energy generation capacity in Spain and contributes to national and EU 2030 climate objectives.Electricity is produced from low carbon sources (onshore wind), addressing the market failure of negative climate and environmental externalities, through the reduction of carbon emissions and air pollution. The project thus contributes to the EIB's priority of supporting the transition to a low carbon, environmentally friendly and climate resilient economy. As it relies on revenues from the market (the wholesale market and/or unsubsidized commercial PPAs), in a sector characterised by incomplete markets, the project improves market efficiency and competition.It is expected to yield very good quality and results due to excellent social benefits, fair employment creation and a good ESG rating.

EIB financing provides the promoter with financial flexibility and a product adapted to its financial needs, which is not readily available either on the capital markets or through commercial banks. Moreover, the promoter attaches strong value-added to the EIB Green Energy Loan label, which it perceives as a mark of quality with regard to the sustainability of the investments, complementing its sustainable financing palette. Finally, the EIB's financial contribution has also catalysed co-financing for the operation from Instituto de Credito Oficial (ICO), the Spanish promotional bank.

Objectives

The operation will be key in order to increase electricity generation from renewable energy sources in Spain, in line with climate targets adopted for 2020, 2030 and 2050.

Sector(s)

• Energy - Electricity, gas, steam and air conditioning supply

Proposed EIB finance (Approximate amount)

EUR 34 million

Total cost (Approximate amount)

EUR 68 million

Environmental aspects

The project is included in Annex I of the EIA Directive (Directive 2014/52/EU amending the EIA Directive 2011/92/EU), requiring a full environmental impact assessment (EIA), including public consultation. The project received its environmental permit in April 2019, for both the plant and the transmission line with no reported complaints.

Procurement

The Promoter has been assessed by the EIB as being a private company not subject to EU rules on public procurement or concessions. However, if after the project appraisal, the EIB were to conclude that the Promoter is after all subject to EU public procurement legislation Directive 2014/23/EU / 2014/24/EU / 2014/25/EU, where applicable, then the Bank would require the Promoter to ensure that contracts for the implementation of the project have been and will be tendered in accordance with the relevant applicable EU procurement legislation Directive 2014/23/EU 2014/24/EU / 2014/25/EU, where applicable, as well as Directive 92/13/EEC or Directive 89/665/EEC, as interpreted by the Court of Justice of the EU, with publication of tender notices in the Official Journal of the EU, as and where required.

Status

Approved - 24/02/2021