IBERDROLA GREEN ELECTRICITY DISTRIBUTION NETWORK

The project consists of the development and modernisation of the Promoter's electricity distribution network throughout several Spanish regions.

The overall purpose of the project is to expand and modernise the Promoter's electricity distribution network in order to maintain and improve current network security standards and enhance the quality of services and grid performance.

The investment programme concerns the extension and refurbishment of electricity distribution networks in Spain. The project is eligible under the EIB Energy Lending Policy and is consistent with the EIB Climate Bank Roadmap. It supports the Bank's Sustainable Energy public policy goal, in particular by contributing to secure the necessary enabling infrastructure. Also, the project contributes to the Bank's Climate Action and Cohesion transversal objectives.

EIB financing to the project will contribute to address market failures related to electricity and its distribution that may result in sub-optimal investments. These include negative environmental externalities and the need to ensure security of supply, which has valuable public-good attributes. The investment programme will enable the connection of new users, improve the reliability of supply and support further decarbonisation of the Spanish power mix.

The programme's overall economic viability is deemed excellent and significantly above the regulated financial rate of return, therefore also generating an excellent "social benefit". The Promoter is an experienced utility operator of electricity distribution networks and has the necessary capacity to manage the implementation of the Programme and operate the assets over the term of the loan. Overall, the project quality and results can be considered to be very good.

The EIB financial contribution is valued by the client and considered very good as it offers more favourable and flexible conditions compared to market alternatives, in particular in terms of long availability period, flexible disbursements and long tenor. The EIB Green Loan label is also of great importance to the client given its strong sustainability focus and its strong stance in the green finance market.

The Project may include components that fall under Annex II of the EIA Directive (2011/92/EU), which requires the competent national authority to determine the need for an environmental impact assessment (EIA). The impacts that can be typically expected for some schemes relate to visual impact, impact on flying vertebrates, electromagnetic fields, noise nuisance, and disturbances during construction, as well as the possible impacts on protected fauna and flora (Habitats 92/43/EC and Birds 2009/147/EC). This operation is expected to contribute towards climate action objectives, and is aligned with EIB commitments as the EU Climate Bank.

The Promoter is a private entity. The contracts for the implementation of the project will be tendered in accordance with the relevant applicable national public procurement legislation in line with the EU Directives.