The European Investment Bank (EIB) has announced a €1.6 billion investment in the Bay of Biscay electricity interconnection, a landmark project connecting Spain and France via a 400 km power link--300 km of which runs underwater. The project is a key part of the EU's energy strategy and aims to nearly double the electricity exchange capacity between the two countries from 2,800 MW to 5,000 MW.

The funding supports Red Eléctrica and RTE (Réseau de Transport d'Électricité)--the respective transmission system operators in Spain and France. Initial loan tranches of €1.2 billion were signed on June 16, 2025, at the EIB headquarters in Luxembourg.

The Bay of Biscay link is classified as a Project of Common Interest (PCI) by the EU and is co-financed with a €578 million Connecting Europe Facility (CEF) grant. Once operational in 2028, it will help improve power reliability, reduce COâ‚‚ emissions by an estimated 600,000 tonnes annually, and strengthen the EU's internal energy market.

Developed by Inelfe, a joint venture between RTE and Red Eléctrica, the project supports EU targets of 15% electricity interconnection capacity by 2030 and aligns with the REPowerEU initiative to reduce dependency on fossil fuel imports.