18 July 2022
Promoter – Financial Intermediary
GALP ENERGIA SGPS SA
The project concerns the financing of three solar photovoltaic (PV) farms in the Spanish region of Castilla-La Mancha, for a total capacity of 150 MWp. Allocation under Framework Loan (FL) 2020-0452.
Additionality and Impact
The project increases renewable energy generation capacity in Spain and contributes to national and EU 2030 climate objectives. The financing of this project is in line with the Bank's lending priority objectives on Renewable Energy as well as on Climate Action, Environmental Sustainability and Social and Economic Cohesion. The project produces electricity from low carbon sources (solar PV plants), addressing the market failure of negative climate and environmental externalities, through the reduction of carbon emissions and other air pollution (compared to fossil-fuel generation). As the project is expected to rely solely on revenues from the market, in a sector characterised by incomplete markets (limited forward/hedging, lack of scarcity pricing and lack of locational pricing), the project improves market efficiency and competition. The project is expected to yield very good quality and results due to employment creation. The project is supported by the adequate governance and capabilities of the promoter. The project components are located in an EIB Cohesion Priority region. The allocation will support the solar PV portfolio of the Promoter (Framework operation), resulting instrumental in accelerating its full development and implementation. The innovative structure of the parent operation, made of a short-term corporate loan (this allocation) and a long-term project finance loan, will provide flexibility and financial benefit to the Promoter. Particularly, the current allocation component provides readily available liquidity during the initial stages of the portfolio's development. Furthermore, the EIB's participation signals the high environmental and sustainability standards of the project, crowding-in additional financial institutions. The EIB's role as the Climate Bank, are ultimately showcased in the "Green Loan" label assigned to the operation and related allocations.
The project consists of the construction and operation of a cluster of three solar photovoltaic (PV) plants for a total capacity of ca. 150 MWp, and the associated infrastructure such as substations, interconnections and access roads, including a 21.4 km transmission line in 220 kV to connect to the grid. The project is located in the Spanish region of Castilla-La Mancha, in the municipalities of Alcázar de San Juan for the PV plants, and Alcázar de San Juan, Herencia, Villarta de San Juan, Puerto Lápice and Arenas de San Juan for the transmission line.
- Electricity, gas, steam and air conditioning supply
Proposed EIB finance (Approximate amount)
EUR 55 million
Total cost (Approximate amount)
EUR 110 million
The transmission line is included in the Annex I of the EIA Directive (Directive 2014/52/EU amending the EIA Directive 2011/92/EU), with c. 21 km in 220 kV. All the PV plants are included in the Annex II of the EIA Directive and have been screened in by the competent authority. All solar PV plants and the transmission line underwent an environmental impact assessment (EIA) process, including public consultation. The PV plants and associated infrastructure obtained their environmental permits (Declaración de Impacto Ambiental - DIA) in November 2019. The environmental permits include the confirmation from the competent authority that the PV plants and associated infrastructure will not have significant effects on Natura 2000 sites. Where relevant, appropriate assessments were carried out as part of the environmental impact studies. The authorisation procedure and compliance with the relevant EU directives, specifically Habitats and Birds Directives (92/43/EEC and 2009/147/EC, respectively), will be further assessed at appraisal, in particular the potential cumulative impacts assessment and the impacts on protected flora and fauna, including Natura 2000 sites.
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 at the project appraisal, the EIB were to conclude that the Promoter is subject to EU public procurement legislation, then the Bank would duly inform the Commission Services and would require the Promoter to apply those rules.
Approved - 7/07/2022