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EIB Supports Iberdrola with €108 Million for Pumped Hydro and Battery Storage Upgrade at Valdecañas in Spain
Apr 17, 2025
The European Investment Bank (EIB) has signed two green loans totaling €108 million with Iberdrola to boost the pumping capacity of the Valdecañas hydroelectric complex in Spain. This includes a €50 million loan from EIB's own funds and €58 million from the Regional Resilience Fund (FRA), supporting Spain’s broader Recovery, Transformation and Resilience Plan and the REPowerEU initiative.
The complex includes the Valdecañas and Torrejón power plants and will feature an upgraded 225 MW hydroelectric facility, a 15 MW hybrid battery, and 7.5 MWh of energy storage. This will raise the total added pumping capacity to 313 MW and the Tajo system's energy storage capacity to 210 GWh.
Designed to enhance renewable energy integration and grid stability, the system will utilise existing infrastructure and avoid altering reservoir operations or transport networks—minimising environmental impact. Once operational, it is expected to cut CO2 emissions and significantly contribute to climate action and territorial cohesion—a priority for regions with income below the EU average.
The project will also generate employment, creating 165 direct and 500 indirect jobs, primarily in cohesion regions, thus fostering economic and social development alongside climate benefits. The closed-loop pumped hydro system enables energy storage when surplus power from renewable sources is available, and its release during peak demand, functioning independently of rainfall.
The EIB’s involvement aligns with its support for REPowerEU, aiming to improve EU energy security and reduce dependence on fossil fuel imports. The Regional Resilience Fund—led by Spain's Ministry of Economy in partnership with regional governments—channels NextGenerationEU funds into projects that strengthen green infrastructure and sustainable development at a regional level.