The European Investment Bank (EIB) and Iberdrola have agreed to increase the green loan signed in 2021 with a top up of €220 million ($215 million) to strengthen smart grids in Spain for renewable integration, energy efficiency and security of supply.

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The increased loan will support the development, modernisation and digitisation of the company’s electricity distribution networks, a project that will impact twelve Spanish regions.

The €220 million top-up brings the total EIB financing to around €820 million ($802 million), allocated to strengthen smart grids in Spain and contribute to the further electrification of the economy.

The project linked to the loan will improve the efficiency of the distribution network, characterised by automation and control, and will ultimately multiply the reliability and security of the electricity distribution grid.

With this loan, Iberdrola aims to safeguard around 10,000 jobs a year in Spain during the implementation period, according to the EIB’s estimates.

The agreement supports the smart grid investment plan being developed by i-DE, Iberdrola’s distribution company in Spain, which concludes in 2023 and involves a total investment of €1.8 billion ($1.76 billion).

Nature of the smart grid loan

The loan was announced in support of the EU Bank’s regional cohesion and development objectives, which give priority to promoting projects in less developed regions with a per capita gross domestic product (GDP) below the EU average. In this respect, 68% of the i-DE plan is being developed in those Spanish regions.

EIB Vice-President Ricardo Mourinho Félix said regarding the agreement: “The top-up of this facility is all the more important at a time of energy crisis. We at the EIB know that it is vital to boost electricity grids in order to see the growth of renewable energy, which is vital for ensuring security of supply and decarbonising the EU economy. The top-up of this green loan with Iberdrola is a further step towards this objective, and it also translates into economic growth and employment in Spain.”

The Chairman and CEO of Iberdrola, Ignacio Galán, explained that “the top-up of this green loan with the EIB will enable us to further develop Spain‘s smart grids, which are essential for facilitating the integration of renewable energy production, boosting energy efficiency and improving the distribution network and the quality of supply.

“This will speed up the transition to a more sustainable model, helping to provide greater energy self-sufficiency and security, which are so necessary at this critical time.”

The EU Bank is providing the financing through a Green Loan. The characteristics of this type of financing comply with the requirements defined in the EIB‘s Climate Awareness Bonds (CAB) programme.

The transaction is therefore eligible for allocation to its portfolio of lending operations financed through the issuance of CABs.