Neoenergia Secures R$857 Million EIB Green Loan to Modernize Brazil Grids

Neoenergia, a company of the Spanish Iberdrola Group, and the European Investment Bank announced on 22 October 2026 a signed green loan to finance the expansion and modernization of the electricity distribution network operated by Neoenergia Elektro in the Brazilian states of São Paulo and Mato Grosso do Sul. Neoenergia stated the financing as 857 million Brazilian reais (R$857 million), while the EIB stated the same agreement as 150 million euros (€150 million). The EIB loan is guaranteed by Cesce, the Spanish export credit agency, and the EIB said the transaction is its first financed operation with Neoenergia backed by a Cesce guarantee supporting green projects led by Spanish subsidiaries outside Spain.

Signed through the bank’s development arm EIB Global, the loan supports an investment programme with a total cost of around €342 million that is to be implemented between 2027 and 2030, according to the EIB. The bank’s project register entry for the operation, NEOENERGIA POWER DISTRIBUTION IV under reference 20250341, lists Elektro Redes SA as promoter and records Board approval on 3 July 2026 and a contract signature date of 29 July 2026, with a signed amount of €150,250,439.36.

“We are celebrating a significant step forward in our record investment plan for Neoenergia Elektro by accelerating the modernisation and improvement of the distribution grid,” said Neoenergia CEO Eduardo Capelastegui in Iberdrola’s announcement. He said the company’s priority is to provide an increasingly reliable, efficient and high-quality service.

“Modern and resilient electricity networks are essential for the green transition and for ensuring reliable access to energy,” said EIB Vice-President Ioannis Tsakiris in the bank’s release. He said the financing will help improve the quality of electricity supply for communities and businesses in São Paulo and Mato Grosso do Sul, enable renewable energy connections and support Brazil’s long-term climate objectives, and that the operation reflects the European Union’s Global Gateway commitment to sustainable infrastructure and strong partnerships in Latin America.

Cesce CEO Pablo de Ramón-Laca said the project shows how long-term partnerships with institutions such as the EIB can channel sustainable investment into projects that benefit local communities, strengthen economic growth and promote renewable energy. Francisco André, the European Union’s ambassador to Brazil, called the investment a strong example of the European Union’s Global Gateway strategy turning shared climate ambitions with Brazil into concrete action.

Programme Scope and Policy Alignment

The programme will finance the refurbishment and modernization of distribution lines, substations, control and protection systems and network automation, together with measures to reduce technical losses; the register additionally lists the extension of lines and measures to reduce commercial losses. According to the parties’ releases, the investments are intended to strengthen the reliability and resilience of the network, expand and modernize its capacity and facilitate connections for new users, including low-income households and renewable energy generators.

The parties state that the operation will contribute to Brazil’s Ten-Year Energy Expansion Plan, which prioritizes energy efficiency, grid modernization and the integration of renewable energy, and the register states that the project is aligned with the Plano Decenal de Expansão de Energia 2034. The project is fully dedicated to climate action and supports the European Union’s Global Gateway Investment Agenda for Latin America and the Caribbean, according to the releases.

According to the register, most envisaged project schemes, those below 69 kilovolts in voltage or under 20 kilometres in length, are exempt from environmental licensing under CEPRAM Resolution No 4119/2010 and Decree No 18218 of 26 January 2018. Investments are expected mainly in urban and suburban areas, and no major environmental or social impacts are expected, the register states, adding that the promoter must implement the project in accordance with the EIB’s Guide to Procurement. The bank published the project’s Environmental and Social Data Sheet on 19 August 2026.

The releases state that the EIB financing provides stable, long-term funding for capital-intensive grid investments and will help Neoenergia Elektro implement a broader modernization programme, reduce refinancing risk and mobilise complementary financing from commercial banks and capital markets. The investment programme is also expected to increase women’s participation in the energy sector, including in technical roles, professional training and leadership positions.

Neoenergia Elektro serves more than 3 million customers across 223 municipalities in São Paulo and five municipalities in Mato Grosso do Sul. According to the EIB, Neoenergia has operated in Brazil since 1997, is the country’s leading electricity company in number of customers and is present in 18 states and the Federal District. Its five distributors, Neoenergia Coelba, Neoenergia Pernambuco, Neoenergia Cosern, Neoenergia Elektro and Neoenergia Brasília, serve approximately 17 million customers, equivalent to a population of nearly 40 million people, and the company has 3.9 gigawatts of installed generation capacity, 86% from renewable sources, and operates more than 8,000 kilometres of transmission lines.

Brazil is the biggest beneficiary of EIB financing in Latin America, the bank states, with over €6.44 billion provided since it began working in the country in 1997, representing around 35% of the EIB’s portfolio in Latin America. In 2025, the EIB Group signed €100 billion in new financing and advisory services for over 870 projects.

Previous Bahia Grid Financing

The loan is the second financing agreement between the EIB and Neoenergia in less than a year, according to the releases. On 11 November 2025, during the COP30 UN climate conference in Belém, the parties announced a green financing agreement for Bahia’s electricity grid through distributor Neoenergia Coelba. The EIB’s release stated that financing as €300 million, while Iberdrola stated it as R$1.7 billion, and the EIB and Neoenergia records state the Bahia contract was signed in July 2025. That financing supported the expansion of the electricity grid, the construction of new connections and investments in automation equipment, granted on competitive commercial terms following a rigorous technical and environmental due diligence process. Neoenergia Coelba serves more than 6 million customers across 415 municipalities in Bahia.