| Project Detail |
The loan will finance the construction of a 200MW pumped-storage hydroelectric power station and associated desalination plant in the Gran Canaria.
Additionality and Impact
The Project contributes to increase energy storage in isolated systems with the construction of a 200MW pumped hydropower storage scheme connecting two existing reservoirs located in the island of Gran Canaria, Spain.
Through this Project, the EIB will contribute to (i) reduce the CO2 and other emissions from the power sector; (ii) enable the integration of high shares of wind and solar power; and (iii) improve power quality and support security of electricity supply, which has public goods attributes. In addition, the desalination will also provide water for irrigation and contribute to the firefighting system of the island thereby contributing to the adaptation of the island to climate change. The Project is developed under a concession and regulated framework.
The pumped-storage project is supporting the EU policy regarding energy storage as defined in the Clean Energy for All Package and the Electricity Directive (2019/944), and targets and the National Energy and Climate Plan, Spains Integrated Plan for Energy and Climate (PNIEC) and Canarias Energy Strategy 2015-2025. In line with the EU Taxonomy, pumped hydropower storage is deemed to provide substantial contribution to climate change mitigation. The Project contributes to the Banks lending priority objectives on Energy as well as the transversal objectives on Climate Action, Environmental Sustainability and Social and Economic Cohesion.
On project quality, the project is supported by adequate capabilities / governance of the promoter. In terms of project results, the projects are expected to have a positive economic rate of return and is expected to generate a positive, broader social benefit.
The Banks financial contribution is considered very good and valuable to the client, as the EIBs offering is more favourable than market alternatives under various dimensions (e.g. longer tenor, availability and grace periods, convertible or revisable rates). The Bank intervention will help the Borrower to diversify its funding sources and lengthen the average maturity of the companys debt.
Objectives
The aim is to improve power quality, reliability and supply security as well as increase generation from renewable sources in Gran Canaria isolated grid. The project is connected to two existing reservoirs avoiding creation of new reservoir and optimising the usage of the existing ones. It will also provide water for irrigation and firefighting system of the island. During the peak hours, the project can provide 200MW to the grid during 16 hours i.e. 3.2GWh per cycle. It will contribute to mitigate the risk of electricity shortage, reduce fossil fuel import and smoothen electricity peak prices.
Sector(s)
Energy - Electricity, gas, steam and air conditioning supply
Proposed EIB finance (Approximate amount)
EUR 300 million
Total cost (Approximate amount)
EUR 664 million |
