Iberdrola has obtained a €400m ‘green’ loan, the largest ever granted by Spain’s Instituto de Credito Oficial (ICO).
The funds will be invested in the 1158MW Tamega pumped hydro power scheme being built in northern Portugal, which will also serve to integrate more wind and solar into the grid.
The transaction was signed by the company’s chairman, Ignacio Galan, and ICO chairman, Jose Carlos Garcia de Quevedo, at Iberdrola’s corporate headquarters in Madrid.
Tamega project comprises three new power plants which will increase Portugal’s total installed capacity by 6% and will supply hydro-electricity to 440,000 Portuguese homes.
The power plants will be erected over the Tamega river, a tributary of the Duero, close to Oporto. They will start operating in 2021, 2022 and 2023.
Around 880MW of the project’s capacity is based on pumped storage technology, a form of energy storage, which will facilitate the integration of renewables in the Iberian electrical system.
Today’s agreement, and the loan signed with the European Investment Bank last summer, secures financing for the Tamega pumped hydro power scheme, whose construction entails total investment of more than €1.5bn.
Tamega also includes a significant sociocultural and environmental action plan supported with €50m by Iberdrola, which is being implemented in collaboration with the region’s municipalities.
The purpose of the plan is to develop the area while improving living standards.
It is estimated that during the construction of the hydroelectric complex, a total of 3500 direct jobs and 10,000 indirect jobs will be created, and the local environment will be protected.
The programme includes an archaeological project to recover the Roman gold mine of Tresminas.
With a €1.84m investment, Iberdrola is collaborating with the Vila Pouca de Aguiar Council and the North Portugal Regional Department of Culture in the restoration of the region’s historical, archaeological and heritage sites.
Independent agency VigeoEiris certified the loan, verifying that the project to be financed complies with the Green Loan Principles. In its certification, VigeoEiris also assessed Iberdrola’s environmental, social and governance performance.
As part of its global strategy, the ICO Group has included sustainability criteria in the development of its activity.
The ICO’s recent first green bond issue for €500m is being used to finance activities, investments and projects of Spanish companies that contribute to the protection of the environment and address climate change.