EIB and Iberdrola sign €700m smart grid loan
The European Investment Bank (EIB) and Iberdrola have signed a €700 million ($759.8 million) green loan to expand the electricity distribution grid in Spain.
The loan will finance smart power grid development and expansion, facilitating the integration of renewable energy sources and new connections of clean tech assets, such as heat pumps and EVs.
The project will also boost industrialisation, economic growth and job creation in Spain, safeguarding 10,000 jobs a year in 12 autonomous communities during the implementation period. Additionally, more than 65% of the total investment will go to Spanish regions where per-capita income is below the EU average.
Of the loan, an initial €500 million ($542.7 million) tranche was signed in Madrid by EIB director general for European Union operations, Jean-Christophe Laloux, and Iberdrola finance, control and corporate development director José Sainz Armada.
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“Supporting power grid modernisation to facilitate the integration of new sources of renewable energy is among the priorities included in the EIB Climate Bank Roadmap,” said Laloux in a release.
“This new financing agreement signed with Iberdrola will accelerate Spain’s energy transition, ensure access to sustainable energy for all and contribute to the European Union’s strategic and energy independence.”
Added Armada: “This loan will enable us to speed up the decarbonisation of industry, a key process for Spanish companies.
“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. We will also contribute to the electrification of the economy and reducing the country’s energy dependence.”
The total investment under the smart grid project amounts to €1.44 billion ($1.6 billion), with the remaining €740 million ($803.2 million) provided by Iberdrola.
Iberdrola operates one of the largest electricity distribution systems in the world with over 1.3 million kilometres of power lines and more than 4,500 substations in Spain, the US, UK and Brazil, supplying electricity to over 35 million globally.
At the end of 2023, the company had green or sustainability-linked financing of more than €54.5 billion ($59.1 billion), including over €20.2 billion ($21.9 billion) of green bonds.
Related Knowledge Center: Climate economics
Climate change is now a driver of the world’s economy. The impact is profound:
- Catastrophic weather events — hurricanes, floods, droughts, high temperatures — are more frequent and more extreme. The cost can be measured in both the initial damage caused and the longer-term impact on the economy.
- Vulnerable communities are increasing climate-related investments, hardening infrastructure and taking other protective measures.
- Investment in carbon capture and storage technologies is increasingly rapidly.
- Governments are making investments and crafting regulations to reduce emissions of carbon dioxide and other greenhouse gases.
On top of all of this is the cost of uncertainty. As the Fourth National Climate Assessment, released in 2018 by the U.S. Global Change Research Program, says, “The assumption that current and future climate conditions will resemble the recent past is no longer valid.”