Iberdrola and the International Finance Corporation (IFC), part of the World Bank Group, join forces to drive the energy transition in emerging markets. Both institutions today launched an alliance to support clean energy and decarbonization in various developing countries.
The agreement is built on three pillars. Initially, IFC Iberdrola will provide a US$150 million (approx. €138 million) green loan linked to sustainability goals to fund digitization and energy efficiency improvements in the power distribution grids of Iberdrola’s Brazilian subsidiary Neoenergy. This is IFC’s second loan to Neoenergia following the $115 million sustained loan in 2022.
Second, Iberdrola and IFC are exploring another green loan, linked to sustainability indicators, for the development of renewable energy projects in emerging countries such as Poland, Morocco and Vietnam.
Third, both institutions are analyzing collaboration opportunities to support the development of new innovative clean energy projects in emerging economies, such as offshore wind and green hydrogen.
José Sainz Armada, Director of Finance, Control and Corporate Development at Iberdrola, stated: “With this agreement, we are driving the energy transition, decarbonization and electrification in developing countries where Iberdrola already operates. In addition, it consolidates IFC as one of the electricity providers “Allies of the company in financing its projects in all fields of action, from photovoltaics and wind farms to green hydrogen and smart networks.”
Alfonso García Mora, IFC Vice President for Europe, Latin America and the Caribbean, affirmed: “We are proud to work with Iberdrola in emerging markets. The loans we have signed with Neoenergia represent a first step towards a broader collaboration that will drive the energy transition in Brazil, Poland, Morocco and Southeast Asia. As a pioneer in the sector, Iberdrola is a strategic ally of the IFC.”
In these countries, Iberdrola is already making progress on several renewable projects. In Poland, the company is developing a 7,300 MW offshore wind portfolio together with SeaWind. A few years ago, Iberdrola in Vietnam acquired Sowitec Vietnam, a company with a developing 550MW renewable energy portfolio spread across six projects: five wind farms and a 50MW floating photovoltaic project.
IFC, commitment to the future
AAA-rated IFC is the arm of the World Bank Group that finances the private sector in emerging markets. The IFC helps countries improve their own private sector by investing in companies through loans, equity and guarantees, mobilizing capital from other investors, and advising companies and governments to encourage private investment. It is currently present in more than 94 countries in Latin America, Africa, Asia, the Middle East and Eastern Europe. Since its inception, the company has invested more than $285,000 million in 2,000 projects.
IFC’s relationship with Iberdrola dates back to 1998, when financing was provided for Iberdrola’s subsidiaries in Bolivia (Electropaz). Subsequently, Iberdrola worked with IFC on projects in Brazil (Termopernambuco) in 2000 and the relationship continues to this day across several projects. Among them, IFC’s most recent 550 million Brazilian reais ($115 million) loan to Neoenergia last year, which combines green financing with a pricing structure linked to sustainability goals, stands out.
Iberdrola, a reference in green financing
Iberdrola is a leader in green finance. With more than €48,000 million in sustainable operations, of which €17,619 million in green bonds, the company continues to consolidate its leadership position, making Iberdrola the world’s largest private issuer of this type of bond.
IFC is a global reference for green and sustainable finance. IFC issued its first green bond in 2010 and is one of the world’s largest green bond issuers, with 172 green bonds issued in 20 currencies. Since 2020, IFC has invested more than $4.5 billion in green and sustainability-related lending to infrastructure companies in emerging markets. IFC has chaired the International Capital Markets Association (ICMA) Committee on Sustainable Finance, which is responsible for publishing the official principles of this type of instrument. IFC also participates in the Sustainable Finance Committee of the Loan Market Association (LMA) and the Asia-Pacific Loan Market Association (APLMA).