PROJECT PRIME SOLAR PV

The project will finance the design, construction, implementation and operation of 5 solar photovoltaic plants (with an aggregate capacity of 240MWp) in Castilla y Leon and Extremadura.

The aim is to support the National and EU decarbonisation targets as well as contribute to climate change mitigation.

The project falls under the InvestEU objectives as it concerns the generation, supply or use of clean and sustainable renewable and safe and sustainable other zero and low-emission energy sources and solutions.

The project increases renewable energy generation capacity in Spain and contributes to national and EU 2030 climate objectives. The financing of this project is in line with the Bank's lending priority objectives on Renewable Energy as well as on Climate Action, Environmental Sustainability and Social and Economic Cohesion.

The project produces electricity from low carbon sources (solar PV plants), addressing the market failure of negative climate and environmental externalities, through the reduction of carbon emissions and other air pollution (compared to fossil-fuel generation).

As the project is expected to rely on revenues from the market (the wholesale market and unsubsidized commercial Power Purchase Agreements), in a sector characterised by incomplete markets (limited forward/hedging, lack of scarcity pricing and lack of locational pricing). Thereby the project improves market efficiency and competition.

The project is expected to yield very good quality and results due to excellent rated, broader social benefits and fair employment creation. The project is supported by the adequate governance and capabilities of the promoters. The schemes are located in EIB Cohesion Priority regions.

With the tenor provided, without price hedging mechanisms for a long period, coupled to high leverage, the project is in the higher range of risk financed on the market. Presence of the EIB has a strong signalling and catalytic effect showing that the Project is worth financing. The Bank's streamlined approval process used for this sub-operation is instrumental in allowing its signature and start of construction in a reduced timing, which is paramount for the Sponsor.

The project would not have been carried out (to the same extent) by the EIB without the InvestEU support.

Solar power plants and most of the ancillary infrastructure fall under Annex II of the Environmental Impact Assessment (EIA) Directive 2011/92/EU (amended by the Directive 2014/52/EU), requiring the competent authorities to determine whether an EIA is required. Overhead transmission lines for the interconnection of the schemes to the grid, if falling under the Annex I due to their technical characteristics, are expected to be subject to an EIA process. The EIB will assess compliance with applicable EU Directives during the project appraisal, in particular concerning cumulative impacts and potential impacts on nature conservation sites.

The promoter is a private company and the schemes envisaged for this operation are market-based renewable energy projects, which do not enjoy any special or exclusive rights. Therefore, private sector procurement procedures should apply. This will be further reviewed during the project appraisal.