The European Investment Bank (EIB) has signed two green loans with Iberdrola totalling €108 million to fund improvements at the Valdecañas pumped storage hydroelectric complex in Cáceres, Extremadura. The funding will be used to expand the facility’s energy storage capacity and support the integration of renewable energy into the grid.
The financing package includes a €50 million loan from the EIB’s own funds and a €58 million loan backed by the Regional Resilience Fund, which is supported by the Spanish Ministry of Economy, Trade and Enterprise and financed through the EU’s NextGenerationEU programme.
The Valdecañas complex, which includes the Torrejón and Valdecañas power plants, will see its total installed capacity reach 225MW. It will also feature a 15MW hybrid battery with 7.5MWh of stored energy. Combined, the hydroelectric and battery systems will allow for a maximum added pumping capacity of 313MW and increase the Tajo system’s storage capacity to 210GWh.
The upgrades will be made using existing infrastructure in the Valdecañas and Torrejón-Tajo reservoirs, with no change to operating levels, and will rely on current transport networks to limit environmental impact.
According to the EIB, the project “will help to secure energy supply and create storage capacity enabling the integration and management of renewable energy.” Once operational, the plant is expected to reduce CO2 emissions and create around 165 direct and 500 indirect jobs.
The investment is located in a cohesion region, defined by the EU as an area with income levels below the European average. As such, it supports the EIB’s priorities in climate action and regional cohesion, as outlined in its 2024–2027 Strategic Roadmap.
The project also aligns with Spain’s Recovery, Transformation and Resilience Plan and the EU’s REPowerEU initiative, which aims to strengthen energy security and reduce reliance on fossil fuel imports.
