The European Investment Bank (EIB) has approved a $759 million green loan to expand Iberdrola’s electricity distribution grid in Spain following an initial $542 million tranche.
The project’s total investment is $1.56 billion and the remaining $802.45 million will be provided by Iberdrola to improve the efficiency and resilience of the power grid, enable more renewable-energy sources to be connected and facilitate new uses such as heat pumps and electric vehicles driving forward energy transition and decarbonization of the Spanish electricity sector.
The project will also boost industrialization, economic growth and job creation in Spain, protecting 10,000 jobs a year in 12 autonomous communities during the implementation period.
More than 65% of the total investment will be dedicated to Spanish regions with per-capita income below the EU average. The loan not only supports REPowerEU, a plan designed to end Europe’s dependence on fossil fuel imports, but also backs energy security by facilitating the integration of renewable energy and reducing the EU’s dependence on imports of fossil fuels.
“We will use this new EIB financing to expand smart grid development in Spain, as this is vital for facilitating the energy transition, boosting efficiency and improving the distribution network and supply quality,” said Iberdrola Finance, Control and Corporate Development Director Jose Sainz Armada. “We will also contribute to the electrification of the economy and reducing the country’s energy dependence.”
The EIB will expand the range of eligible sectors to include leading strategic technologies with net-zero carbon emissions, as well as extraction, processing and recycling of critical raw materials to strengthen financing for the EU manufacturing industry.
The additional financing will be disbursed between 2024 and 2027. It is expected to mobilize more than $162.2 billion in investment in the target sectors.
The European Union has increased its total renewable energy use target in Europe to 42.5% by 2030 (up from 32%). An equal amount of investment is expected to be needed in both generating renewable energy and upgrading power grids to bring this energy to customers and businesses.
