Portuguese utility EDP has secured €700 million in loans from the European Investment Bank (EIB) to support the development of over 1.9GW of renewable energy capacity and distribution grid improvements in Spain, Portugal and Italy.
The first, larger loan of €500 million will support EDP’s development plans for solar PV and onshore wind power projects in Spain, Italy and Portugal. Each country will host around one third of EDP’s planned 1.943GW portfolio. The loan was issued as the first tranche of an agreed €900 million green framework loan from the EIB.
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EDP said the project will contribute up to 1.6GW of solar PV and 384MW of wind projects to its aim to add 18GW of new renewable energy capacity by 2026.
The second, €200 million loan will aid the utility in expanding, developing and digitising its power grids in Spain and Portugal. As power demand grows and Europe pursues greater electrification, distribution networks need to be more resilient and expansive. Grids are widely acknowledged as one of the major barriers to the energy transition in the developed world.
EDP said its plans will include “the modernisation of critical infrastructure, including the refurbishment and expansion of overhead lines and underground cables, upgrades to substations, transformers, and the implementation of digital solutions, such as smart meters.”
A report from consultancy DNV earlier this month said that congestion in the transmission grid would pose a roadblock to renewable energy development in Spain in the near term. However, the report said that financial commitments, expansion and technological developments would reduce congestion in the long term through 2050.
The second loan is also the first tranche of a larger framework agreement – an €800 million investment loan.
Rui Teixeira, CFO of EDP Group said: “These loans revive the long-term relationship between EDP and EIB and are totally aligned with the Group’s financial policy to extend the average maturity of its debt portfolio, reinforcing its financial flexibility.”
Earlier this month, EDP commissioned a 103MW solar PV portfolio in Italy. This marked a step on the company’s path towards greater solar PV capacity development, having traditionally focused more on wind power.
