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Iberdrola Secures EUR 300 Million Loan from World Bank's IFC for Green Energy Projects

The funds are earmarked for renewable initiatives in countries transitioning from fossil fuels, including Morocco, Poland, and Vietnam.

January 10, 2024. By Abha Rustagi

Iberdrola has garnered further support from the World Bank's private sector investment arm, the International Finance Corporation (IFC). Both entities have inked a EUR 300 million loan agreement tied to Environmental, Social, and Corporate Governance (ESG) criteria.

The funds are earmarked for renewable initiatives in countries transitioning from fossil fuels, including Morocco, Poland, and Vietnam.

A substantial portion of the committed amount, EUR 170 million, has already been allocated to finance onshore wind energy projects in Poland. The collaboration extends beyond this, as the institutions explore avenues for joint efforts in advancing innovative clean energy ventures in emerging countries. Areas of focus include offshore wind projects and the generation of green hydrogen.

The loan is contingent on Iberdrola meeting two strategic ESG targets. The first objective is to achieve a more than 60 percent reduction in the company's absolute direct and indirect greenhouse gas emissions by 2030 compared to the 2020 baseline. This reduction encompasses Scopes 1, 2, and 3 emissions from the company's operations, customers, and supply chains.

The second goal involves more than doubling Iberdrola's installed capacity by 2030, which already exceeded 41,000 clean megawatts by the end of the third quarter of 2023.

This financial arrangement is part of a broader collaboration initiated in May of the previous year, aiming to facilitate the energy transition in emerging countries. In that initial agreement, a green loan of USD 150 million was secured to enhance digitalization and energy efficiency in the electricity distribution networks operated by Iberdrola's Brazilian subsidiary.

José Sainz Armada, Iberdrola's Director of Finance, Control, and Corporate Development, expressed, "This loan will allow Iberdrola to continue contributing to the energy transition, decarbonisation, and electrification in developing countries – which are still highly dependent on fossil fuels. It also consolidates IFC as one of Iberdrola’s major allies in providing financing for renewable projects."

Alfonso Garcia Mora, IFC Vice President for Europe, Latin America, and the Caribbean, emphasized the significance of the loan as a step in the IFC-Iberdrola Energy Transition Partnership, working towards a just and equitable shift to a low-carbon and sustainable energy future in developing and emerging markets.

Tags:

Onshore wind projects

Green hydrogen

Alfonso Garcia Mora