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Spain

News of Iberdrola finance from from EIB overshadowed by Scottish Power takeover talks

Spain's second largest utility and all dominant wind plant owner, Iberdrola, continued generating hard news in the wind sector last month even though the main focus was on its ongoing negotiations to buy all or part of British energy group ScottishPower. The Spanish utility sealed the biggest project finance agreement ever granted by the European Investment Bank (EIB) to the renewables sector in Spain. Worth EUR 450 million, much of the money will be used to finance the utility's plan to add 925 MW of wind capacity in Andalucía, approved by its board of directors at the same time as the EIB announcement. The company currently operates 3700 MW of wind power, none of it in Andalucía. It plans to spend EUR 430 million in the region over the next three years buying projects already under development. Just 500 MW is currently installed in Andalucía so far, but the huge region's authorities have spent the past two years processing project applications to ensure the provincial government's target of 4000 MW of wind power by 2010 is reached. The EIB finance deal falls under the bank's Climate Change Financing Facility initiative. It will back "up to 75% of project cost" for 31 wind projects totalling "around 900 MW," together with two small hydro developments, across four Spanish regions: Andalucía, Cantabria, Castile-La Mancha and Galicia. All projects are due for completion 2006-2007, says EIB. Worldwide Iberdrola is aiming for 7000 MW of installed wind capacity by the end of 2009 and 10,000 MW by the end of 2011, with 3000 MW of that abroad. In late November, Iberdrola was still closeted in talks with ScottishPower, also a major player in the wind power business with investments in operating wind plant in the United States and the UK and a large portfolio of wind projects under development in both countries. ScottishPower's wind assets are being touted as a major attraction for Iberdrola.

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