Iberdrola has announced that it is to invest EUR1.7 billion in the development of what is likely to be one of the most important hydropower projects undertaken in Europe in the last 25 years.

The Spanish utility has signed a contract with the Portuguese government to build four new dams in Portugal, completing the hydroelectric development of the Duero Basin. The 1200 MW Alto Tamega hydropower complex will give Iberdrola 15 per cent share in the Portuguese electricity market.

The four plants in the complex will be built between 2012 and 2018 and will be located near Galicia, close to where the electricity interconnections between Spain and Portugal are due to be upgraded. The project is expected to create 3500 direct and 10 000 indirect jobs.

The project will involve construction of four new dams – Gouvães, Padroselos, Alto Támega and Daivões. Two of the plants will be 900 MW pumped storage facilities while the remaining two will each have generating capacities of 234 MW.

Combined, the plants will generate around 2000 GWh/year, equivalent to three per cent of Portugal’s electricity consumption.