The European Investment Bank (EIB) is providing a €450m ($477m) loan to Red Eléctrica de España so it can extend and improve its electrical transmission network in Spain.

At a ceremony in Madrid, EIB Vice-President Román Escolano and REE chief executive Juan Lasala Bernard signed a financing agreement that they said would help to safeguard Spain’s future electricity supply.

The EIB financing will fund investments across mainland Spain and the Balearic and Canary Islands, covering a total of more than 1500 km of new power lines, of which more than 200 km will run under the sea.

Red Eléctrica has a strategic plan to boost power infrastructure connecting Spain with France and Portugal and also optimise electricity supply across the Spanish mainland.

Construction projects include a new high-voltage power line connecting Asturias and Galicia in the north and another between Extremadura and Andalusia in the south.

A major investment will be the construction of an undersea connection between Ibiza, Majorca and the mainland to secure electricity supply on the islands.