European Investment Bank Pledges EUR1.6 Billion for Bay of Biscay Electricity Interconnection Project

Strategic Insights -

The European Investment Bank has issued a press release announcing its support for the Bay of Biscay electricity interconnection project, a landmark initiative to boost the interconnection capacity between the Iberian Peninsula and the rest of continental Europe. The project aims to increase the exchange capacity from 2,800 to 5,000 megawatts (MW), improving the reliability of power supply among France, Spain, and Portugal, and enhancing the overall European energy system. With a total route length of 400 km, 300 km of which underwater, the interconnection will contribute to ensuring cleaner, more secure, and more affordable power for millions of citizens. The EIB financing, totaling EUR1.6 billion, will be provided to Spanish and French transmission-system operators Red Electrica and RTE, respectively, through a joint venture.

Key Takeaways:

  • The Bay of Biscay electricity interconnection project aims to increase the exchange capacity between France, Spain, and Portugal from 2,800 to 5,000 MW, enhancing the reliability of power supply and contributing to a cleaner, more secure, and more affordable energy system.
  • The project has a total route length of 400 km, with 300 km underwater, making it the first submarine electricity interconnection between Spain and France.
  • The European Investment Bank is providing EUR1.6 billion in financing, which includes two loan tranches totaling EUR1.2 billion, signed at the EIB headquarters in Luxembourg.
  • The project is a landmark initiative for the European power system, contributing to the development of exchanges of low-carbon, competitive electricity throughout Europe.
  • The interconnection will also help the Iberian peninsula progress towards the EU interconnection target for Member States of at least 15% of installed production capacity by 2030.
  • The Bay of Biscay project, along with the underground project and the improvement of existing infrastructure, will contribute to enhance the interconnection capacity between the Iberian Peninsula and the rest of Europe.
  • The project reinforces the EIB's role as the climate bank, aligning with its strategic priorities, and supports the REPowerEU action plan to increase energy security and accelerate the energy transition.
  • The operation will also contribute to avoiding 600,000 tonnes of CO2 each year.

Statistics:

  • EUR1.6 billion in EIB financing for the Bay of Biscay project
  • 5,000 MW increase in exchange capacity between France, Spain, and Portugal
  • 400 km total route length, with 300 km underwater
  • EUR578 million EU grant allocated to the project under the Connecting Europe Facility
  • 2028 - expected operational date of the interconnection
  • 15% - EU interconnection target for Member States of installed production capacity by 2030
  • 600,000 tonnes - annual CO2 emissions reduction

Sources:

  • European Investment Bank press release
  • European Commission press release
  • Red Electrica press release
  • RTE press release
  • European Commission Connecting Europe Facility press release
  • REPowerEU action plan press release
  • EIB Strategic Roadmap for the years 2024-2027