The European Investment Bank (EIB) has approved a €700m loan to Iberdrola to expand its electricity distribution network in Spain.

The total investment for the network expansion project is estimated at €1.44bn, with Iberdrola contributing the remaining €740m.

The project’s objectives include improving the efficiency and resilience of the electricity distribution network, facilitating new electrification applications such as heat pumps and electric vehicles, and integrating more renewable energy into the grid.

The enhancements will expedite the energy transition and further the decarbonisation of Spain’s electricity sector.

This financial support is part of the EIB’s efforts to back the REPowerEU plan, aiming to enhance energy security by promoting the integration of renewable sources and reducing the EU’s reliance on fossil fuel imports.

EIB EU operations director general Jean-Christophe Laloux stated: “Supporting the modernisation of electricity grids to facilitate the integration of new renewable energy sources is one of the EIB’s priorities included in its Climate Bank road map.

“This new financing agreement with Iberdrola will accelerate Spain’s energy transition, ensure access to sustainable energy for all citizens and contribute to the EU’s energy and strategic autonomy.”

Iberdrola chief finance, control and corporate development officer José Sainz Armada stated: “Thanks to this loan, the company will be able to accelerate the decarbonisation of industry – a key process for Spanish companies.

“With this new EIB financing, we are furthering the development of smart grids in Spain, which are essential for facilitating the energy transition, boosting efficiency and improving the distribution network and the quality of supply. We are also helping to electrify the economy and reduce the country’s energy dependence.”

In June 2023, Iberdrola secured a €1bn loan from the EIB to accelerate the energy transition in Europe.

In a related development, Export Finance Norway (Eksfin) has extended a €525m loan to Danish offshore wind developer Ørsted.

This funding will facilitate the acquisition of two transformer platforms from Aibel for Ørsted’s Hornsea 3 offshore wind farm in the UK.

Eksfin’s commitment to offshore wind financing now approaches €3.5bn. Hornsea 3 is poised to generate 2.9GW of clean electricity from 2027, sufficient to power three million homes with clean energy.