Iberdrola and IFC Join Forces to Support Clean Energy Initiatives in Developing Nations

José Sainz Armada, Director of Finance, Control and Corporate Development of Iberdrola and Alfonso García Mora, IFC Vice President for Europe, Latin America and the Caribbean.

(IN BRIEF) Iberdrola and the International Finance Corporation (IFC) have formed a partnership to promote clean energy and decarbonization in emerging countries. The collaboration includes a green and sustainability-linked loan from IFC to Iberdrola for energy efficiency improvements in Brazil’s electricity distribution networks. The two institutions are also exploring a green loan for renewable energy projects in countries like Poland, Morocco, and Vietnam. Additionally, they are considering joint efforts in developing innovative clean energy projects such as offshore wind generation and green hydrogen. Iberdrola is already making progress in renewable projects in Poland and Vietnam. IFC, as the private sector lending arm of the World Bank Group, supports private sector development through investments and advisory services. Iberdrola is a leader in green finance, while IFC is a global benchmark in green and sustainable financing.

(PRESS RELEASE) BILBAO, 23-May-2023 — /EuropaWire/ — Iberdrola (BME: IBE), a Spanish multinational leader in clean energy and a pioneer in the deployment of smart grids, and the International Finance Corporation (IFC), a division of the World Bank Group, have announced a collaborative effort to accelerate the energy transition in emerging countries. The partnership aims to promote clean energy deployment and decarbonization in several developing nations.

The agreement between Iberdrola and IFC is built upon three key pillars. Firstly, IFC will provide Iberdrola with a green and sustainability-linked loan worth $150 million (~€138 million) to support digitalization and energy efficiency enhancements in the electricity distribution networks operated by Iberdrola’s subsidiary in Brazil, Neoenergia. This follows IFC’s earlier sustainable loan of $115 million to Neoenergia in 2022.

Secondly, Iberdrola and IFC are exploring the possibility of another green loan, linked to sustainability indicators, to facilitate the development of renewable energy projects in emerging countries such as Poland, Morocco, and Vietnam.

Lastly, both institutions are evaluating collaborative options to support the advancement of innovative clean energy ventures in emerging markets, including offshore wind generation and green hydrogen.

José Sainz Armada, Iberdrola’s Director of Finance, Control and Corporate Development, said: “With this agreement we are making progress in the energy transition, decarbonization and electrification in developing countries, where Iberdrola is already working. It also consolidates IFC as one of Iberdrola’s allies in providing financing for its projects in all areas of activity, from photovoltaic and wind farms to green hydrogen and smart grids”. 

Alfonso García Mora, IFC vice president for Europe, Latin America and the Caribbean, said: “We are proud of our collaboration with Iberdrola in emerging markets. The loans we have signed with Neoenergia represent a first step for a broader collaboration that will drive the energy transition in Brazil, Poland, Morocco and Southeast Asia. Iberdrola, as a pioneer in the industry, is a strategic partner for IFC.”

Iberdrola is already making significant progress on various renewable energy initiatives in these targeted countries. Notably, in Poland, the company is partnering with SeaWind to develop a 7,300 MW offshore wind portfolio. Additionally, Iberdrola acquired Sowitec Vietnam in Vietnam, which holds a 550 MW renewable energy portfolio comprising five wind farms and a 50 MW floating photovoltaic project.

IFC, recognized for its AAA credit rating, serves as the private sector lending arm of the World Bank Group in emerging markets. It facilitates private sector development through investments in companies via loans, equity, guarantees, and mobilization of capital from other investors. IFC’s presence spans over 94 countries across Latin America, Africa, Asia, the Middle East, and Eastern Europe. To date, the institution has invested over $285 billion across 2,000 projects.

The collaboration between IFC and Iberdrola traces back to 1998 when IFC provided financing for Iberdrola’s subsidiaries in Bolivia (Electropaz). The relationship has since evolved, with joint projects in Brazil (Termopernambuco) and subsequent endeavors. Recently, IFC extended a loan of 550 million Brazilian reais ($115 million) to Neoenergia, incorporating green financing and a pricing structure tied to sustainability objectives.

Iberdrola has established itself as a leader in green finance, with over €48 billion in sustainable operations, including €17.6 billion in green bonds, making it the world’s largest private issuer of this type of debt.

IFC is globally renowned for its expertise in green and sustainable finance. It issued its inaugural green bond in 2010 and is one of the largest issuers of green debt, having issued 172 green bonds in 20 currencies. Since 2020, IFC has invested more than $4.5 billion in green and sustainability-linked loans for infrastructure companies in emerging markets. The institution actively participates in sustainable finance committees such as the International Capital Markets Association (ICMA), the Loan Market Association (LMA), and the Asia-Pacific Loan Market Association (APLMA).

The partnership between Iberdrola and IFC represents a significant stride towards achieving a greener and more sustainable future in emerging markets, while aligning with global climate objectives.

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SOURCE: Iberdrola, S.A.


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