EDP and EIB sign €700 million in loans to rollout renewable energy projects and to finance power grid expansion in southern Europe
The projects involve developing projects in Portugal, Spain, and Italy and support the REPowerEU objective of building energy security and accelerating energy transition in the EU.
EDP and the European Investment Bank (EIB) signed two loans totalling €700 million to finance the rollout of EDP Renewables’ energy projects in Portugal, Spain and Italy and the expansion and modernization of EDP´s electricity distribution networks in Spain and Portugal.
A €500 million loan was signed as the first tranche of an approved €900 million green framework loan to boost renewable energy generation in Europe through the rollout of EDP Renewables’ solar photovoltaic and wind onshore plants in Portugal, Spain and Italy, with each country accounting for roughly a third of 1 943 MW total planned installed capacity.
The new installations will provide green energy equal to the average annual energy consumption of more than 1 million households. The operation contributes to EDP’s target to add 18 GW of renewable capacity by 2026. The project includes the roll-out of potentially 1,559 MW of photovoltaic capacity and 384 MW of wind onshore between 2024-2026.
A second €200 million loan was signed as the first tranche of an approved up to €800 million investment loan to finance the expansion, development and digitalization of EDP´s power grids in Spain and Portugal. The project will address the growth in demand and distributed renewable generation and improve the resilience of the distribution networks. Among other activities it will include the modernization of critical infrastructure, including the refurbishment and expansion of overhead lines and underground cables, upgrades to substations, transformers, and the implementation of digital solutions, such as smart meters. These actions will facilitate smarter energy management, reduce network losses and facilitate the integration of renewable energy sources.
These are two landmark projects that will accelerate the energy transition in Europe by leveraging the great potential of southern European countries for renewable energy generation and expanding network distribution.The financing operations contributes to EIB’s climate action goals and reinforces EIB position as the ‘The Climate Bank’, a top priority for the EIB Group as included in its 2024-2027 Strategic Roadmap. Associated investments will take place mostly in cohesion regions, where per-capital income is lower than the EU average, underlining EIB’s commitment to economic, social and territorial cohesion.
“These loans revive the long-term relationship between EDP and EIB and are totally aligned with the Group’s financial policy to extend the average maturity of its debt portfolio, reinforcing its financial flexibility”, stated Rui Teixeira, CFO of EDP Group. “EDP is a global leader in the energy transition. We were pioneers in renewable energy and are now one of the largest producers in the world through a diversified and resilient portfolio totalling 29.4 GW of installed capacity. EIB’s support will allow us to continue boosting renewables’ deployment, strengthen power distribution networks and delivering on our vision towards a more sustainable planet”, he added.
“The European Investment Bank is very pleased to support EDP in its efforts to scale up renewable energy production and expand network distributions in Europe”, said Nuno Ascenso PiresHead of EIB Portugal Lending Division. “These projects will help accelerate Europe’s green transition, which is a strategic objective for the European Union. The projects will also contribute to reduce Europe’s dependency on fossil fuel imports and strengthen its power grids and thus increase energy security.”
The loans are part of the EIB’s plan of action to back REPowerEU and will support energy security by boosting renewable energy generation and reducing the EU’s dependence on fossil fuels imports.
The EIB and energy security
In 2023, the EIB Group provided more than €21 billion in financing for energy security in Europe, financing projects in areas including renewable energy, energy efficiency, power grids and storage systems. These investments are contributing to REPowerEU and helping Europe speed up its transition to sustainable energy and reduce its reliance on fossil fuel imports.
In July 2023, the EIB Board of Directors raised the amount earmarked for REPowerEU projects to €45 billion. REPowerEU is the plan designed to end Europe’s dependence on fossil fuel imports. To boost financing for the EU manufacturing industry, the EIB will also expand the range of eligible sectors to include leading strategic technologies with net-zero carbon emissions, as well as extraction, processing and recycling of critical raw materials. The additional financing will be disbursed between now and 2027. In total, it is expected to mobilise more than €150 billion in investment in the target sectors.
Find out more about the EIB’s support for the energy sector here.