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The International Finance Corporation (IFC) has today unveiled a green and sustainability-linked loan (SLL) of €300 million to Iberdrola.
This funding is earmarked for renewable energy projects in developing nations, focusing on countries heavily reliant on coal, including Morocco, Poland, and Vietnam. A first tranche of €170 million has already been allocated by IFC, specifically for onshore wind projects in Poland.
This green loan aligns with Iberdrola’s Green Financing Framework, while the SLL is structured around two challenging corporate sustainability performance objectives, in harmony with Iberdrola’s Climate Action Plan.
Iberdrola’s first goal is a substantial reduction in its direct and indirect absolute greenhouse gas emissions, aiming for over a 60% cut by 2030 from 2020 levels. This target encompasses scope 1, 2, and 3 emissions, which include the company’s operations, customers, and supply chains.
Iberdrola stands out as one of the few energy firms worldwide to embrace such an extensive emissions target, with a trajectory endorsed by the Science Based Target initiatives (SBTi) to be in line with capping global warming at 1.5⁰C.
The second objective involves more than doubling Iberdrola’s renewable energy capacity by 2030, a significant aim considering the company’s 41+ GW of installed renewable capacity as of September 2023.
Iberdrola, a global frontrunner in renewable energy and sustainable finance, is among the world’s largest utilities in terms of market capitalisation and operates across the entire energy value chain. Its operations extend into regions where the IFC has a presence, including Europe, Latin America, Asia, and Africa.
Alfonso García Mora, Vice President for Europe, Latin America, and the Caribbean at IFC, 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 in need of decarbonizing 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.”
The partnership also includes exploring collaborations between Iberdrola and IFC in early-stage project development in novel energy solutions, such as offshore wind and green hydrogen.
José Sainz Armada, Iberdrola’s Director of Finance, stated, “This loan will allow Iberdrola to continue contributing to the energy transition, decarbonization and electrification of developing countries, which are still highly dependent on fossil fuels. It also consolidates IFC as one of our major allies in the financing of renewable projects.”
The loan announcement follows two previous green and sustainability-linked loans granted to Iberdrola subsidiaries, including a $155 million loan to Neoenergia Elektro in May 2023 and a $115 million loan to Neoenergia Coelba in July 2022. These loans from IFC supported network expansion and digitalisation efforts in Brazil.
As of December 2023, IFC’s investment in sustainable finance in infrastructure has surpassed $6.2 billion, including $3 billion in sustainability-linked financing for infrastructure companies in emerging markets.