Iberdrola and the Norwegian sovereign wealth fund managed by Norges Bank Investment Management have unveiled plans to invest €2bn ($2.15bn) in renewable energy on the Iberian peninsula.

The investment will result in the addition of 1.3GW of renewable energy capacity over the three years to 2026.

The alliance has incorporated 674MW of wind and solar energy capacity, with plans to include the remaining capacity in the early months of 2024, culminating in a 2.6GW total.

Negotiations are under way to add 643.5MW of operational and developing solar PV [photovoltaic] capacity to the alliance’s portfolio.

The strategic partnership is a concerted effort to accelerate the decarbonisation process on the Iberian peninsula, with a possible future extension of the agreement to other countries.

Iberdrola will retain a majority stake of 51% in the assets.

Their entire 674MW capacity is now valued at €627m.

This does not account for additional margins related to asset management, operation, maintenance or other corporate services.

The renewable energy portfolio will generate enough electricity to power 400,000 homes annually, offsetting 350,000 tonnes of CO₂ emissions each year.

Iberdrola executive chairman Ignacio Galán stated: “Today we have expanded our clean energy alliance to advance the development of renewables in the Iberian peninsula in a faster, more consolidated and competitive way.

“Innovative agreements like this allow us to combine our knowledge in clean energy and our financial strength with those of Norges Bank Investment Management, a truly progressive partner, building on our alliance that has been growing for many years.”

In June 2023, Iberdrola and the Norwegian sovereign fund concluded their alliance to co-invest in aSpanish renewable energy portfolio with 1.26GW capacity, with scope for future extension.

The portfolio, which includes solar (80%) and wind (20%), is valued at €1.2bn.

The Spanish energy company will own 51% of the portfolio’s stake and the remaining 49% will be owned by the fund managed by Norges Bank Investment Management.