The European Investment Bank is investing $48.9 million (€43.5 million) to finance the largest solar project in Andalusia and one of the most powerful in Spain. Despite the COVID-19-related lockdown in Spain, over 85% of the construction plan was successfully completed by May 2020.
Courtesy of NREL
This investment, backed by the European Fund for Strategic Investments (EFSI), the main pillar of the Investment Plan for Europe, will contribute to Spain’s green recovery and will create around 350 jobs during the implementation phase in the transition region of Andalusia.
The Cabrera Solar Project includes the construction and operation of four 50MWp photovoltaic solar plants in Alcalá de Guadaira, Seville. The four plants will provide enough clean energy to supply nearly 145,000 households per year and will contribute to reducing CO2 emissions by 300 metric kilotons (kt) CO2-equivalent per year. It will have a significant impact on the Spanish renewable energy market, helping the country to meet the government’s objective of generating20% of all the country’s energy needs from renewable sources by the end of this year. Moreover, the Cabrera Solar Project will contribute to meeting the European Commission’s target of ensuring that at least 32% of Europe’s final energy consumption comes from renewables by 2030.
“As the EU climate bank, we are committed to investing in green recovery in Europe, building sustainable infrastructure while spurring the creation of green jobs. Spain is a market with huge potential for renewable energy and the EU bank is proud to support the investments needed to meet the country’s renewable energy targets,” said EIB Vice-President Emma Navarro, responsible for climate action at the Bank and for operations in Spain. “Despite the economic challenges caused by COVID-19, we should not forget that climate change still represents one of the biggest threats to our future.”
The project, sponsored by Encavis AG and developed by Solarcentury, secured senior debt facilities for an aggregate amount of $107.8 million (€96 million) from the EIB, Deutsche Bank and Rabobank, and reached financial close in June 2020. As for the construction and operation of the Talayuela solar plant,also financed by the EU bank, sponsored by Encavis AG and Solarcentury and developed by Solarcentury, also the Cabrera Solar Project is a greenfield renewable energy project financed without any form of government or public support and entirely relies on revenues from the sale of electricity. The project entered into a PPA with Amazon, which hedges the off-take price for a significant volume of the energy production. The EIB will contribute to the crowding-in of other investors and private lenders, while EFSI will provide the long-term non-recourse debt financing, crucial to ensuring the viability of the project.
The Investment Plan for Europe, known as the Juncker Plan, is one of the European Commission’s top priorities. It focuses on boosting investment to generate jobs and growth by making smarter use of financial resources, removing obstacles to investment, and providing visibility and technical assistance to investment projects.
The European Fund for Strategic Investments (EFSI) is the main pillar of the Juncker Plan and provides a guarantee that enables the EIB to invest in more projects that often come with greater additionality.