EDP DISTRIBUTION NETWORKS

Promoter – Financial Intermediary

EDP SA

Location

• Portugal
• Spain

Description

The project comprises the expansion and modernisation of electricity distribution networks in Portugal and Spain over the period 2024-2026.

Additionality and Impact

The investment programme concerns the extension and refurbishment of electricity distribution networks in Portugal and Spain. The Project is eligible under the EIB Energy Lending Policy and is consistent with the EIB Climate Bank Roadmap. It supports the Bank's Sustainable Energy public policy goal, in particular by contributing to secure the necessary enabling infrastructure. It will provide a significant contribution to Climate Action (climate change mitigation and adaptation) in line with the applicable EU Taxonomy requirements and to the EU Economic, Social and Territorial Cohesion by investing in EIB Cohesion Priority regions.

EIB financing to the Project will contribute to addressing market failures. This is expected to result in greater efficiency of investments promoted by the client. Market failures include negative environmental externalities and the need to ensure security of electricity supply, which has valuable public-good attributes. The investment programme will enable the connection of new users, improve the reliability of supply and support further decarbonisation of the power mix.

The Project's overall economic viability is rated as good with a positive broader social benefit. The promoter is an experienced utility operator of electricity distribution networks and has the necessary capacity to manage the implementation of the Project and operate the assets over the term of the loan. Overall, the Project quality and results is expected to be Very Good.

The Bank's financial contribution is considered valuable to the client, as the EIB's offering provides more flexible conditions compared to market alternatives (e.g. longer tenor and grace period). The Bank's financing shows the alignment of the investments and the Promoter's growth strategy with the EU policies on climate change, with the "EIB Green Loan" label deemed as a stamp of quality on the Promoter's investments and environmental-related procedures.

Objectives

The operation will support the upgrade and modernisation of various distribution system elements in medium and low voltage levels, such as substations, power transformers, smart meters, automation, underground cables and overhead lines.

Sector(s)

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

Proposed EIB finance (Approximate amount)

EUR 800 million

Total cost (Approximate amount)

EUR 1600 million

Environmental aspects

The project includes components that may fall under Annex II of the EIA Directive 2011/92/EU as amended by Directive 2014/52/EU, which requires the competent national authority to determine the need for an environmental impact assessment (EIA). Some of the typically expected impacts relate to visual impact, vegetation clearance, collision and electrocution of flying vertebrates, electromagnetic fields, noise nuisance and disturbances during construction.

Procurement

The Bank will require the Promoter to ensure that contracts for implementation of the project have been or will be tendered in accordance with the applicable EU procurement legislation, Directive 2014/23/EU / 2014/24/EU / 2014/25/EU 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 EU Official Journal, as and where required.

Status

Signed - 19/12/2024