Endesa, a Spain-based electric utility company, has signed sustainability-linked financing agreements worth €500 million (~$545.7 million) with Instituto de Crédito Oficial (ICO), a state-owned bank in Spain and the European Investment Bank (EIB) to finance the development of its 4.8 GW of renewable energy portfolio in the country.

A part of the financing operation totaling €300 million (~$327.4 million) from ICO will support the ongoing construction of at least 20 solar projects with a capacity of 2.35 GW and eight wind farms with a capacity of 550 MW— started by Endesa in 2021.

A loan tranche of €200 million (~$218.3 million) provided by EIB will complete the framework loan approved by the bank to bolster Endesa’s clean energy expansion plan, totaling €700 million (~$764.1 million) in financing.

Endesa will utilize the framework loan to co-finance commercial-scale solar and wind projects across Spain and the transmission infrastructure required for interconnection to the power grid. The projects involve a series of renewable assets within a portfolio comprising 16 commercial-scale solar projects with 1.5 GW capacity and eight onshore wind energy projects with 400 MW capacity.

The two financing operations are expected to help Endesa meet its Scope 1 direct greenhouse gas emissions reduction target, the achievement of which will also be certified by an independent third party— The Spanish Association for Standardization and Certification (AENOR).

Endesa CEO José Bogas said, “This sustainability-linked loan will help us adhere to the Law on Climate Change and Energy Transition, as well as Spain’s National Integrated Energy and Climate Plan (PNIEC 2021-2030). It will also be in line with the European Union’s Fit for 55 legislative package, which will make Europe the first carbon-neutral continent by 2050.”

Endesa has a long-term relationship with the EIB and the ICO for sustainability-linked financing operations. The joint financing to Endesa is also expected to accelerate the energy transition while contributing to REPowerEU, the European Union’s plan designed to strengthen Europe’s energy autonomy.

EIB Director of Operations in Spain and Portugal Gilles Badot commented, “Many of the Endesa solar and wind energy projects we are financing are also located in cohesion regions, meaning we are promoting equitable growth and convergence between the EU regions, which is one of the key aims of the EIB’s cross-cutting policy objectives.”

ICO promotes the financing of renewable energy projects that boost the green transition. In the last two years, the Spanish bank has approved over €2 billion (~$2.17 billion) in financing for renewable energy projects promoted by Spanish companies, such as solar plants, wind farms -both onshore and offshore-, hydrogen and biomass infrastructures, and energy efficiency and energy saving projects.

ICO Chairman José Carlos García de Quevedo said: “The projects Endesa will develop using the financing signed today will move us forward on the path to decarbonization, generating positive environmental and social impact.”

Last November, Saint-Gobain inked an 11-year power purchase agreement with Endesa to supply 150 GWh of renewable energy annually.

Recently, Spain-based Iberdrola and EIB signed a loan agreement worth €1 billion (~$1.07 billion) to support the energy transition in Europe by constructing 22 clean energy projects with an installed capacity of 2.2 GW.