Spain: EIB approves €700 million loan to support the extension of Naturgy’s electricity distribution network

The European Investment Bank (EIB) has approved a €700 million loan to support the extension and modernization of Naturgy’s electricity distribution network in Spain. The first tranche of the loan, totaling €500 million, has been signed in Madrid. The financed project will expand and modernise the electricity distribution network and improve the reliability and security of supply.

In addition to the connection of new users, the project will also facilitate the integration of renewable energy sources into the grid, accelerating the energy transition and advancing the decarbonization of the Spanish electricity sector. The financing will also support the modernization and digitalization of the network to increase its flexibility and operational efficiency. It is expected that a more modern and efficient distribution network will also contribute to the achievement of national and EU climate objectives.

The project underlines EIB’s commitment to economic, social, and territorial cohesion, as more than 75% of the total associated investment will take place in regions where per capita-income is less than 75% of the EU average such as Castilla-La Mancha, Castilla y León, Galicia and Andalucía. These regions will benefit also from the creation of 5,000 full time jobs during the implementation phase.

The €700 million loan approved is part of the EIB’s dedicated contribution to REPowerEU, and will support energy security by facilitating the integration of renewables and lowering EU dependency from fossil fuel imports. The financed project contributes also to the EIB’s Sustainable Energy objectives as stated in the Climate Bank Roadmap and to the national energy targets as set out in the Spanish 2030 National Energy and Climate Plan.

"Efficient and resilient electricity networks are a key component of the necessary transition to a more sustainable and reliable electricity system. We are pleased to strengthen our relationship with Naturgy to enhance the Spanish electricity distribution network” said EIB Vice-President Ricardo Mourinho Félix. “The connection of additional generation capacity from renewable sources will facilitate delivering of green energy to households and companies in Spain. Strengthening and modernizing our distribution networks is key to ensure the strategic autonomy of the EU within the critical energy sector.”

The EIB and energy security

In 2022, the EIB Group committed financing of more than €17 billion for the energy transition in Europe. Projects in Spain received a record €3.1 billion in financing commitments for sustainable energy and natural resources in the same year, making it the second largest beneficiary in the EU. These figures confirm the EU bank’s commitment to ensuring access to sustainable energy at a time of great uncertainty. Our investments are helping Europe weather the crisis triggered by the abrupt cut in gas supplies in the aftermath of Russia’s unjustified attack against Ukraine.

In July 2023, the EIB Board of Directors decided to raise the additional funds earmarked for projects aligned with REPowerEU, the plan designed to end Europe’s dependence on fossil-fuel imports, to €45 billion. The additional funding comes on top of the EIB’s already substantial support for clean investments and represents a 50% increase compared to the original €30 billion package announced in October 2022.  

The EIB Board also decided to broaden the scope of eligible sectors to boost financing for EU manufacturing in state-of-the-art strategic net-zero technologies and the extraction, processing, and recycling of critical raw materials. The additional funding will be deployed by 2027 and, in total, is expected to mobilize more than €150 billion in investment for the targeted sectors.

Find out more about the EIB’s support for the energy sector here.

The European Investment Bank Group (EIB Group), consisting of the European Investment Bank (EIB) and the European Investment Fund (EIF), reported total financing signatures of over €9.9 billion in 2022 in Spain, including record financing for climate action and environmental sustainability projects.