EIB approves $327M loan for Canary Islands pumped storage project

Photo by Jp Valery on Unsplash

The European Investment Bank (EIB) has approved a €300 million ($327 million) loan to finance the construction of the Salto de Chira pumped-storage hydroelectric power plant being built by Red Eléctrica, a subsidiary of Redeia, in Gran Canaria.

The Salto de Chira power plant will have an installed power capacity of 200 MW and an energy storage capacity of 3.5 GWh. Work kicked off on the project in 2022 and is expected to last at least 70 months. The project will involve an investment of more than €400 million ($449.4 million) and is expected to generate more than 4,300 jobs, including more than 3,500 on the island of Gran Canaria. The facility is expected to save around €122 million ($137.1 million) per year in electricity costs by promoting the energy independence of the island and reducing fossil fuel imports. The administrative process to build the project began in October 2016.

The Salto de Chira plant takes advantage of the existence of two large reservoirs (the Chira and Soria dams) located in the interior of the island. In total, 91% of the project’s infrastructure will be located underground. The project will add a capacity of 200 MW (equivalent to about 36% of Gran Canaria’s peak demand) and provide 3.5 GWh of storage.

“Storage will be one of the key elements in the energy transition, providing flexibility and manageability to the electricity system to integrate large amounts of renewable energies, thus contributing to electrification and access to renewable energy, which is especially important for an electricity system like the Canary Islands, which is isolated and therefore more vulnerable,” said CEO of Redeia, Roberto García Merino.

Once finalized, the pumped-storage hydroelectric power plant will be a tool for the operation of the system, providing it with flexibility for the substitution of fossil energy sources and the integration of renewable resources, with the hope of mitigating the interconnection difficulties of the Canary Islands’ electricity systems.

The project also includes the construction of a seawater desalination plant that will be used to fill the reservoirs, which Red Eléctrica argues will directly benefit the development of farming communities in the area due to the water not needed for the operation of the plant.

In 2023, the EIB Group signed more than €21 billion in financing for energy security in Europe. In the same year, it allocated €4.5 billion to this goal in Spain, financing projects in areas including renewable energy, energy efficiency, power grids, and storage systems.

In July 2023, the EIB Board of Directors raised the amount earmarked for REPowerEU projects to 45 billion. REPowerEU is the plan designed to end Europe’s dependence on fossil fuel imports. To boost financing for the EU manufacturing industry, the EIB will also expand the range of eligible sectors to include leading strategic technologies with net-zero carbon emissions, as well as extraction, processing, and recycling of critical raw materials. The additional financing will be disbursed between now and 2027. In total, it is expected to mobilize more than 150 billion in investment in the target sectors.

Trump’s ‘unpredictability’ shakes investors – This Week in Cleantech

This Week in Cleantech is a weekly podcast covering the most impactful stories in cleantech and climate in 15 minutes or less.
wind turbines in front of an orange sunset

Renewables permitting has been ‘paralyzed’ by Trump – This Week in Cleantech

This Week in Cleantech is a weekly podcast covering the most impactful stories in cleantech and climate in 15 minutes or less.