The European Investment Bank has agreed to a €200 million loan facility with Spanish utility Iberdrola to invest in clean energy projects in Spain and the UK.
Iberdrola will use the funds to make smart grids more efficient and bolster clean energy generation capacity, the company said in a statement. The loan has a six-year maturity.
The power group, which has over 14GW of installed renewables capacity, added that it plans to commit 33 percent of its overall investments from its 2015-2018 Innovation Plan to clean energy projects.
Iberdrola's loan follows other moves earlier this year to focus the company's strategy more on renewable energy and specific geographies. In April, Iberdrola raised €1 billion through 10-year green bonds at a coupon rate of 1.125 percent. It also sold 245MW of wind energy assets in Italy to target investments in the UK, the US, Mexico and Spain.
Since the 1980s, EIB has been one of Iberdrola's biggest sponsors for clean energy projects. One of its largest commitments materialised last summer, when the bank lent the energy company €325 million to help it install 3.2 million smart metres and upgrade Spain's power grid.
Development banks like EIB have been critical to getting the private sector investing in the clean energy sector. A report earlier this month said $81 billion was mobilised by the world’s six largest multilateral development banks in 2015 for climate finance.
The document, jointly prepared by the Asian Development Bank, EIB, the African Development Bank, the European Bank for Reconstruction and Development, the European Investment Bank, the Inter-American Development Bank Group and the World Bank, said that DFIs' aggregate $25 billion commitment over the period has helped catalyse $56 billion from other investors towards green projects.
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