The European Investment Bank (EIB) and Iberdrola have agreed to two green loans totaling €108 million to modernize the Valdecañas hydroelectric complex located in the Extremadura region of western Spain. The goal of this financing is to increase energy storage capacity and support the integration of renewable energy into Spain’s electrical grid.
The financing includes a €50 million loan from the EIB’s own funds and another €58 million loan from the Regional Resilience Fund (FRR), a program managed by Spain’s Ministry of Economy. This project aligns with the EIB’s strategic priorities, particularly in combating climate change and fostering territorial cohesion, in connection with Spain’s Recovery, Transformation and Resilience Plan and the European Union’s REPowerEU programme.
Enhancement of storage and pumping capacity
The project will focus on improving the pumping capacity of the Valdecañas complex, which includes the Valdecañas and Torrejón power plants. Once completed, the installed capacity of the complex will reach 225 MW, with the addition of a 15 MW hybrid battery and 7.5 MWh of energy storage. This upgrade will allow the pumping capacity to increase to 313 MW and strengthen the Tajo system’s storage capacity to 210 GWh.
Economic and social impact
The works aim to secure energy supply and reduce CO2 emissions. The project is also expected to directly create 165 jobs and generate a further 500 indirectly, thus contributing to skilled employment in a region with a per capita income below the European average. Additionally, the infrastructure upgrades will be carried out with minimal environmental disruption by utilizing the existing facilities at the Valdecañas and Torrejón-Tajo reservoirs.
Support for Spain’s Resilience Plan
This financing, supported by the FRR, aligns with the objectives of Spain’s Resilience Plan, which directs funding from the NextGenerationEU programme to environmental and social projects in Spain’s autonomous communities. The project also supports the EIB’s commitment to the REPowerEU initiative, aimed at improving energy security in the European Union.
