EIB and CEPSA sign EUR 285 mil loan to finance second-generation biofuels plant

The European Investment Bank (EIB) on Thursday (27 June) said it signed a EUR 285 million (USD 307 million) loan agreement with Cepsa for the construction of an advanced biofuels plant to be located next to La Rábida Energy Park in Palos de la Frontera, Andalusia.

The plant, which Cepsa is building together with Bio-Oils, will produce sustainable aviation fuel (SAF) and renewable diesel (HVO), from organic waste such as used cooking oil or from agricultural waste, advancing the circular economy. 

Once operational, the facility is expected to process as much as 600,000 tonnes of waste and produce up to 500,000 tonnes of second-generation biofuels annually.

The biofuels will serve industries such as aviation, maritime transport and even heavy-duty road transport for which decarbonisation and electrification pose challenges. Biofuels are an immediate solution to reduce CO2 emissions from this sector, without making changes to existing engines.

“This loan is a clear example of how the EIB promotes the energy transition also in hard to abate sectors. This project will contribute to make Spain one of the leading countries in the production of biofuels,” said Gilles Badot, director of EIB operations for Spain and Portugal.  

“Supporting private companies like Cepsa, which are investing in this transition and advancing their own decarbonisation strategies, is one way the EIB is accelerating the transition to a more sustainable energy model that promotes EU energy autonomy.”

The investment by Cepsa and Bio-Oils will be made entirely in Andalusia, a cohesion region where per-capita income is below the EU average. Given the project scope, it is expected to have a positive impact on the local economy by boosting growth and job creation. As a result, the loan signed with Cepsa makes a significant contribution to the EIB’s commitment to economic, social, and territorial cohesion.

“We are grateful for the EIB’s support to this project, which is key to our Positive Motion strategy and to Spain’s and Europe’s progress towards the necessary energy independence. This plant will enable us to take a giant step forward in the production of green molecules, with the aim of facilitating the immediate decarbonisation of land, sea and air transport by reducing CO2 emissions by up to 90% compared with traditional fuels,” said Maarten Wetselaar, Cepsa’s CEO.

This project supports the decarbonisation objectives of the European Green Deal. It is also part of the EIB’s action plan to support REPowerEU in ensuring energy security and reducing EU dependence on fossil-fuel imports.

The project is supported by InvestEU, an EU programme to mobilise more than €372 billion of additional investment in the period 2021-2027. It furthers one of the programme’s main objectives: developing the energy sector and the sustainable bioeconomy.

With this new arrangement, the EIB is continuing to support Cepsa’s decarbonisation strategy. It is the third financing operation with Cepsa in the last two years to accelerate this strategy. 

The previous two were a loan of EUR 80 million for photovoltaic plants in Andalusia and a loan of EUR 150 million for Cepsa’s network of electric charging stations in Spain and Portugal.

Photo credit: European Investment Bank
Published: 1 July, 2024