The European Investment Bank (EIB) and Iberdrola, a multinational electric utility firm, announced on Monday, June 12, that they have signed a new €1B financing arrangement to accelerate energy transition in Europe.
The deal was signed in Madrid by EIB’s VP Ricardo Mourinho Félix and Iberdrola Executive Chairman Ignacio Galán.
The projects, with a combined investment of more than €1.7B and a total installed capacity of 2.2 GW, will accelerate the energy transition and strengthen supply security, climate action, and social cohesion in Europe.
The project is a part of the EIB’s financing package for REPowerEU, an EU initiative to increase Europe’s energy autonomy.
Aim of this project
EIB and Iberdrola aim to accelerate Europe’s energy transition by constructing a vast network of 19 solar power plants and three onshore wind farms in Spain, Portugal, and Germany.
Ricardo Mourinho Félix says, “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.”
“This is a strategic objective for the EU 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,” adds Félix.
Additionally, the initiative will also have an innovation component since it will make it easier to integrate renewable energy sources into grids, which is one of the biggest obstacles to meeting Europe’s climate goals.
In certain solar projects, hybridisation with wind energy and energy storage battery systems will be used.
According to a statement, hybrid systems produce energy from the sun and wind when they are present, complementing one another and sharing a common connection point to ensure a more consistent supply to the grid.
Green energy for households
In order to demonstrate the EIB’s commitment to equitable growth and the convergence of living standards, the new installations will produce green energy equivalent to the annual average energy consumption of more than 1,000,000 households.
They will be primarily situated in cohesion regions, where per-capita income is lower than the EU average.
According to EIB, the investments under this deal will contribute to increased employment and economic development in the areas where these renewable energy facilities are installed.
Additionally, these new initiatives will aid in the three nations’ (Spain, Portugal, Germany) national energy goals and aid Iberdrola in meeting its 2040 net zero emissions goal.
The EIB and energy security
The EIB Group, formed by the EIB and the European Investment Fund (EIF), reported another year of “excellent” results in Spain, with €9.9B in total funding agreed in 2022 and record assistance for climate change and environmental sustainability projects.
In 2022, the EIB Group agreed to offer over €17B in funding for Europe’s energy transformation. Spain earned a record €3.1B in funding for renewable energy and natural resource projects in the same year, making it the EU’s second-largest beneficiary of finance since this is a primary priority for the EU Climate Bank.
According to EIB, these investments are assisting Europe in surviving the crisis brought on by the sudden cutoff in gas supply following Russia’s illegitimate invasion of Ukraine.
The EIB Board of Directors raised the Group’s clean energy finance volumes to unprecedented levels in October 2022 to support REPowerEU in its mission to lessen Europe’s dependency on imported fossil fuels from Russia.
Over the course of five years, the EIB will invest an additional €30B on top of its already assistance for the EU energy industry.
The funding committed under REPowerEU is anticipated to create an extra €115B in investment by 2027, advancing Europe’s energy security and the EIB Group’s goal of mobilising €1T in climate finance this decade.
Iberdrola’s dedication to sustainable development and funding
The latest financing deal is part of Iberdrola’s commitment to help decarbonise the world. To advance the energy transition, employment, and net zero emissions, the firm looks to invest over €47B between 2023 and 2025 as part of this strategy.
Iberdrola says it is still pursuing its sustainability strategy, which is built on the electrification of the economy through renewable energy sources, geared towards addressing climate change, and focused on generating wealth and employment in the areas where it works.
With over €48B in ESG operations deals, including €17.6B in green bonds, the new financing project will allow the firm to further solidify its position in sustainable financing.
Iberdrola is concentrating on the UN Sustainable Development Goals 7 (cheap and clean energy) and 13 (climate action), and the projects sponsored with this type of funding are consistent with these goals.
About Iberdrola
Iberdrola claims to be one of the two major energy corporations in the world and the largest energy business in Europe by market capitalisation. It is a pioneer in renewable energy and is driving the energy transition to a low-emissions economy.
The firm provides energy to almost 100 million people, develops its renewable, network, and commercial activities in Europe (Spain, the UK, Portugal, France, Germany, Italy, and Greece), the US, Brazil, Mexico, and Australia, and keeps markets like Japan, Taiwan, Ireland, Sweden, and Poland as growth platforms, among others.
With a staff of 40,600 employees and assets of over €154,600M, it generated sales of about €54,000M in 2022, a net profit of €4,340M, and tax contributions in its operating nations of €7,500M.