Deal details: Iberdrola intends to allocate the raised capital towards the establishment of 19 solar projects and 3 onshore wind farms, totaling 2.2 GW of capacity. These projects will be located across Spain and Portugal, where the company already boasts an impressive onshore wind and solar portfolio of ~20 GW. Additionally, Iberdrola aims to expand its presence in Germany by venturing into onshore renewable projects. The current financing builds upon a recent deal between the EIB and Iberdrola, under which the bank extended a ~$162mn loan to the Spanish IPP for the development of a 400 MW renewable energy capacity in Italy.
Deal rationale: The financing was granted as part of the substantial EIB ~$32bn financing package, which forms a crucial component of the REPowerEU initiative. This initiative was launched with the aim of reducing Europe's reliance on Russian gas. To support renewable investments across the continent, the initiative has introduced a significant budgetary guarantee of approximately ~$21bn. This guarantee not only facilitates renewable investments by the EIB but also encourages other financial institutions within Europe to participate. Consequently, there has been a notable increase in debt capital financings in Europe’s solar sector in 2023, with transactions reaching ~$6bn. This program plays a vital role in supporting renewable energy developers throughout Europe during a time when interest rates are on the rise, leading to an increase in the cost of capital across the continent.
For Iberdrola, the investment secured will provide the company with capital to drive the development of new project initiatives across Europe. These initiatives align with Iberdrola's ambitious objective of increasing its overall installed renewables capacity from 40 GW, as of the conclusion of 2022, to an impressive 60 GW by the end of 2025. To accomplish this target, Iberdrola has committed to investing approximately ~$41bn of capital over this timeframe.
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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