The European Investment Bank (EIB) said it is pledging €1.6 billion to finance the construction of the Bay of Biscay electricity interconnection between Spain and France.
The EIB financing for the Bay of Biscay project takes the form of loans to Spanish and French transmission-system operators Red Eléctrica and RTE Réseau de transport d’électricité.
The parties signed first loan tranches totalling €1.2 billion at the EIB headquarters in Luxembourg.
The event was attended by Nadia Calviño, president of the EIB Group, Dan Jørgensen, European Commissioner for Energy and Housing, Marc Ferracci, French minister of Industry and Energy, Miguel González Suela, Spanish deputy secretary of State – for Ecological Transition and the Demographic Challenge, Beatriz Corredor, chairwoman of Redeia, parent company of Red Eléctrica and Thomas Veyrenc Member of the Executive Board, director general for Finance, Strategy and Economics of RTE.
The EIB said: “This is a landmark Project of Common Interest in which the EIB, the European Commission, Red Eléctrica and RTE are joining forces to strengthen cross-border electricity interconnections and hereby the overall European energy system.”
Nadia Calviño, president of the EIB Group, said: “EIB support for the France-Spain electricity interconnection will be key to ensuring that the Iberian Peninsula is no longer an energy island. This agreement will lead to a major shift in energy integration, an important area for EU competitiveness and strategic autonomy.”
Dan Jørgensen, European Commissioner for Energy and Housing, said: “Europe needs more integrated and more interconnected energy systems and markets. This is crucial to ensure our citizens have access to clean and stable supplies, wherever they are. This is what a genuine Energy Union is about.
“I very much welcome the additional financial support offered by the EIB for a key project that will ultimately improve the lives of many across the Pyrenees and beyond.”
Construction of the Bay of Biscay link is already under way by Inelfe – a joint venture by RTE and Red Eléctrica, and it is due to become operational in 2028.
Once operational, the project will almost double the electricity exchange capacity between France and Spain to 5,000 MW. That means cleaner, more secure, and more affordable power for millions of citizens, while avoiding 600,000 tonnes of CO₂ each year.
The project will strengthen the interconnection capacity between France and Spain, helping the Iberian peninsula’s progress towards the EU interconnection target for Member States of at least 15% of installed production capacity by 2030.
The Bay of Biscay project, together with the underground project between Baixas-Santa Llogaia and the improvement of the existing Argia-Hernani infrastructure will contribute to enhance the interconnection capacity between the Iberian Peninsula and the rest of Europe, while better integrating it within the EU energy market.
“Today, with the support of the EIB, we take another step forward in this project, a bridge between nations and key for European cohesion that will enable us to tackle the greatest challenge of our time: the energy transition. That is why both countries must continue to work together to strengthen our connections, also through the two new projects planned to cross the Pyrenees,” said Beatriz Corredor, chairwoman of Redeia.