Iberdrola confirms its commitment to Andalusia, where installed wind capacity is set to rise 60% by 2010

At this meeting, held at the regional government’s headquarters in Seville, Ignacio Galán outlined to José Antonio Griñán the company’s recent successes which have seen it become one of the five leading utilities in the world and one of the four largest companies on the Spanish stock exchange. He also explained its strategy, growth plans and overseas expansion plans. IBERDROLA is currently the leading wind energy producer and one of the world’s major utilities, employing 33,000 people in over 40 countries.

Against this backdrop, Mr. Galán confirmed IBERDROLA’s commitment to Andalusia where it invested some €2.5bn in 2002-2008. He also noted that service purchases and contracts made by 200 regional companies during that time totalled €500mn. This brings the combined financial impact of the company’s investment in the region to €3bn.

Turning to renewable energies the IBERDROLA chairman highlighted the company’s role in Andalusia where it has become the region’s leading wind power producer with 548 MW of installed capacity. It has 18 wind farms in the provinces of Almeria, Cadiz, Malaga and Granada. The El Marquesado wind farm in Granada is the largest in Andalusia and, with installed capacity of 198 MW, one of the biggest in Europe.

Ignacio Galán also referred to the renewable projects about to be developed in the region. Of particular interest is the installation of 336 MW of wind power which, according to company estimates, will come on stream at the end of 2010 and boost the region’s installed wind capacity by 60% to 884 MW.

He also noted that IBERDROLA has other types of power plants in the region, including one of the most advanced and innovative natural gas power plants, the Arcos de la Frontera combined cycle plant. Boasting installed capacity of 1,600 MW, this facility can provide power to 35% of the region’s population.

Mr. Galán also demonstrated to the region’s President the company’s firm commitment to research and development, having invested €200mn in Spain over the past three years. In this regard he wished to highlight two initiatives currently under way in Andalusia: a joint project with the Almeria Solar Platform to develop an innovative absorbent tube and a project concerning the manufacture of a microalgae-based biofuel in conjunction with the universities of Seville and Almeria. The two initiatives entail a joint investment of €16mn.

The company also has close ties with technological centres, universities and technology providers in Andalusia, mainly involving renewable energy and environment-related projects. These include the construction of bioclimatic homes in Jun (Granada); the demand management project, aimed at optimising electricity consumption; and other direct steam generation activities developed under the auspices of the Almería Solar Platform.

IBERDROLA actively collaborates with the advanced technological centre for renewable energies in Andalusia and the Technological Corporation of Andalusia of which it is a trustee and founding member.


IBERDROLA placed a $2 billion bond issue in two $1 billion tranches of five and 10 years in the U.S. market, the first such operation by a Spanish energy sector company in this country and aimed at cementing the foundations for future growth in a market it considers strategic.

The issue, which met $6.6 billion in demand, more than triple the initial offering, was placed with 180 new qualified institutional investors, thereby expanding Iberdrola’s investor base. The success of the issue underlines U.S. investor interest in the Company and its ability to secure funding in diverse markets.

The spread was set at 108 basis points over dollar swaps for the 5-year tranche and 140 basis points over 10 years, improving on conditions obtained by other companies with similar ratings in dollar operations over equivalent maturities in the U.S. market.

Citigroup coordinated the issue and lead managers were Barclays Capital, Bank of America, Citi, Merrill Lynch and Goldman, Sachs & Co.

With this operation in bonds, IBERDROLA also diversifies its sources of funding, accessing a market which currently offers more depth and liquidity than Europe, as well as more attractive conditions, while reducing the weighting of its debt with banks.

It also strengthens the Company’s finances and increases liquidity to around/above €11 billion, enough to meet funding needs for 2009 and 2010. It follows other capital market issues by IBERDROLA over the past two years totalling €7.5 billion, as a result of which the average life of its debt has risen to above 6 years.