The European Investment Bank (EIB) has approved a €300 million (US$326.32 million) loan to finance the construction of the Salto de Chira pumped-storage hydroelectric power plant being built by Red Eléctrica, a subsidiary of Redeia, in Gran Canaria in Spain.

The Salto de Chira power plant will use a system of two water reservoirs at different heights. The two existing reservoirs, Chira and Soria, will create an electricity-generating waterfall, using the water stored in the upper reservoir to produce energy through an underground hydroelectric plant.

At times of peak renewable energy generation, the excess power will be used to pump water from the lower reservoir (Soria) to the upper one (Chira), storing this energy in the form of water. The water will then be used to generate electricity at times of high demand and low electricity generation from renewable sources. It will have a installed power capacity of 200 megawatts and energy storage capacity of 3.5 gigawatt-hours.

“We are delighted to join forces with Red Eléctrica to support the construction of the Salto de Chira hydroelectric power plant. This project is key to ensuring energy autonomy and driving the green transition in Gran Canaria,” says Jean-Christophe Laloux, director general of operations, European Union, at the EIB. “The project will improve electricity supply quality and security on the island using existing resources and reflects the EIB’s commitment to territorial cohesion and climate action, two of our strategic priorities.”

The investment is expected to have a positive impact on the economy of the Canary Islands, an EU-designated cohesion and outermost region, by driving growth and job creation, and backs the EIB Group’s commitment to economic, social and territorial cohesion.

“Storage will be one of the key elements in the energy transition, providing flexibility and manageability to the electricity system to integrate large amounts of renewable energies, thus contributing to electrification and access to renewable energy, which is especially important for an electricity system like the Canary Islands, which is isolated and therefore more vulnerable," says Redeia CEO Roberto García Merino. 

The project contributes to the decarbonization 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.