Norges Bank Investment Management has agreed to buy 49 percent of a 674 MW solar and wind portfolio in Spain and Portugal from Iberdrola. None of the projects is running yet. Norges Bank will not take ownership until they are. It is paying a price today for assets it only acquires once the risk of building them has passed to someone else.
Key takeaways
- Norges Bank Investment Management announced on 17 January 2024 that it had agreed to acquire a 49 percent stake in a 674 MW solar and wind portfolio in Spain and Portugal from Iberdrola for about $334.68 million.
- The $334.68 million Norges Bank is paying for 49 percent of Iberdrola's 674 MW Iberian portfolio reflects an enterprise value of $683 million for 100 percent, or about $1.01 million per MW.
- Norges Bank will take ownership of its 49 percent stake in the Iberdrola portfolio only after the projects start operating, expected in 2025 and 2026, while Iberdrola keeps 51 percent and continues as co-owner.
- The 674 MW Iberdrola portfolio sold to Norges Bank comprises two solar and two wind projects, with solar making up about 60 percent of capacity and wind about 40 percent.
- Iberdrola and Norges Bank plan to invest more than about $2 billion jointly over three years to add 1.3 GW in the Iberian Peninsula, taking their shared portfolio to 2.6 GW.
What is Norges Bank actually buying?
It is buying a future minority stake in finished assets, agreed at today's price. The four projects are under development, and Leap records them as ready-to-build, meaning permits are in place and construction can start. They are due to be completed in 2025 and 2026 and should power about 350,000 Spanish households a year.
The key clause is the timing of ownership. Norges Bank assumes ownership after the projects begin operations. Until then, construction risk, cost overruns and delays stay with Iberdrola. Norges Bank has committed capital and a price, but it does not hold an asset that can go wrong during the build.
Iberdrola keeps 51 percent and remains co-owner and operator. That keeps the developer's incentives aligned with the investor's. Iberdrola is not selling and walking away. It is selling a minority stake in assets it will continue to run.
Why does the price look like $0.50 million per MW but is not?
Because the consideration is for 49 percent, not the whole portfolio. Divide $334.68 million by 674 MW and the deal appears to price at about $0.50 million per MW. That compares half a portfolio with all of its capacity.
The correct comparison grosses the stake up to 100 percent. The record gives that figure directly: an enterprise value of $683 million for the whole portfolio. On that basis the price is about $1.01 million per MW, twice the naive number. Any benchmark that uses the unadjusted figure will make this look like one of the cheapest Iberian deals of the period when it is nothing of the kind.
The structure also explains why there is no leverage. No external debt financing is involved in the transaction. A sovereign wealth fund buying a stake it will only hold once the assets are operating has little need to borrow against it.
How does this deal build on the 2023 partnership?
It is the second step in a programme, not a one-off. In January 2023 Norges Bank bought 49 percent of an Iberdrola renewable portfolio in Spain for about $650 million. Leap records that portfolio at 1,265 MW, which grosses up to about $1.05 million per MW for 100 percent. The 2024 deal is priced within a few percent of the first, a year later, on a smaller and more mixed portfolio.
Iberdrola and Norges Bank describe the new deal as doubling their clean energy investment alliance. The stated plan is to add 1.3 GW in Iberia to reach 2.6 GW together, and the agreement may extend to other countries. Leap also records a further Norges Bank deal with Iberdrola in April 2024, for 49 percent of a 644 MW solar portfolio in Spain at about $217 million.
Enerdatics records 31 Iberian solar transactions with a disclosed value across 2023 and 2024. On a 100 percent basis, the larger priced Spanish portfolios cluster around $0.86 million to $1.00 million per MW: Capital Dynamics' 317 MW at about $0.86 million, China Three Gorges' 494 MW Mula plant at about $0.91 million, Allianz Capital Partners' 300 MW from Grenergy at about $0.95 million and DWS' 131.68 MW from X-Elio at about $1.00 million. Norges Bank's $1.01 million sits at the top of that cluster. Smaller single plants have priced higher, such as ERG's 149 MW at about $1.26 million. The comparison is not exact, because 40 percent of the Iberdrola portfolio is wind, while every comparable here is solar.
What does the deal signal for Iberian renewables?
It signals that patient capital will pay a full price for de-risked minority stakes in Iberia, provided the developer keeps control and carries the build. The pricing of Allianz's Grenergy purchase, discussed in Allianz paying Grenergy a fifth less per MW, shows how much timing and stage can move a Spanish solar price. Norges Bank avoids that question by paying for operating assets it has not yet received.
It also shows the template Iberdrola uses to recycle capital. Selling 49 or 50 percent of a project to a long-term investor while keeping control is a recurring move, from Iberian solar to offshore wind, as in Masdar's East Anglia 3 stake. Other utilities have worked the same market from the opposite side, buying out partners rather than bringing them in, as when ENGIE took majority control of Spain's Goya wind.
The open question is what Norges Bank's price assumes about the power market in 2025 and 2026. It agreed the number in January 2024. It will start earning on it only when the turbines and panels are running.
Frequently asked questions
How much is Norges Bank paying Iberdrola for the 674 MW portfolio? About $334.68 million for 49 percent, based on an enterprise value of $683 million for 100 percent of the portfolio.
When does Norges Bank take ownership of the Iberdrola stake? After the projects start operations. They were under development at signing and expected to be completed in 2025 and 2026.
Is the Norges Bank and Iberdrola deal financed with debt? No. No external debt financing is involved. Clifford Chance acted as legal advisor to Norges Bank.
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