Europe, Finance, Pumped Storage Hydro

Iberdrola receives green loan to finance 1,158-MW Tamega scheme in Portugal

Iberdrola announces it has received the largest ever green loan granted by Spain’s Instituto de Credito Oficial (ICO), amounting to €400 million (US$446 million) with 12-year maturity and two-year grace period for principal.

The transaction was signed May 30 by Iberdrola Chairman Ignacio Galan and ICO Chairman Jose Carlos Garcia de Quevedo.

The funds will be assigned to the Tamega pumped hydro power scheme being built in northern Portugal. Tamega, the “flagship project of the Iberdrola group,” entails an investment of more than €1.5 billion (US$1.67 billion) to build the 880-MW Gouvaes pumped storage, 114-MW Daivoes and 164-MW Alto Tamega hydro plants on the Tamega River. The three new power plants will increase Portugal’s installed capacity by 6%.

The Tamega project also includes a significant sociocultural and environmental action plan supported with €50 million (US$55.8 million) by Iberdrola, which is being implemented in collaboration with the region’s municipalities. The purpose is to develop the area while improving living standards. It is estimated that during the construction of the hydroelectric complex, a total of 3,500 direct jobs and 10,000 indirect jobs will be created, and the local environment will be protected.

The loan granted by ICO was certified by independent agency VigeoEiris, which has verified that the project to be financed complies with the Green Loan Principles. In its certification, VigeoEiris also assesses Iberdrola’s environmental, social and governance performance.

This agreement, and the loan signed with the European Investment Bank (EIB) last summer, secure financing for the Tâmega pumped hydro power scheme.

Iberdrola is continuing to add to its portfolio of renewable projects, to which it will allocate €13.3 billion (US$14.8 billion) during the 2018 to 2022 period.

Iberdrola was the first Spanish company to launch a green bond, in April 2014. The group has become the world’s leading corporate issuer, with total green bonds now exceeding €9.5 billion (US$10.6 billion). The company has also been a pioneer in taking out green loans. In February 2017, it signed the first green loan with BBVA for an energy company and in April 2018, in Mexico, the first operation of this type carried out in Latin America, amounting to €500 million (US$557.6 million) and US$400 million, respectively.