The European Investment Bank (EIB) has approved a €300 million loan to finance the construction and commissioning of the Salto de Chira pumped-storage hydroelectric power plant, which is being built by Red Eléctrica, a subsidiary of Redeia, in Gran Canaria.

The Salto de Chira plant will use a system of two reservoirs at different heights to store or release energy from renewable sources, depending on the needs of the electrical system.

It will have a capacity of 200 MW and an energy capacity of 3.5 GWh, enabling the plant to make use of surplus renewable production that would otherwise be lost, at times when the system needs it.

This will help improve the quality and security of the electricity supply and facilitate greater integration of renewable energy into the electrical system on the island of Gran Canaria.

The project also includes the construction of a seawater desalination plant to support water storage, which is expected to have a positive impact on access to irrigation water for agricultural communities.

“We are delighted to join forces with Red Eléctrica to drive the construction of the Salto de Chira hydroelectric power plant, a key project to ensure energy autonomy and advance the ecological transition in Gran Canaria,” commented Jean-Christophe Laloux, EIB Director General for EU Operations.

“The project will enhance the quality and security of the electricity supply on the island by utilizing existing resources, and reflects the EIB’s commitment to territorial cohesion and climate action, two of our strategic priorities.”

The investment is entirely located in the Canary Islands, a cohesion and outermost region, so it is expected to have a positive impact on the local economy, promoting growth and job creation, and contributing significantly to the EIB Group’s commitment to economic, social, and territorial cohesion.

For his part, the CEO of Redeia, Roberto García Merino, highlighted the importance of this project and energy storage to advance renewable energy penetration: “Storage will be a key piece of the energy transition, providing flexibility and manageability to the electrical system to integrate large amounts of renewable energy, thus contributing to electrification and access to renewable energy—especially important for an isolated electrical system like the Canary Islands, which is more vulnerable.”

Once operational, the pumped-storage hydroelectric plant will be a fundamental tool for the operation of the system, providing essential flexibility for replacing fossil energy sources and ensuring the safe and reliable integration of renewable resources, mitigating the interconnection challenges of the Canary Islands’ electrical systems.

This project contributes to achieving the decarbonization objectives of the European Green Deal and is part of the EIB’s action program to support the REPowerEU plan, which aims to ensure energy security and reduce the European Union’s dependence on fossil fuel imports.

Operation of the Salto de Chira Pumped-Storage Plant

The plant will use two existing dams on the island of Gran Canaria, Chira and Soria, to create a water drop that utilizes renewable energy stored as water in the upper reservoir to generate power through an underground hydroelectric plant, reducing its impact on the environment.

To do this, during hours of high renewable generation, surplus energy will be used to pump water from the lower reservoir (Soria) to the upper one (Chira), storing this energy in the form of elevated water, which will then be used during periods of high demand and low renewable generation.

The project also includes the construction of a seawater desalination plant, which will be used to fill reservoirs and provide a direct benefit to the agricultural communities in the area, with any water not required for the operation of the plant.

EIB and Energy Security

In 2023, the EIB Group signed financing agreements worth more than €21 billion for energy security in Europe. In Spain, this amounted to €4.513 billion, allocated to financing renewable energy projects, energy efficiency, electrical grids, and storage systems, among others. These investments are helping Europe accelerate the transition to sustainable energy use and reduce dependence on fossil fuel imports.

In July 2023, the EIB’s Board of Directors decided to increase the funds allocated to REPowerEU projects to €45 billion, the plan designed to end Europe’s dependency on fossil fuel imports.

The EIB has also decided to expand the range of eligible sectors to promote financing for the EU manufacturing industry in cutting-edge, net-zero carbon technologies, as well as the extraction, processing, and recycling of critical raw materials.

This additional financing will be distributed through 2027, and it is expected to mobilize over €150 billion in investments in the targeted sectors.