European Investment Bank and Iberdrola to Drive Energy Transition with €1 Billion Agreement

European Investment Bank and Iberdrola to Drive Energy Transition with €1 Billion Agreement

(IN BRIEF) The European Investment Bank (EIB) and Iberdrola have signed a €1 billion financing agreement to accelerate the energy transition in Europe. The partnership aims to develop 19 solar power plants and 3 onshore wind farms in Spain, Portugal, and Germany, with a total installed capacity of 2.2 GW. The projects, with a joint investment of over €1.7 billion, will contribute to supply security, climate action, and social cohesion. They will also focus on innovative integration of renewables into grids, including hybridization with wind power and energy storage. The agreement supports the EIB’s REPowerEU plan and aligns with Iberdrola’s commitment to decarbonization.

(PRESS RELEASE) LUXEMBOURG, 12-Jun-2023 — /EuropaWire/ — The European Investment Bank (EIB), the lending arm of the European Union, and Iberdrola have joined forces in a new financing agreement worth €1 billion to accelerate the energy transition in Europe. The partnership aims to establish a network of 19 solar power plants and 3 onshore wind farms across Spain, Portugal, and Germany.

These projects, with a combined installed capacity of 2.2 GW, will require a joint investment of over €1.7 billion. The initiative will significantly contribute to the energy transition, enhancing supply security, promoting climate action, and fostering social cohesion throughout Europe.

The collaboration aligns with the EIB’s commitment to REPowerEU, the European Union’s plan to bolster energy autonomy. Furthermore, the project will incorporate innovative elements by facilitating the integration of renewables into grids, addressing a key challenge in achieving Europe’s climate objectives. Some photovoltaic projects will feature hybridization with wind power and battery systems for energy storage. The combination of these systems will ensure a more stable supply to the grid, with solar energy generation during sunny periods and wind energy generation when the wind blows. Energy storage plays a pivotal role in enhancing the flexibility and integration of renewable energy sources into the system.

The agreement was signed in Madrid by EIB Vice-President Ricardo Mourinho Félix and Iberdrola’s Executive Chairman, Ignacio Galán.

The new installations will generate green energy equivalent to the average annual consumption of over 1,000,000 households. Moreover, these projects will primarily be situated in cohesion regions, characterized by a lower per-capita income compared to the EU average. This underscores the EIB’s commitment to fostering equitable growth and promoting the convergence of living standards. The investments made under this agreement will stimulate economic growth and employment in the regions hosting these renewable energy facilities. Additionally, the projects will support the national energy plans of the three countries involved and assist Iberdrola in achieving its net zero emissions target by 2040.

“This major financing agreement covering three countries highlights the EIB’s continued firm commitment to accelerating the energy transition in Europe and to ensuring access to affordable, clean power for all Europeans,” said EIB Vice-President Ricardo Mourinho Félix. “This is a strategic objective for the European Union and the EIB that will not only contribute to climate change mitigation, but also to the EU’s energy security and strategic autonomy. As the horrific war in Ukraine has shown, sustainable energy and energy security are two sides of the same coin. To achieve them both, it is vital that we collaborate with companies in the European energy sector such as Iberdrola.”

Executive Chairman of Iberdrola Ignacio Galán added that “As one of the main partners of the EIB, it is a pleasure for us to have the Bank support again through this loan, which represents a significant contribution to accelerate Europe’s energy independence -in line with the REPowerEU Plan of the European Union–, achieve climate objectives, and continue creating economic growth and employment in the continent.”

EIB and Energy Security

In 2022, the EIB Group committed over €17 billion in financing for the energy transition in Europe, with Spain receiving a record €3.1 billion for sustainable energy and natural resources projects, making it the second-largest beneficiary of EIB financing in the EU. The EIB Group’s robust support for sustainable energy underscores its commitment to ensuring access to sustainable energy amidst uncertain times. The investments play a crucial role in helping Europe weather the crisis triggered by the disruption of gas supplies following the events in Ukraine.

In October 2022, the EIB Board of Directors decided to elevate the Group’s clean energy financing volumes to unprecedented levels in alignment with the REPowerEU objective of reducing Europe’s reliance on Russian fossil fuel imports. Over the next five years, an additional €30 billion will be invested, augmenting the EIB’s already substantial support for the EU energy sector. The financing pledged under REPowerEU is anticipated to mobilize an additional €115 billion in investments by 2027, significantly contributing to Europe’s energy independence and the EIB Group’s target of mobilizing €1 trillion in climate finance during this decade.

Spain’s Role in the Energy Transition

Spain is poised to play a pivotal role in the deployment of REPowerEU and the EIB Group’s long-term commitment to sustainable energy. The financing provided for projects like Iberdrola, as well as other renewable energy, energy efficiency, energy storage, and network projects in Spain, demonstrates the EIB’s commitment to the country.

For more information about the EIB’s support for the energy sector, please visit their website.

Iberdrola’s Commitment to Renewables and Sustainable Financing

This collaboration aligns with Iberdrola’s commitment to decarbonizing the planet. As part of its strategy, the company plans to invest over €47 billion between 2023 and 2025 to drive the energy transition, employment, and achieve net zero emissions.

Iberdrola continues to make progress with its sustainability strategy, focusing on the electrification of the economy through sustainable energy sources. The company aims to combat climate change while fostering economic growth and job creation in the regions where it operates. The funding secured through this agreement will further strengthen Iberdrola’s position in sustainable financing, with more than €48 billion in ESG operations, including €17.6 billion in green bonds.

The projects funded through this financing align with Iberdrola’s focus on the UN Sustainable Development Goals, particularly SDG 7 (affordable and clean energy) and SDG 13 (climate action).

Background information

About the EIB

The European Investment Bank Group (EIB Group) — formed by the European Investment Bank (EIB) and the European Investment Fund (EIF) — reported another year of excellent results in Spain, with record support for climate action and environmental sustainability projects and €9.9 billion of total financing signed in 2022.

About Iberdrola

Iberdrola is the largest energy company in Europe by market capitalization and one of the two main energy companies in the world, a leader in renewables, which is leading the energy transition towards a low-emissions economy. The group supplies energy to nearly 100 million people and develops its renewable, network and commercial activities in Europe (Spain, the United Kingdom, Portugal, France, Germany, Italy and Greece), the United States, Brazil, Mexico and Australia and maintains markets such as Japan, Taiwan, Ireland, Sweden and Poland, among others, as growth platforms.

With a workforce of 40,600 people and assets of more than €154,600 million, in 2022 it obtained revenues of almost €54,000 million, a net profit of €4,340 million and a tax contribution of 7,500 million euros in the countries where it operates. The company contributes to maintaining 400,000 jobs in its supply chain, with annual purchases of €17,800 million in 2022. A benchmark in the fight against climate change, it has allocated more than 140,000 million euros in the last two decades to build a sustainable energy model, based on solid environmental, social and governance (ESG) principles.

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SOURCE: European Investment Bank



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