Renewable Energy Finance: Endesa secures $547mn loan to accelerate its renewable energy buildout in Spain

Deal details: The sustainability-linked financing comprises $328mn provided by Instituto de Credito Oficial (ICO) and $219mn from the European Investment Bank (EIB). The funding from ICO will contribute to the development of a portfolio of 20 solar PV plants with a combined capacity of 2.35 GW, as well as eight wind farms with a total capacity of 550 MW. Meanwhile, the capital obtained from EIB forms part of a larger $766mn framework loan approved by the bank to support Endesa's expansion plans in renewable energy. The move will enable Endesa to co-finance a significant portion of 16 commercial-scale solar PV projects totaling 1.5 GWp, and eight wind energy projects totaling 400 MW. Additionally, the funds will be utilized to construct the necessary transmission infrastructure for grid interconnection. This agreement follows a similar financing arrangement under which Iberdrola secured ~$1bn from EIB to support renewable energy projects in the country.

Deal rationale: The financing is in line with Endesa’s recently announced 2023-2025 Strategic Plan, under which it aims to increase solar and wind capacity by more than 4.4 GW, reaching ~14 GW by 2025. The company will primarily rely on organic expansion, leveraging its extensive development pipeline of over 15 GW comprising early and mature projects. To support these ambitions, Endesa plans to invest around $9.4bn during this period, with 50% of the funds dedicated to renewable energy project development. This strategy is part of the company’s broader objective of achieving complete decarbonization by 2040, including the phasing out of coal and gas electricity production, as well as exit from the retail gas marketing business.

The above analysis is proprietary to Enerdatics’ energy analytics team, based on the current understanding of the available data. The information is subject to change and should not be taken to constitute professional advice or a recommendation.

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