- The loan will be used to develop and expand smart electricity grids, facilitating renewable energy integration and industry connection.
- This is the first project financed by the Regional Resilience Fund launched by the Spanish Ministry of Economy, Trade and Enterprise to invest NextGenerationEU loans in the autonomous communities.
- The investment is expected to have a direct impact on 12 autonomous communities, some of them cohesion regions.
- This operation furthers the objectives of Spain’s Recovery, Transformation and Resilience Plan and Europe’s REPowerEU plan to increase energy security and accelerate the energy transition.
The European Investment Bank (EIB) and Iberdrola have signed a loan of €500 million under Spain’s Regional Resilience Fund to develop and expand smart electricity grids, facilitating renewable energy integration and industry connection.
The Regional Resilience Fund channels financing from Spain’s Recovery, Transformation and Resilience Plan under the NextGenerationEU recovery instrument in order to boost environmental and social investments in the autonomous communities. The Regional Resilience Fund is led by the Spanish Ministry of Economy, Trade and Enterprise. Projects are selected with input from the autonomous communities and cities, and from the Spanish Federation of Municipalities and Provinces (FEMP). The EIB is the strategic partner for fund management.
The loan will finance an electricity project that will improve grid efficiency and resilience, allow the electricity to be put to new uses (like heat pumps and electric vehicles) and enable more renewable energy sources to be connected. This will speed up the energy transition and its positive impact on energy security and autonomy, as well as the decarbonisation of the Spanish electricity sector.
A €700 million loan from the EIB’s own funds had already been approved to finance the project. That will now be supplemented with the additional €500 million loan from the Spanish Recovery, Transformation and Resilience Plan channelled by the EIB through the Regional Resilience Fund. This is the first operation with a private entity financed by the Regional Resilience Fund under the direct facility launched by the EIB in June 2024 to co-finance projects in sectors like renewable energy, clean transport and sustainable infrastructure.
Inés Carpio, Director General of International Financing of the Spanish Treasury, stressed the importance of the Regional Resilience Fund “to continue promoting the modernisation and transformation of the productive sector and the Spanish economy through the recovery plan, with a clear focus on energy transition and efficiency.”
“We are very pleased to sign the first financing from the Regional Resilience Fund to expand and develop Iberdrola’s electricity grids in Spain,” said Antonio Lorenzo, Head of the EIB’s Corporate Finance Division in Spain. “This is a key project for the development of smart grids that will enable the integration of renewable energies into Spain’s electricity system, with an impact on 12 autonomous communities.”
The project will also boost industrialisation, economic growth and job creation in Spain, maintaining 10 000 jobs per year in those autonomous communities throughout the implementation period.
The financing arrangement underscores the commitment of the EIB and the Spanish Ministry of Economy, Trade and Enterprise to economic, social and territorial cohesion, with over 65% of the total investment going to regions where income per capita is below the EU average.
“With this financing, Iberdrola will speed up the development of the distribution network in Spain over the coming years, which is necessary in order to connect and serve Spanish industry and businesses. We will expand the development of smart grids, which are essential for making the energy transition, boosting efficiency and improving the distribution network and the quality of supply. We will also help electrify the economy and reduce the country’s energy dependence,” said Iberdrola CFO José Sainz Armada.
Background information
Regional Resilience Fund
The Regional Resilience Fund was created to facilitate access to NextGenerationEU loans from the Spanish Recovery, Transformation and Resilience Plan for the autonomous communities, with the aim of boosting investment and developing projects in eight priority areas: social and affordable housing; urban renewal; transport and sustainable tourism; the energy transition; water and waste management; the care economy; research, development and innovation; and the competitiveness of industry and SMEs.
The fund is led by the Ministry of Economy, Trade and Enterprise. Project selection is performed with the input of the autonomous communities and cities, and of the FEMP. The EIB is the strategic partner for management of the fund.
In June 2024, the EIB and the Spanish Ministry of Economy signed the agreement to launch the Regional Resilience Fund and activate the first phase of available financing totalling up to €3.4 billion, including:
- a direct facility to co-finance EIB-supported operations in sectors such as renewable energy, clean transport and sustainable infrastructure
- an intermediated facility to be invested by financial intermediaries selected by the EIB, to support urban development and sustainable tourism projects
- two instruments intermediated by the European Investment Fund (EIF) that will facilitate SME financing in areas such as innovation, sustainability and competitiveness.
European Investment Bank
The EIB is the long-term lending institution of the European Union, owned by the Member States. It finances sound investments that further EU policy objectives. EIB projects bolster competitiveness, drive innovation, promote sustainable development, enhance social and territorial cohesion, and support a just and swift transition to climate neutrality.
The EIB Group – consisting of the EIB and the EIF – reported total financing signatures in Spain of €11.4 billion in 2023, approximately €6.8 billion of which went to climate action and environmental sustainability projects. The EIB Group signed a total of €88 billion in new financing in 2023.
Iberdrola and its commitment to sustainable financing and a carbon-free country
Electricity grids are the necessary platform to advance the electrification of the economy. They enable the integration of more renewables, the attraction of industry, sustainable mobility, smart cities, and self-consumption of electricity. Distribution grids are key infrastructure for these and other initiatives and trends that are changing the economy.
Iberdrola operates one of the most important electricity distribution systems in the world. The company already has more than 1.3 million kilometres of power lines and more than 4 500 substations in Spain, the United States, the United Kingdom and Brazil, which distribute electricity to more than 100 million people around the world.
Iberdrola is continuing to move forward with its sustainability strategy, which is based on electrifying the economy through clean energy, with a focus on combating climate change and creating wealth and jobs in the regions where it operates.
At the end of the third quarter of 2024, the company had green or sustainability-linked financing of more than €57 billion, including over €21.6 billion of green bonds.