The European Investment Bank (EIB) has agreed to provide a loan of €300m ($337.67m) to Banco Santander to support the use of renewable energy in Brazil.

The loan will enable Banco Santander Brasil, the Brazilian unit of the Spanish bank, to install a series of mainly rooftop, small-scale, self-consumption solar photovoltaic plants across the country, with a total capacity of 600MW.

Homes and small and medium-sized businesses will be encouraged to install the solar plants.

This project is part of the EU’s Global Gateway investment strategy to support infrastructure and bring global and regional connectivity across sectors such as digital, climate, transport, health, energy and education.

The Global Gateway strategy is aimed at reducing the effects of climate change.

It will also allow the country to reach its goals to increase the share of renewable energy sources for electricity generation and achieve its ten-year national energy expansion strategy.

The low-carbon nature of the project will contribute to a reduction in carbon emissions and overall air pollution.

EIB vice-president Ricardo Mourinho Félix stated: “I am very pleased to announce this project with Banco Santander (Brasil) that will enable private sector investments in renewable energy, reduce carbon emissions and air pollution, and support additional renewable generation capacity in Brazil.

“This operation under EIB Global, the arm of the EIB created in 2022 for activities outside the European Union, builds on our global climate engagement and our support for climate action in Brazil over the last three decades.”

EIB further stated that the agreement will bolster its role as a global climate bank, with almost 80% of its total funding to Latin America in 2022 tied to climate action.

It will also support Santander’s climate strategy of becoming a net-zero organisation by 2050.