Spain: EIB and Naturgy agree a €1 bn loan to invest in solar energy and onshore wind projects

This article is published in association with European Investment Bank.

• EIB and Naturgy sign €400 million initial tranche of the total approved €1 bn loan.
• The loan will finance the set up new renewable power stations, as well as modernising and converting existing ones into hybrid facilities.
• When complete, the project is expected to generate enough green energy to power over 1,150,000 homes for a year, based on estimated average consumption.
• Most of the investment associated with the project will take place in regions with per capita income below the EU average, contributing to cohesion objectives.
• This operation contributes to achieving the REPowerEU plan’s objective of increasing the EU’s energy security and accelerating the energy transition. 

The European Investment Bank (EIB) and Naturgy have agreed a €1 bn loan to support investments in new solar energy and onshore wind power stations, as well as to modernise and convert existing sites into hybrid facilities in Spain. A €400 million initial tranche of the total agreement was signed in Madrid. The loan will also be used, to a lesser extent, for investments in batteries for renewable energy storage.

This investment will increase renewable energy generation capacity in Spain by 2.3 GW, thus contributing to the country’s energy transition and to the EIB Group’s wider climate action and environmental sustainability goals. It is estimated that once completed the project will generate enough green energy to power over 1,150,00 homes for a year, based on approximate average consumption.

The agreement was signed by EIB Director General and Head of EU Lending and Advisory Jean-Christophe Laloux and Executive Chairman of Naturgy Francisco Reynés.

“This important financing agreement with Naturgy reflects the EIB’s strong commitment to supporting Europe’s energy transition,” highlighted EIB Director General and Head of EU Lending and Advisory Jean-Christophe Laloux. “When complete, this project should generate enough green electricity to power more than 1 million homes, contributing also to our energy security and strategic autonomy.”

Executive Chairman of Naturgy Francisco Reynés said, “the financing agreement we have signed with the EIB once again demonstrates and validates our commitment to the energy transition and to advancing the decarbonisation of the Spanish economy. I would like to highlight the work done by Naturgy’s finance team led by Steven Fernández to reach this agreement. The implementation of these investments will also enable the creation of thousands of jobs in what is known as ‘empty Spain’, which will result in greater territorial cohesion in Spain”.

The project highlights also the EIB’s commitment to economic, social and territorial cohesion, as most part of the investments associated will take place in cohesion regions where the per capita income is below the EU average. It is expected that the project will create 4 200 jobs during the implementation phase.

The €1 billion loan is also part of the EIB’s action plan to support the REPowerEU plan to increase energy security and accelerate the energy transition.

The EIB and energy security

In 2023, the EIB Group signed more than €21 billion in financing for energy security in Europe. In the same year, it allocated €4.513 billion to this goal in Spain, financing projects in areas including renewable energy, energy efficiency, power grids and storage systems. These investments are 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.

Background information

EIB

The European Investment Bank (ElB) is the long-term lending institution of the European Union, owned by its Member States. It finances investments that further EU policy objectives. EIB projects bolster competitiveness, drive innovation, promote sustainable development, enhance social and territorial cohesion, and support a just and swift transition to climate neutrality.

The European Investment Bank Group (EIB Group), consisting of the European Investment Bank (EIB) and the European Investment Fund (EIF), reported total financing signatures in Spain of €11.4 billion in 2023, approximately €6.8 billion of which went to climate action and environmental sustainability projects. In total, the EIB Group signed €88 billion in new financing in 2023.

Naturgy

Naturgy has been working for 180 years in the energy sector thanks to a business model that has been able to adopt the social, technological and economic changes that have taken place in the world. Its success in the face of the challenges and opportunities of the environment is the result of a business management that is resilient to the different contexts of history and a transforming culture that cares about people’s day-to-day lives. The company is aware of the global challenge posed by the fight against climate change and has therefore transformed and reoriented its business towards energy transition through a strategy based on the promotion of renewable energies and gases and a sustainable business model that contributes to the social and environmental challenges facing humanity.

Naturgy is present in more than 24 countries, supplies gas and electricity to nearly 16 million customers, reaching market shares of gas and electricity contracts in Spain of 44.3% and 14.6% respectively, with an installed capacity of nearly 18 GW and a diversified mix of electricity generation. It operates in the regulated and deregulated gas and electricity markets, with a significant contribution from international activity, mainly in the areas of gas and electricity distribution; electricity generation and supply; and gas infrastructure, supply and marketing.