Iberdrola Secures $7.7 Billion In Green Financing Deals

International energy powerhouse Iberdrola has closed a portfolio of €6.6 billion (USD $7.7 billion) sustainable finance deals with success, reasserting its position as a global energy transition leader. The funding consists of a €4.1 billion green financing package to build the East Anglia THREE, one of the world's largest offshore wind farms, and a €2.5 billion sustainability-linked credit facility to finance Iberdrola's decarbonization strategy and eligible EU taxonomy investment plans.

The €4.1 billion green finance will be used to develop and construct the East Anglia THREE project, a 1.4 GW offshore windfarm off the coast of Suffolk in the United Kingdom. Co-developed with UAE renewable energy company Masdar, the project is the decade's largest offshore wind deal. Scheduled to come on stream in the fourth quarter of 2026, East Anglia THREE will provide clean power for 1.3 million British homes.

Iberdrola Executive Chairman Ignacio Galán highlighted the significance of this financing to allow the company to increase its investments in clean energy infrastructure. "This transaction reinforces our ability to keep increasing investments in networks, renewables and storage to meet the robust growth of demand caused by electrification in nations like the United States and the United Kingdom," Galán said when signing the credit facility.

Green financing model is applied to megaprojects, with repayment of capital planned from the project's cash flow as soon as it begins operation. This model, also referred to as project finance, enables Iberdrola to minimize financial exposure while securing steady long-term returns. The funding package is supported by long-term power purchase agreements (PPAs), led by a significant one with Amazon in 2024. The money will fund a broad range of expenses ranging from the installation of wind turbines, substations, submarine cables, converter stations, and pre-operating maintenance and operation.

Appearing on the back of 23 global banks, the green finance deal reflects the faith that investors have in Iberdrola's sustainable development strategy and pipeline of renewable energy. The transaction aligns with Iberdrola's target, set in 2021, to finance more of its business in green and sustainable products.

In addition to the green financing, Iberdrola signed a sustainability-linked credit facility worth €2.5 billion. This is a five-year, multicurrency facility signed with a syndicate of 32 international banks. Its pricing mechanism is directly linked to the company's environmental performance, namely its advancement toward meeting decarbonization targets and to the fact that its investments are aligned with the EU Taxonomy—a classification system intended to assist in directing sustainable economic activities in the European Union.

Iberdrola emphasized that this credit facility will complement its liquidity profile and funding sources, a key move in a rising-rate and volatile capital markets setting. The credit facility will enable the company to pursue additional opportunities for energy infrastructure as demand continues to grow worldwide for electrified low-carbon power systems.

These new transactions take Iberdrola's sustainable financing to more than €60 billion at end-2024. Of these, €22.9 billion worth of green bonds, €15.6 billion of sustainable credit lines, and €6 billion of sustainable commercial paper, underpinned by other green and sustainable types of loans and multilateral finance structures. In 2024, a whopping 94% of the firm's new financing transactions were labeled as sustainable, going a long way in bringing its capital structure into green harmony.

The landmarks also endorse Iberdrola as a leader of the energy transition, where it has made huge investments in renewable energy, grid innovation, and energy storage. The group's strategy is very well aligned with global climate goals and local energy transition policies, especially within Europe and North America.

Iberdrola's sustainability pledge is also being recognized as the urgent response to the rising intensity of the pressure of climate change and the urgent need for robust, low-carbon power systems. By investing capital in utility-scale renewable infrastructure and aligning finance with climate metrics, the company is not only cementing its competitive edge but also influencing the evolution of sustainable finance.

As demand for green energy continues to expand and the regulatory climate continues to be favorable to green infrastructure, Iberdrola's successful issuance of more than $7.5 billion of green financing is further evidence of its march towards becoming a world clean energy leader.