ICO grants Endesa its largest loan linked to sustainability criteria worth €300 million
22 December 2021
- The terms of the loan could improve if direct greenhouse gas emissions (target 1) are reduced, in line with the United Nations' SDG 13 on Climate Action.
- The financing of €300 million will be allocated to the construction of four photovoltaic solar projects and one wind project with a total installed capacity of 745 MW
- The investments will diversify power generation and bolster security of supply, in addition to increasing the share of renewables in Spain. Endesa, under its 2022-2024 strategic plan, plans to increase its installed capacity from renewable sources by 48% to 12,300 MW. In doing so, 92% of Spanish peninsular production will be free of CO2 emissions by the end of 2024. The investment in renewable energy foreseen in the period amounts to €3.1 bn
- Currently, Endesa has a sustainable debt level of 59% (vs 45% at the end of 2020) and plans to reach 80% by the end of 2024
The ICO general director of business, Rosario Casero, and the director of finance and insurance at Endesa, Adolfo García Nombela, have signed in Madrid today financing linked to sustainability criteria for an amount of €300 million to finance its investment strategy and roll-out of renewable energy in Spain. This is the largest sustainability-linked financing yet granted by ICO and links the financial conditions to a goal of reducing direct greenhouse gas emissions in target 1 (less than 150 grams of CO2eq / kWh by the end of 2023). Endesa will allocate this amount to the construction of four photovoltaic solar projects and a wind project with a total installed capacity of 745 MW, which will mean a total investment of 567 million Euros.
This green financing tied to sustainability criteria will contribute to meeting the Climate Change and Energy Transition Law as well as the Spanish National Integrated Energy and Climate Plan (PNIEC 2021-2030). It is also in line with the next EU legislative package “Fit for 55”, which sets a medium-term objective of reducing emissions by 55% in 2030 compared to 1990 levels, making Europe the first continent to be carbon neutral by 2050, in line with the objectives of the Paris Agreement.
The ICO general director of business, Rosario Casero, underlined that “this loan linked to sustainability represents a new step in the actions that we are carrying out at ICO, in co-financing with EIB, to help boost the development of renewable energy as one of the objectives of the Climate Change and Energy Transition Law of May 2021, prioritizing the identification and measurement of the environmental and social impact of the projects we finance. Operations such as the one signed today with Endesa strengthen our commitment to this line of work."
According to Endesa's finance and insurance director, Adolfo García Nombela, “more than two years ago ICO trusted Endesa to grant its first green loan in Spain. Today we are now talking about linking credit conditions to sustainability criteria, which shows the commitment of both parties to decarbonization. We already have a “sustainable” debt level of 59% and our goal is for it to reach 80% by the end of 2024.”
Towards climate neutrality
This operation will help the company to fulfil its roadmap towards full decarbonisation. Last November, Endesa presented its latest 2022-2024 strategic plan and its vision for 2030, in addition to bringing forward a decade, to 2040, its pledge to be a fully emission-free company. In the short term, Endesa's planned investment for the development of renewable power stands at €3.1 bn, which will allow for the commissioning of 4 gigawatts of new clean power: 90% will be generated in solar plants and the rest will come from wind farms.
This will ensure the company reaches 12,300 MW of solar, wind and hydroelectric power by the end of the plan, growing by 48% compared to the 8,300 MW with which it is expected to conclude 2021. The growth in renewables will allow 92% of energy production in the Iberian Peninsula at the end of 2024 to be CO2 emission free, six percentage points higher than at the end of 2021. This year it will be the integrated electricity company with the lowest CO₂ emissions in the Iberian Peninsula.
The Instituto de Crédito Oficial (Official Credit Institute - ICO) is a corporate state-owned entity attached to the Ministry of Economic Affairs and Digital Transformation. ICO has become a leader in the financing of both SMEs and large investment projects. ICO contributes to sustainable growth by fostering those economic activities that, due to their social, cultural, innovative or environmental importance, deserve promotion and development.
ICO Group has incorporated environmental, social and governance sustainability as a key theme in its activity to promote sustainable economic growth. As a national promotional bank, in accordance with the provisions of its Sustainability Policy, it pays special attention to financing renewable energy projects, sustainable infrastructures that include social, transport, logistics and ICT networks and facilities.
Endesa is the leading electricity company in Spain and the second in Portugal. It is also the second largest gas operator in the Spanish market. It operates an end-to-end business from generation, distribution and marketing, and also offers, through Endesa X, value-added services aimed at the electrification of energy uses in homes, companies, industries and Public Administrations. Endesa is firmly committed to the United Nations SDGs and, as such, strongly promotes the development of renewable energies through Enel Green Power Spain, the digitization of networks through e-distribution, and Corporate Social Responsibility. In this last area, we are also active through the Endesa Foundation. Our workforce has around 9,600 employees. Endesa is part of Enel, the largest electricity group in Europe.