Close to 1.5 billion euros will go towards making Spanish electrical grid smarter

This became clear after a green loan agreement was signed between EIB and Iberdrola

On 27 July, it was announced that the European Investment Bank has signed an agreement with the Spanish energy utility company Iberdrola that will see the financial institution provide 550 million euros in green loans. The funds are meant to drastically update and boost the capability of the electricity distribution networks in several Spanish regions with the end result being the creation of smart and sustainable grids.

The investment will specifically target cohesion regions with higher than EU average unemployment rates

The figure cited, however, is only one part of a grand network investment plan that i-DE – Iberdrola’s Spanish distributor – is looking to develop until 2023 to the tune of 1.472 billion euros.

The implementation of this investment plan will drive the green recovery of the economy and employment, making it possible for around 10 000 jobs per year to be maintained in Spain during the implementation period, according to EIB estimates. In addition, a significant share of investments (68%) will be made in cohesion regions with unemployment rates significantly higher than the EU average.

The announcement emphasized that the goal was to create a smart grid, but what would that mean more specifically?

Reportedly, this can be illustrated as a three-pronged objective. For one, there is a need to meet handle growing electrical energy demand (due to increased usage of electric transport and air conditioning) and supply (thanks to more renewable energy sources). Then there is also the challenge posed by climate change, which requires the electrical infrastructure to be made more resilient. And last, it is essential to address the need for modernization in electricity distribution so as to make it more efficient and sustainable.

The EU bank is assisting this operation via a green loan, the features of which are fully in line with the requirements set out in its ‘climate awareness bonds’ programme. As a result, it is likely to be allocated to its portfolio of loan operations that are financed through the issuance of these bonds.

The Spanish government is also likely to look favourably on this deal since the increased electrification of the heating and mobility sectors correspond to the objectives set out in the country’s National Energy and Climate Plan.