The European Investment Bank (EIB) has lent Spanish electricity utility Iberdrola €500m to develop and expand smart electricity grids, facilitating renewable energy integration and industry connection.

This is the first project financed by the Regional Resilience Fund, a fund launched by the Spanish Ministry of Economy, Trade & Enterprise to invest part of EU loans in environmental and social projects.

The Regional Resilience Fund channels financing from Spain’s Recovery, Transformation & Resilience Plan within the EU to boost environmental and social investments. The EIB manages the fund.

The electricity project financed will improve the efficiency and resilience of the power grid, allow the electricity to be put to new uses – such as heat pumps and electric vehicles – and enable more renewable energy sources to be connected to the grid, speeding up the energy transition and its positive impacts in energy security and autonomy as well as the decarbonisation of the Spanish electricity sector.

A €700m loan had already been approved from EIB’s own funds to finance the project. This financing has now been supplemented by an additional €500m loan from the Spanish Recovery Plan channelled by the EIB through the Regional Resilience Fund. This is the first operation with a private entity financed by the Regional Resilience Fund under the direct facility launched by the EIB in June this year to co-finance projects in sectors such as renewable energy, clean transport and sustainable infrastructure.

The director general of International Financing of the Spanish Treasury, Inés Carpio, stressed the importance of the Regional Resilience Fund “to continue promoting the modernisation and transformation of the productive sector and the Spanish economy through the recovery plan, with a clear focus on energy transition and efficiency”.

Antonio Lorenzo, head of the EIB’s corporate finance division in Spain, added: “We are very pleased to sign the first financing from the Regional Resilience Fund for the expansion and development of Iberdrola’s electricity grids in Spain. This is a key project for the development of smart grids that will enable the integration of renewable energies into Spain’s electricity system, with an impact on 12 autonomous communities.”

The project will also provide a boost for industrialisation, economic growth and job creation in Spain, maintaining 10,000 jobs per year in 12 autonomous communities throughout the implementation period.

The financing arrangement underscores the commitment of the EIB and the Spanish Ministry of Economy, Trade & Enterprise to economic, social and territorial cohesion, with over 65% of the total investment going to regions where income per capita is below the EU average.

“With this financing, Iberdrola will be able to speed up the development of the distribution network in Spain over the coming years, which is so necessary for serving and connecting Spain’s industry and businesses,” said José Sainz Armada, chief financial officer at Iberdrola (www.iberdrola.com). “With this new EIB financing we are expanding the development of smart grids, which are essential for facilitating the energy transition, boosting efficiency and improving the distribution network and the quality of supply. We are also contributing to the electrification of the economy and to reduce the country’s energy dependence.”