NATURGY ELECTRICITY NETWORK MODERNISATION

The project will finance investments to modernise electricity distribution infrastructure throughout Spain during the 2022-2025 period.

The aim is to meet the demand growth, connect new network users and integrate renewables energy sources, while improving the quality of the service and efficiency of operations.

The investment programme concerns the extension and refurbishment of electricity distribution networks in Spain. The project is eligible under the EIB Energy Lending Policy and is consistent with the EIB Climate Bank Roadmap. It supports the Bank's Sustainable Energy public policy goal, in particular by contributing to secure the necessary enabling infrastructure. It will provide a significant contribution to Climate Action (climate change mitigation) in line with the applicable EU Taxonomy requirements and to the EU Economic, Social and Territorial Cohesion by investing in EIB Cohesion Priority regions.

EIB financing to the project will contribute to address market failures related to electricity and its distribution that may result in sub-optimal investments. These include negative environmental externalities and the need to ensure security of supply, which has valuable public-good attributes. The investment programme will enable the connection of new users, improve the reliability of supply and support further decarbonisation of the Spanish power mix.

The programme's overall economic viability is expected to be above the regulated financial rate of return. The promoter is an experienced utility operator of electricity distribution networks and has the necessary capacity to manage the implementation of the programme and operate the assets over the term of the loan. Overall, the project quality and results is expected to be very good.

The EIB financial contribution is valued by the client and considered very good as it offers more favourable and flexible conditions compared to market alternatives, in particular in terms of long availability period, flexible disbursements and long tenor. The promoter deems EIB financing as a stamp of quality on its investments and environment-related procedures, which helps attract investors and co-financiers and reinforces its recognition as a sustainability and climate-focused group.

The project includes components that may fall under Annex II of the Environmental Impact Assessment (EIA) Directive 2011/92/EU (amended by Directive 2014/52/EU), which requires the competent national authority to determine the need for an EIA. Typical impacts for some schemes might be visual or related to electromagnetic fields, noise nuisance and disturbances during construction. Potential impacts on protected fauna and flora (Habitats 92/43/EC and Birds 2009/147/EC) (e.g. vegetation clearance, collision and electrocution of flying vertebrates).

The EIB will require the promoter to ensure that contracts for implementation of the project have been and will be tendered in accordance with the applicable EU procurement legislation: Directive 2014/23/EU / 2014/24/EU / 2014/25/EU as well as Directive 92/13/EEC or Directive 89/665/EEC as interpreted by the Court of Justice of the EU, with publication of tender notices in the EU Official Journal, as and where required.