IFC commits €300m loan for renewable energy expansion

The International Finance Corporation (IFC) announced today a green and sustainability-linked loan (SLL) of €300 million (equivalent to $329 million) to Iberdrola. IFC's loan will finance renewable energy projects in emerging markets, including a number of countries that currently rely heavily on coal, such as Morocco, Poland, and Vietnam. IFC has already committed a first tranche of €170 million, which will finance onshore wind projects in Poland.

The green loan is in line with Iberdrola's Green Financing Framework, and the SLL is structured with two ambitious corporate sustainability performance targets, in line with Iberdrola's Climate Action Plan.

The first target is to reduce Iberdrola's direct and indirect absolute greenhouse gas emissions by more than 60 percent by 2030 from a 2020 baseline. This includes scope 1, 2, and 3 emissions, from the company's operations, customers, and supply chains. Iberdrola is among only a few energy companies globally to commit to such a comprehensive emissions target, with a trajectory that is validated by the Science Based Target initiatives (SBTi) to be consistent with limiting warming to 1.5⁰C.

The second target is to more than double Iberdrola's renewable energy capacity by 2030—also of great significance, given Iberdrola's 41+ GW of installed renewable capacity by September 2023.   

Iberdrola, a global leader in renewable energy and sustainable finance, is one of the world's largest utilities by market capitalization, operating across all segments of the energy value chain. It operates in many regions where IFC has a presence, including Europe, Latin America, Asia, and Africa.

"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," said Alfonso García Mora, Vice President for Europe, Latin America, and the Caribbean at IFC. "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." 
Also, as part of the partnership, Iberdrola and IFC are exploring collaborations on early-stage project development in emerging energy solutions, including offshore wind and green hydrogen.

"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," said José Sainz Armada, Iberdrola's Director of Finance.
The loan follows two green and sustainability-linked loans 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 IFC investments supported network expansion and digitalization in Brazil.

As of December 2023, IFC has invested over $6.2 billion in sustainable finance in infrastructure, including $3 billion in sustainability-linked financing for infrastructure companies in emerging markets. In addition to financial support, IFC provides complementary client services such as project preparation support and climate advisory. These services assist in defining ambitious sustainability strategies, developing concrete decarbonization action plans, assessing climate risks, and ensuring a just transition.