The European Investment Bank (EIB) is providing €500m loan to Spanish electricity utility Endesa to help improve and modernize the country’s distribution grid.

The funding will be used by Endesa over the next two years to boost the quality and efficiency of its electricity supply facilities and make them more environmentally friendly and sustainable.

Endesa plans to undertake the grid enhancements in six autonomous communities including the Aragon, the Balearic Islands, Catalonia, the Canary Islands, Andalusia and Extremadura.

EIB Román Escolano vice-president said that: “One of the EIB’s priorities is to ensure the necessary finance is available to guarantee a secure and sustainable power supply.

“We are therefore pleased to support this project to revamp electricity facilities, with a two-fold objective: to enhance supply quality and contribute to tackling climate change through a more sustainable electricity system.”

The utility plans to use the funds to launch new connections to renewable electricity sources and also for distribution grid improvements include laying new low-voltage lines and replacing overhead power lines with underground cables to reduce environmental impact and power cuts.

The funding will also be used by Endesa to automate electricity facilities and improve the substations’ remote control. The substations will be equipped with systems to detect leaks and unauthorized supply connections.

Endesa CEO José Bogas said that the EIB loan will help “boost the efficiency of distribution activities and increase the grid’s capacity to meet the demand for new energy services while enhancing the grid integration of renewable energies in the system.”

Image: Officials from European Investment Bank and Endesa during loan agreement signing ceremony. Photo: courtesy of Endesa S.A.