Iberdrola, a prominent player in sustainable energy, announced that it has secured a €300 million loan from the World Bank, facilitated through its private sector investment arm, the International Finance Corporation (IFC). This €300 million loan, is intricately tied to Environmental, Social, and Corporate Governance (ESG) criteria and is earmarked for renewable projects in countries that depend on fossil fuels, including Morocco, Poland, and Vietnam.
A substantial portion of the committed funds, totalling €170 million, has already been allocated to support onshore wind energy projects in Poland. Additionally, both Iberdrola and the IFC are actively exploring collaborative opportunities to bolster innovative clean energy ventures in emerging nations, with a focus on offshore wind and green hydrogen generation.
The loan agreement hinges on achieving two strategic ESG targets. Firstly, Iberdrola is committed to slashing absolute direct and indirect greenhouse gas emissions by over 60% by 2030 compared to the 2020 baseline, encompassing Scopes 1, 2, and 3 emissions. The second objective is to more than double Iberdrola’s installed capacity by 2030, which at the end of the third quarter of 2023 exceeded 41,000 clean MW.
The loan is part of the collaboration signed in May last year to promote energy transition in emerging countries. At that time, a green loan linked to sustainability targets of $150 million (approximately €136 million) was signed to finance digitalisation and energy efficiency improvements in the electricity distribution networks operated by Iberdrola’s subsidiary in Brazil. Earlier, in 2022, IFC had already granted Neoenergia a loan for $115 million.
The IFC, boasting an AAA credit rating, serves as the World Bank Group’s private sector lending arm across more than 100 emerging nations. The institution is dedicated to enhancing these countries’ private sectors through investments in companies via loans, equity, and guarantees. IFC’s objective is to mobilize capital from various investors and provide guidance to companies and governments to stimulate private investment.
Iberdrola has consistently demonstrated leadership in sustainable finance. In December last year, the company secured its largest-ever credit line, amounting to €5.3 billion, with 33 banks. This financing agreement is linked to ESG objectives, showcasing Iberdrola’s steadfast commitment to environmental and social responsibility. The company’s issuance of green bonds in 2014 solidified its position as the first private group worldwide to engage in this financial strategy, and it currently boasts nearly €20 billion in outstanding green bonds.
José Sainz Armada, Iberdrola’s Director of Finance, Control and Corporate Development, said: “This loan will allow Iberdrola to continue contributing to the energy transition, decarbonisation and electrification in developing countries – which are still highly dependent on fossil fuels. It also consolidates IFC as one of Iberdrola’s major allies in providing financing for renewable projects.”
Alfonso Garcia Mora, IFC Vice President for Europe, Latin America and the Caribbean said: “This loan is a significant step in the global IFC-Iberdrola Energy Transition Partnership, which aims to support Iberdrola’s expansion and re-entry into emerging markets that need to decarbonise their energy matrix”. “We look forward to partnering with Iberdrola on projects that can accelerate a just and equitable transition to a low-carbon and sustainable energy future in developing and emerging markets.”