€350 million loan from the European Investment Bank (EIB) to the France-Spain power interconnector

The European Investment Bank (EIB) has undertaken to participate in financing the France-Spain interconnector with a €350 million loan. This is the first trans-European direct current link using innovative converter technology. The commercial launch of the interconnector is scheduled for 2014.

France-Spain power interconnector will be financed in part by a loan of €350 million from the European Investment Bank (EIB). This interconnector between two European countries, France and Spain, is unique because is the first time in Europe that an electricity link of this power is using innovative VSC (voltage source converter) technology with the ability to convert alternating to direct current very rapidly. The major advantage of direct current compared to alternating current is the possibility of building a very long underground link. The EU backed the working programme for this interconnector from 2007.

The main aim of this interconnection is to double electricity exchange capacity between Spain and the rest of Europe from 1400 to 2800 MW. In particular, the project will improve the reliability of the European power supply system; enhance the security of supply for the French and Spanish power grids; at the local level, improve the quality of the power supply for the inhabitants of the Roussillon and Ampurdán regions; promote the production and commercialisation of electricity from renewable energy sources; better integrate the Iberian market into the European electricity market, improving competitiveness and impacting positively on electricity prices in Europe; supply the Spanish section of the future Perpignan-Barcelona high-speed rail line; and foster economic and social development in the municipalities either side of the border with substantial benefits for local businesses and employment during the construction of the interconnector.

Promoting secure, competitive and sustainable energy is one of the EIB’s priority actions. In 2010 it devoted €14.4 billion throughout the European Union to this priority. The European Investment Bank is the EU’s financing institution and is tasked with providing long-term loans to support investment projects. In 2010, its total financing amounted to €71.8 billion.