The funds will be used for investments in energy storage infrastructure in southwestern Spain, in line with EIB’s action plan to support the REPowerEU initiative to improve the EU’s energy security and to reduce dependence on fossil fuel imports.
The European Investment Bank (EIB) has signed two green loans totalling €108m with Iberdrola, which will be used to upgrade its Valdecañas pumped-storage hydroelectric complex in Cáceres, a city in Extremadura, one of 17 autonomous communities in Spain.
The EIB will provide the Spanish utility company with a €50m loan using its own funds. The remainder will come from the Regional Resilience Fund, set up by the Spanish government to invest a portion of the NextGenerationEU loans, predominantly in environmental and social projects in Spain’s autonomous communities.
The move is in line with the EIB’s plan to improve energy security in the EU and to reduce dependence on fossil fuel imports under its REPowerEU initiative, created by the European Commission to limit the bloc’s energy dependence on Russia following the 2022 invasion of Ukraine. The works at Valdecañas will also contribute to the EIB’s strategic priorities of climate action and cohesion, the organisation said.
Impact
The EIB loan will be used to modernise the pumping capacity of the Valdecañas hydroelectric complex, which includes two power plants, in order to boost energy supply and to integrate renewables, both parties said.
Iberdrola will enhance the plant’s pumping capacity by using the existing installations in the Valdecañas and Torrejón-Tajo reservoirs. This means the works can be completed without disruption to the current levels of operation of the plant and its existing transport networks, which reduces the impact on the environment.
The upgrade of the Valdecañas pumped-storage hydroelectric complex will directly create 165 jobs and a further 500 indirectly, which will boost skilled employment in an area where the per capita income is below the European average.
Once the works are completed, the plant will have 225 megawatts (MW) in total installed capacity, a 15 MW hybrid battery and 7.5 megawatt hour of stored energy. It will also help reduce CO2 emissions.
