Endesa S A : , ICO and EIB sign €500 million in sustainability-linked financing

• ICO and European Investment Bank (EIB) loans of €300 million and €200 million respectively support the development of Endesa's solar and wind energy projects, helping accelerate the European Union's energy transition and supporting the REPowerEU programme to end dependence on fossil fuel imports.
• Loan conditions can be improved if (Scope 1) direct greenhouse gas emissions are reduced, in line with UN Sustainable Development Goal 13 (climate action).

Endesa, ICO and the European Investment Bank (EIB) have joined forces once again to boost the rollout of renewable energy in Spain. To this end, Endesa CEO José Bogas, ICO Chairman José Carlos García Quevedo and EIB Director of Operations in Spain and Portugal Gilles Badot, signed two financing operations for €300 million and €200 million, respectively, today in Madrid. The goal of the agreements is to finance Endesa's investment for renewable energy in Spain.

The €300 million loan from ICO aims to support Endesa's project started in 2021 to build 20 solar photovoltaic plants and eight wind farms, complementing the financing granted by the EIB. These solar photovoltaic plants will provide an estimated capacity of 2.35 GW, while the wind farms will provide 0.55 GW.

The €200 million EIB loan tranche completes the framework loan approved by the EU bank to support Endesa's renewable energy expansion plan, totalling €700 million. The project will help accelerate the energy transition, improve supply security and foster climate action, thus contributing to REPowerEU - the European Union's plan designed to strengthen Europe's energy autonomy.

Specifically, the EIB's framework loan to Endesa will co-finance a large number of the company's commercial-scale solar photovoltaic and wind energy projects in Spain, and the transmission infrastructure required for interconnection to the grid. These projects involve a series of renewable assets within a portfolio of projects comprising 16 commercial-scale solar developments and eight wind energy projects. They will provide some 1.5 GWp of solar photovoltaic power and 0.4 GW of onshore wind power, which is equivalent to the annual energy consumption of around 1 million households.

At the signing ceremony at Endesa's headquarters today, CEO José Bogas said that "having the support of the EIB and ICO once again is a guarantee of the steadfastness of Endesa's commitment to pursuing its strategic plan and continuing on its path to total decarbonisation. This sustainability-linked loan will help us adhere to the Law on Climate Change and Energy Transition, as well as Spain's National Integrated Energy and Climate Plan (PNIEC 2021-2030). It will also be line with the European Union's Fit for 55 legislative package, which will make Europe the first carbon neutral continent by 2050."

ICO Chairman José Carlos García de Quevedo added: "The signature of the operation is another step forward in ICO's commitment to the development of sustainable finance - an objective we share with the EIB - to drive the green transition and environmental sustainability. The projects Endesa will develop using the financing signed today will move us forward on the path to decarbonisation, generating positive environmental and social impact."

EIB Director of Operations in Spain and Portugal Gilles Badot said that "this EIB operation with Endesa will provide a boost to the rollout of renewable energy across Spain to meet EU climate goals, helping to ensure a sustainable and resilient energy supply. Many of the Endesa solar and wind energy projects we are financing are also located in cohesion regions, meaning we are promoting equitable growth and convergence between the EU regions, which is one of the key aims of the EIB's cross-cutting policy objectives."

These new financing operations pair financial conditions with a Scope 1 direct greenhouse gas emissions reduction target, the achievement of which will also be certified by an independent third party (AENOR). Endesa's 2023-2025 strategic plan is to reduce these emissions to below 145 g CO2eq/KWh by December 2025 (currently at 205 g CO2eq/KWh by the end of 2022).

Endesa is a leader in financial operations with sustainable incentives and, at the end of 2022, 64% of its total lending included this type of incentive applied to working-capital operations and guarantee lines. The aim is for 87% of its lending to be sustainability-linked by the end of 2025.