The European Investment Bank (EIB) is pledging €1.6 billion to finance the construction of the Bay of Biscay electricity interconnection between Spain and France. The EIB financing for the Bay of Biscay project takes the form of loans to Spanish and French transmission-system operators Red Eléctrica and RTE Réseau de transport d’électricité.

The parties signed first loan tranches totalling €1.2 billion today at the EIB headquarters in Luxembourg. The event was attended by Nadia Calviño, president of the EIB Group, Dan Jørgensen, European Commissioner for Energy and Housing, Marc Ferracci, French minister of Industry and Energy, Miguel González Suela, Spanish deputy secretary of State - for Ecological Transition and the Demographic Challenge, Beatriz Corredor, chairwoman of Redeia, parent company of Red Eléctrica and Thomas Veyrenc Member of the Executive Board, director general for Finance, Strategy and Economics of RTE. This financial support adds up to the €578 million EU grant allocated to this project under the Connecting Europe Facility. 

This is a landmark Project of Common Interest in which the EIB, the European Commission, Red Eléctrica and RTE are joining forces to strengthen cross-border electricity interconnections and hereby the overall European energy system.

“EIB support for the France-Spain electricity interconnection will be key to ensuring that the Iberian Peninsula is no longer an energy island. This agreement will lead to a major shift in energy integration, an important area for EU competitiveness and strategic autonomy.”  said Nadia Calviño, president of the EIB Group”. 

“Europe needs more integrated and more interconnected energy systems and markets. This is crucial to ensure our citizens have access to clean and stable supplies, wherever they are. This is what a genuine Energy Union is about, “said Dan Jørgensen, European Commissioner for Energy and Housing. “I very much welcome the additional financial support offered by the EIB for a key project that will ultimately improve the lives of many across the Pyrenees and beyond.”

Construction of the Bay of Biscay link is already under way by Inelfe – joint venture by RTE and Red Eléctrica, and it is due to become operational in 2028. Once operational, the project will almost double the electricity exchange capacity between France and Spain to 5,000 MW. That means cleaner, more secure, and more affordable power for millions of citizens, while avoiding 600,000 tonnes of CO₂ each year. 

The project will strengthen the interconnection capacity between France and Spain, helping the Iberian peninsula’s progress towards the EU interconnection target for Member States of at least 15% of installed production capacity by 2030. The Bay of Biscay project, together with the underground project between Baixas-Santa Llogaia and the improvement of the existing Argia-Hernani infrastructure will contribute to enhance the interconnection capacity between the Iberian Peninsula and the rest of Europe, while better integrating it within the EU energy market.

‘Today, with the support of the EIB, we take another step forward in this project, a bridge between nations and key for European cohesion that will enable us to tackle the greatest challenge of our time: the energy transition. That is why both countries must continue to work together to strengthen our connections, also through the two new projects planned to cross the Pyrenees’, said Beatriz Corredor, chairwoman of Redeia

“Today is a major milestone for the Bay of Biscay project, which will increase the solidarity between France and Spain but will also contribute to the development of exchanges of low-carbon, competitive electricity throughout Europe. Along with EU institutions – such as EIB – and other European TSOs, RTE is committed to ensure that the French power grid is fit to play its role of a European electricity crossroads, including through major reinforcement projects to avoid internal constraints, as laid out in our recent grid development strategy’, said Thomas Veyrenc, Member of the Executive Board, Director general for finance, strategy and economics of RTE.

The project reinforces the EIB´s role as the climate bank one of the EIB Group's eight strategic priorities set out in its Strategic Roadmap for the years 2024-2027. The operation is also part of the EIB’s action plan supporting REPowerEU, the program to increase energy security and accelerate the energy transition by reducing the European Union’s dependence on fossil fuel imports.

Marc Ferracci, French minister for industry and energy: “We’re very happy today to have signed the first part of the investment in this interconnection project between France and Spain which will go through the Bay of Biscay. This will allow us to double the capacity of electricity transported between the two countries with 400 km of connection. It’s very important because it illustrates the will of Spain and France to go further in the decarbonisation of our economies. And it shows the solidarity that exists to meet Europe’s energy security challenge.”

“The signing of this agreement marks a major step towards building the Energy Union and strengthening the resilience of the European electricity system as a whole. I am confident that it will not be the last”, said Miguel González Suela, Spanish deputy secretary of State for Ecological Transition and the Demographic Challenge.

Flagship project 

The Bay of Biscay interconnection is classified by the EU as a Project of Common Interest or PCI, and is being delivered by Inelfe a joint venture between Red Eléctrica and Réseau transport d’électricité. It is co-funded by a Connecting Europe Facility (CEF) grant of €578 million.  

The connection will link two alternating current systems via a submarine direct current line. At each end of the connection, stations in Cubnezais in France and Gatika in Spain will convert the direct current into alternating current for connection to the transmission grids of Spain and France.

The design of the project has been developed through an open and participatory process, with the aim of reaching the greatest possible consensus and ensuring the best solution from a technical, social, and environmental perspective.

The High-Level Group on Interconnections in South-West Europe, established in 2015 between Spain, France, and Portugal with the support of the European Commission, played a critical role in advancing the Biscay Bay project.

More information about the project is available here.

The EIB as a major financier of energy security and grids in Europe

In 2024, the EIB Group signed a record €31 billion to back EU energy security, including for efficiency, renewables, storage and electricity grids, which is expected to support over €100 billion in investment. A total of €8.5 billion financed electricity grids and storage projects, double the amount from previous year. This financing is helping to expand, modernise and digitalise electricity grids making them more resilient and allowing for more and better integration of renewable sources.

In Spain financing of energy security projects was higher than in any other EU country in 2024, totalling more than €5 billion, which is expected to support over €15 billion in investment. A total of €1.54 billion financed grids and storage projects, roughly double the previous year’s amount. In France financing of energy security projects in 2024 was in line with previous years at around €3.6 billion,  of which €400 million went to finance grids and storage projects, while €3.2 billion went to other energy projects including renewable energy sources and  energy efficiency. 

In the last 5 years (2019-24), EIB has financed €16.7 billion in energy projects in Spain, and €17.7 billion in energy projects in France.