The International Finance Corporation (IFC), a member of the World Bank Group, provided a € 300 million green and sustainable development related loan to Iberdrola, a Spanish company, in May 2024.
This loan is part of a broad collaboration between two entities to promote energy transition in emerging markets. These funds will be used to fund renewable energy projects in countries highly dependent on coal, such as Morocco, Poland, and Vietnam. The first part of this 170 million euro loan has been pledged to support onshore wind farm projects in Poland.
The loan is dependent on achieving two sustainable development goals for the Spanish energy company Iberdrola. The first goal is to reduce its absolute, direct, and indirect greenhouse gas emissions by over 60% from the 2020 baseline by 2030, reaching 1, 2, and 3 (covering Iberdrola’s operations, customers, and supply chain).
Secondly, by 2030, the installed capacity of renewable energy will double, significantly increasing from the 41 gigawatts or more that the company plans to install by September 2023.
The goals of SLL are consistent with its existing climate action plan, which has developed a roadmap that includes targets validated by the Science Based Targets Initiative (SBTI). SBTI is a corporate climate action non-governmental organization founded in 2015, aimed at helping businesses set emission reduction targets based on climate science and the goals of the Paris Agreement.
Through this loan, Iberdrola will be able to continue driving the energy transition, decarbonization, and electrification of developing countries that still heavily rely on fossil fuels. This action also consolidates the position of the International Finance Corporation as one of the main financial allies of the Iberdrola renewable energy project.
Iberdrola is one of the world’s largest utility companies by market value and one of the world’s leading renewable energy suppliers, operating throughout the entire energy value chain.
IFC chose to collaborate with Iberdrola because it is one of the few energy companies with SBTI certified emission reduction targets, consistent with the 1.5 ° C emission reduction scenario. The company is also recognized as a pioneer in new energy technologies such as ocean wind energy, advanced network digitization, and green hydrogen. Iberdrola also plays an important role in some priority markets of international finance companies such as Brazil and Poland. As of December 2023, the International Finance Corporation has invested over 6.2 billion US dollars in infrastructure, including 3 billion US dollars for sustainable development financing of emerging market infrastructure companies. In addition to providing financial support, the International Finance Corporation also offers project preparation support and climate consulting services to its clients.
In short, the International Finance Corporation supports efforts to transition to a low-carbon economy, especially in some coal dependent countries such as Morocco, Poland, and Vietnam. This indicates that companies such as IFC and Iberdrola are committed to promoting decarbonization of the global energy system, particularly in emerging markets and developing countries, helping these countries achieve sustainable energy transitions, and reflecting the increasingly important role of IFC and the private sector in global climate action.
The International Finance Corporation is an institution of the World Bank that primarily focuses on private sector investments, indicating that private companies such as Iberdrola are playing an increasingly important role in driving global climate action. The support of the International Finance Corporation is not limited to financing, but also includes services such as project preparation and climate consulting to help businesses implement better sustainable projects.
At the same time, the International Finance Corporation holds an optimistic attitude towards the stock market, economy, new energy, and development prospects of the Spanish market, and actively deepens cooperation with Spanish companies. In order to promote sustainable development in various industries in Spain, the International Finance Corporation actively collaborates with Spanish companies and provides support at multiple levels. In 2024, preparations will be made to establish a European headquarters in Madrid, Spain, to further strengthen the strategic design of the International Finance Corporation in Spain, thereby promoting its comprehensive expansion and radiation in the European market.