Spanish utility Iberdrola has been granted €300 million (US$328.7 million) by the World Bank’s private sector investment arm, the International Finance Corporation (IFC), to develop renewable energy projects in countries dependent on coal, including Morocco, Vietnam and Poland.
Iberdrola said that of the agreed amount, €170 million had already been committed to finance onshore wind projects in Poland.
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The loan is subject to the fulfilment of two environmental, social and corporate governance (ESG) objectives for Iberdrola. The first one is that Iberdrola needs to reduce its absolute direct and indirect greenhouse gas emissions by more than 60% by 2030 from the 2020 baseline across all three scopes of emissions.
The second objective is to more than double Iberdrola’s installed renewables capacity by 2030. As of the end of the third quarter of 2023, Iberdrola’s installed capacity reached 41.3GW. According to its financial result announcement for Q3 2023, even though onshore wind and hydropower account for more than half of the current installed capacity, solar PV represented 5.4GW of all renewables capacity for the utility.
The latest funding is part of an agreement signed in May 2023 to promote the energy transition in emerging markets. Aside from the latest plan to develop renewables projects in Poland, Vietnam and Morocco, IFC planned to provide Iberdrola with a loan of €138 million to finance digitalisation and energy efficiency improvements in the electricity distribution networks operated by Iberdrola’s subsidiary in Brazil, Neoenergia.
Both Iberdrola and the IFC are also considering supporting offshore wind and green hydrogen projects in additional emerging markets.
Alfonso García Mora, vice president for Europe, Latin America, and the Caribbean at IFC, said the latest loan can support Iberdrola’s expansion and re-entry into emerging markets in need of decarbonising their energy matrix.