Project detail - Acciona Financiacion Filiales S.A.

Who is our customer?

The transaction consists of a USD 95 mln B-loan behind IFC, to participate in an unsecured corporate facility to Acciona Financiación Filiales, S.A. (“AFF”, the “Borrower”), with a tenor of 7 years. The transaction is fully guaranteed by Acciona S.A. (“Acciona” or the “Guarantor”), rated BBB (low) stable by DBRS Morningstar (2024). Acciona is a large Spanish corporation (listed in the IBEX 35 index; EUR 6.5 bln market capitalization) and has maintained its investment grade rating for the past 10+ years. AFF is a financial holding company based in Spain that was set up to raise financing and provide funding to sub-holdings of the Group.

What is our funding objective?

The total financing of the project is estimated at USD 600 mln. FMO is participating as a B-lender under the IFC facility with an amount of USD 95 mln. The financing proceeds are used to finance three power transmission projects in Peru (increasing the capacity of existing transmission lines, building new transmission line capacity, and building new substations).

Why do we fund this investment?

The three projects in Peru contribute to decarbonizing the country’s energy mix by increasing the penetration of renewables, which is still heavily reliant on fossil fuels (38% of electricity production in 2021). One of the projects is in southern Peru, a region with strong renewable resources but is experiencing curtailment. The other two projects are in the north, which is a low-income, isolated region that still relies on diesel for grid stability. The transmission lines will allow an increased flow of energy in the Peru-Ecuador interconnection system. As such, the transaction fits well with the transmission & distribution strategy by increasing FMO’s investments in the electricity transmission sector. The FMO Green Label was approved for the transaction.

What is the Environmental and Social categorization rationale?

FMO's E&S category for this transaction is A, reflecting key environmental and social (E&S) risks related to potential impacts to communities and economic displacement due to land use change in the transmission lines in Peru, and potential biodiversity impacts through bird collisions. According to the information currently available, the following IFC Performance Standards are triggered: PS 1: Assessment and Management of Environmental and Social Risks and Impacts, PS 2: Labor and Working Conditions, PS 3: Resource Efficiency and Pollution Prevention, PS 4: Community Health, Safety, and Security, PS 5: Land acquisition and involuntary resettlement, PS 6: Biodiversity conservation and sustainable management of living natural resources, and PS 8: Cultural Heritage. IFC PS 7 (Indigenous Peoples) is not triggered as the projects are not expected to affect Indigenous Peoples in the area.