In a joint effort to expedite decarbonisation in the Iberian Peninsula, both Iberdrola and the Norwegian sovereign wealth fund are working together
Nicolai Tangen, CEO of Norges Bank, and Ignacio Galán, Executive Chairman of Iberdrola, meet at the Davos Forum 2024. (Credit: Iberdrola, S.A.)
Iberdrola and the Norwegian sovereign wealth fund, overseen by Norges Bank Investment Management, plan to expand their collaboration in clean energy investment.
They aim to double their efforts by incorporating an additional 1,300 MW of renewable energy capacity, leading to a combined investment exceeding €2bn within the next three years.
Currently, 674 MW of wind and solar energy has already been integrated into the partnership, and the remaining capacity will be included in the upcoming months, ultimately reaching a total capacity of 2,600 MW.
The newly added 674 MW of renewable energy capacity is currently in the development stage, with a distribution of 40% wind and 60% solar photovoltaic (PV) projects spanning the Iberian Peninsula. Ongoing negotiations involve finalising exclusivity terms for an additional 643.5 MW, which includes both operational and under-development solar PV capacity, to be incorporated into the collaborative alliance.
In a joint effort to expedite decarbonisation in the Iberian Peninsula, both Iberdrola and the Norwegian sovereign wealth fund are working together. There is also the potential for extending this agreement to include other countries in the future. Notably, Iberdrola will hold a majority stake of 51% in the assets.
The executive chairman of Iberdrola, Ignacio Galán, unveiled this partnership during discussions at the World Economic Forum held in Davos.
As per the terms of the agreement, the valuation of the entire 674 MW, now integrated, stands at €627m. This valuation excludes additional margins for asset management, operation and maintenance services, and other corporate services. The renewable portfolio, with a capacity of 674 MW, is poised to provide energy to over 400,000 homes annually. This initiative is expected to contribute to avoiding more than 350,000 tonnes of CO2 emissions each year.
Norges Bank Investment Management, the manager of Norway’s sovereign wealth fund, boasts assets under management totalling approximately €1.4trillion, with stakes in over 9,000 companies worldwide. The fund holds an average ownership of 1.4% in all listed companies globally and 2.5% in all listed companies across Europe.
In addition to being a major shareholder in various companies, Norges Bank Investment Management has held a 3% stake in Iberdrola for over seven years. Leveraging this longstanding relationship, Norges Bank Investment Management has opted to make its inaugural direct investment in renewable assets within Spain, in collaboration with Iberdrola, the largest European electricity company by capitalization.
This collaboration establishes a secure alliance between two preferred partners, signalling the potential for expansion into additional renewable opportunities in different geographic regions.