Norway’s sovereign wealth fund Norges Bank Investment Management has signed an agreement to acquire a 49% stake in Iberdrola’s upcoming renewable energy portfolio comprising nearly 1.3 GW of solar and onshore wind projects located in Spain.

Norges Bank will pay €600 million (~$649 million) for the stake in the portfolio valued at approximately €1.2 billion (~$1.3 billion). No external debt financing will be involved in the transaction.

The transaction is expected to be completed in the first quarter of 2023.

Spain-based power producer Iberdrola will remain the co-owner and operator of the portfolio with a 51% stake. It will control and manage the assets, providing operations and maintenance services, as well as other corporate services.

The portfolio comprises seven solar and five onshore wind projects with an installed capacity of 1,265 MW, equivalent to the annual electricity consumption of 700,000 Spanish households. Solar capacity makes up 80% of the portfolio, while onshore wind accounts for the remaining 20%.

Of the total capacity, currently, 137 MW are operational in Castilla-La Mancha and Aragón. The rest of the projects are in development in Andalusia (358 MW), Extremadura (343 MW), Aragón (175 MW), Castilla y León (102 MW), Madrid (55 MW), Murcia (50 MW) and Castilla La Marcha (45 MW).

Nine projects are currently under development and are expected to be completed in 2023-2025. Norges Bank will take ownership of these projects when they become operational.

Norges Bank Investment Management is also one of Iberdrola´s main shareholders, retaining a stake of more than 3% for over seven years.

Iberdrola has almost 19,500 MW of renewable energy capacity installed in Spain and will build 4,100 MW more by 2025.

Last November, Iberdrola announced an investment plan of €47 billion ($47.2 billion) for energy transition between 2023 and 2025. Of this, €17 billion ($17.08 billion) will be invested in renewables to deliver 52 GW of installed capacity by 2025.

Iberdrola also signed an agreement last year to supply 590 MW of solar power to American food and beverage corporation PepsiCo’s facilities in Spain and Portugal.

In 2021, Norges Bank Investment Management signed an agreement to acquire a 50% interest in the Borssele 1 & 2 offshore wind farm located in the Netherlands.