The European Investment Bank (EIB) has agreed to lend €450 million (~$485 million) to Portugal-based energy company Redes Energéticas Nacionais (REN) for renewable energy integration and upgradation of the transmission network.

This financing will contribute to REN’s five-year investment program, which aims to increase the efficiency of Portugal’s electricity transmission network to integrate 4.2 GW of new renewable energy sources by 2026. It would also enable REN to maintain the reliability and quality of the electricity supply.

The upgradation would include extension, refurbishment, and modernization of lines, substations, and control and protection systems. Around 10% of the program is dedicated to improving the network’s resilience to climate change events.

The program is geographically dispersed throughout mainland Portugal, and most of the investments are expected to be in areas designated as EU cohesion regions, which affirms the EIB’s commitment to supporting the convergence of living standards and equitable, sustainable growth across the Union.

“We are extremely pleased to have EIB supporting our commitment to the energy transition. REN is at the core of that movement, and this green loan will help us to do more and better in an increasingly complex energy system,” said Rodrigo Costa, CEO of REN.” It will reinforce our investment capacity and accelerate the development of new grid projects that will further enhance the use of renewable energy. These projects are part of a pan-European effort that is vital if we want to successfully address the climate change threats.”

The green loan committed by the EIB is part of the wider REPowerEU Plan to boost green energy and support the EU’s autonomy and competitiveness.

The EIB contribution of €30 billion (~$32 billion) to REPowerEU is expected to mobilize over €115 billion (~$ 123 billion) of additional investment by 2027 in support of green technologies and Europe’s energy independence.

The European Commission also proposed a major reform of the EU’s electricity market design to accelerate the adoption of renewable energy and phase out gas. The reform aims to incentivize longer-term contracts with non-fossil power production and bring more clean, flexible solutions such as demand response and storage.

The European Commission recently presented the REPowerEU Plan proposal detailing its strategy to respond to the hardships and global energy market disruption caused by Russia’s invasion of Ukraine.