The Diplomat
Iberdola and the World Bank, through its private sector investment arm – the International Finance Corporation (IFC) – have signed a loan linked to ESG (environmental, social and corporate governance) criteria of 300 million euros for renewable projects in countries dependent on fossil fuels, such as coal, including Morocco, Poland and Vietnam, according to the company.
Specifically, of the agreed amount, 170 million euros will be used to finance onshore wind energy projects in Poland.
In addition, both institutions continue to analyze collaboration options to support the development of new innovative clean energy projects in emerging countries, such as offshore wind generation and green hydrogen, Europa Press reports.
This new operation between Iberdrola and the World Bank is part of the alliance signed in May of last year to promote the energy transition in emerging countries. Then, a green loan linked to sustainability objectives of 150 million dollars (about 136 million euros) was formalized to finance digitalization and energy efficiency improvements in the electrical distribution networks operated by the Brazilian subsidiary of Iberdrola. Previously, in 2022, IFC had already granted Neoenergía a loan for 115 million dollars (about 105 million euros).
The current loan is subject to the fulfillment of two strategic ESG objectives for the group, such as the reduction of the company’s absolute, direct and indirect, greenhouse gas emissions by more than 60% by 2030 compared to the baseline. 2020, including scopes 1, 2 and 3, from company operations, customers and supply chains; as well as more than doubling Iberdrola’s installed capacity by 2030, which at the end of the third quarter of 2023 exceeded 41,000 clean megawatts (MW).
The director of Finance, Control and Corporate Development of Iberdrola, José Sainz Armada, highlighted that this loan will allow the energy company to “continue contributing to the energy transition, decarbonization and electrification of developing countries, still very dependent on fossil fuels.” . “In addition, it consolidates IFC as one of our great allies in the financing of renewable projects,” he added.
”This loan is a significant step in the IFC-Iberdrola global Energy Transition Alliance, which aims to support Iberdrola’s expansion and re-entry into emerging markets that need to decarbonize their energy matrix,” stressed the vice president for Europe, America Latina and the Caribbean from IFC, Alfonso García Mora.
”We look forward to partnering with Iberdrola on projects that can accelerate a fair and equitable transition towards a low-carbon and sustainable energy future in developing and emerging markets,” he added. Last December, Iberdrola signed the largest credit line in its history for 5.3 billion euros with 33 banks at prices similar to those of 2019 and with a cost linked to compliance with a series of ESG objectives.
IFC’s relationship with Iberdrola dates back to 1998 with the financing of Iberdrola subsidiaries in Bolivia. The group chaired by Ignacio Sánchez Galán has established itself as a global benchmark in sustainable financing, being the first global private group to issue green bonds, after becoming the first Spanish company to issue a bond of these characteristics in 2014. Currently, the group has almost €20 billion of live green bonds.
For its part, IFC, with a ‘AAA’ credit rating, is the arm of the World Bank Group that finances the private sector in more than 100 emerging countries, with the aim of improving their own private sectors by investing in companies through loans, capital and guarantees. Last year, the organization committed a record 43.7 billion dollars (40 billion euros) to private companies and financial institutions in developing countries.
