The European Investment Bank (EIB) and Spanish energy company Endesa signed two loans worth €650 million to upgrade Spain’s electricity grid, according to a press release. The Spanish Ministry of Economy will provide €500 million through EU recovery funds, while EIB will lend €150 million from its own money.
The project will install smart meters, build new substations, and lay underground cables across six regions. This marks the first part of a larger €500 million financing package that EIB already approved. The money will help Spain’s grid handle more renewable energy and cope with climate change impacts.
Spain needs a stronger electricity network to deal with rising demand and more solar and wind power coming online. Climate change has brought more extreme weather that damages power lines and equipment. The country is also electrifying transport and heating systems, which puts extra strain on the grid. Current infrastructure struggles to manage the ups and downs of renewable energy production. More than half the investment will go to poorer regions where income is below the EU average.
The financing will pay for advanced transformers that can better handle supply changes, software to digitize the entire grid, and new measuring devices. Endesa will build substations and install underground cables to make the system more climate-resistant. The project supports Spain’s goal of reducing dependence on fossil fuel imports. EIB sees this as part of its climate action priorities and the EU’s REPowerEU program. The upgrades will help Spain integrate more renewable energy sources into its power system.
The deal shows how European institutions are working with national governments to modernize energy infrastructure. Spain gets the technical upgrades it needs while the EU advances its green transition goals. The focus on poorer regions helps spread economic benefits more evenly across the country. Endesa can now move ahead with grid improvements that were previously too expensive. This financing model could work for similar projects in other EU countries looking to upgrade their electricity networks.
