Spain-based independent power producer Iberdrola and the European Investment Bank (EIB) have signed a loan agreement worth €1 billion (~$1.07 billion) to bolster the energy transition in Europe by building 22 renewable energy projects with an installed capacity of 2.2 GW.

The loan will help co-finance the construction of 19 solar power projects and three onshore wind farms in Spain, Portugal, and Germany.

Iberdrola plans to execute solar-wind hybrid projects with the battery energy storage system to ensure grid stability and round-the-clock power.

The new installations will generate sufficient energy to power more than 1 million households with electricity annually, with 70% of the projects deployed in rural areas, areas affected by the industrial transition to net zero and cohesion regions.

A part of EIB’s financing package supports the European Union’s REPowerEU plan; the collaboration will accelerate Europe’s efforts to completely cut dependence on fossil fuel imports while boosting supply security.

The new clean projects will also support the national energy plans of Spain, Portugal, and Germany while helping Iberdrola achieve its 2040 net zero emissions target.

The financing will help Iberdrola to strengthen its position on sustainable funding with over €48 billion (~$52 billion) in ESG operations signed, of which €17.6 billion (~$19 billion) are in green bonds.

EIB’s Vice-President Ricardo Mourinho Félix said, “This is a strategic objective for the European Union and the EIB that will not only contribute to climate change mitigation but also to the EU’s energy security and strategic autonomy. As the horrific war in Ukraine has shown, sustainable energy and energy security are two sides of the same coin. To achieve them both, it is vital that we collaborate with companies in the European energy sector, such as Iberdrola.”

Iberdrola and the sovereign fund of Norway recently committed to a joint investment of €1.2 billion (~$1.3 billion) to develop 1.2 GW of new renewable energy capacity in Spain.

In March this year, the European Parliament and the Council provisionally agreed to raise the EU’s binding renewable target to a minimum of 42.5% by 2030, up from 32%.