EIB Approves €60M Loan for Andorra's Energy Transition, Funds Spain Power Link

The European Investment Bank (EIB) has approved a €60 million framework loan to advance Andorra's energy transition, with the initial €30 million tranche signed to finance a new high-voltage electricity interconnection with Spain. This marks the EIB's first lending to the non-EU Principality.

The funds will flow to the government, which will channel them to Forces Elèctriques d’Andorra (FEDA) via a mirror loan, as the EIB lends only to governments or public entities. FEDA will oversee key projects, including renewable energy production, grid transmission and distribution upgrades, and urban heating and cooling networks.

Finance Minister Ramon Lladós said the first tranche targets "the interconnection with Spain to increase capacity and make it even more robust," specifically covering the line within Andorra. State Secretary for Energy Transition, Transport and Mobility David Forné specified that the interconnection and related reinforcements, including the new 220kV Estació Transformadora (ETR) under construction, total €50 million, with FEDA providing €25 million and the EIB covering the balance.

Forné revealed the deal was sealed last November at COP30 in Brazil, where he approached Spanish Third Vice-President Sara Aagesen in the corridors. "I stopped the Spanish vice-president and told her I had to leave with this signed," he recounted. The impromptu meeting that evening finalized the long-stalled agreement, unblocking a project vital for handling rising electricity demand from electrification, such as trams and replacing fossil fuel systems.

The Maià wind farm fits within the framework but is excluded from the initial tranche. Remaining funds could support it or other sustainable initiatives. Forné described the outcome as "a beautiful thing" that enhances European ties and Andorra's global standing, while Lladós called it "a very good sign," crediting strong EU relations and Andorra's pioneering non-EU status in EIB programs.

The loan offers a 22-year term with three years' grace—terms matching those for EU peers with Andorra's credit rating. Lladós highlighted the benefit: projects can generate returns before repayments begin, an "exceptional" feature.

The initiative diversifies funding, maintains low debt, and cuts import reliance amid global energy pressures. It aligns with the EIB Group's 2024-2027 strategy and Climate Bank's 2026-2030 phase. In 2025, the EU's lending arm, owned by its 27 members, committed €100 billion to over 870 high-impact projects in climate, digitalization, infrastructure, and more.