Abu Dhabi-based clean energy firm Masdar and Spain's Cepsa agreed to establish a joint venture to develop renewable energy projects in the Iberian Peninsula.
The 50:50 joint venture called Cepsa Masdar Renovables will focus on developing wind and solar photovoltaic projects with an initial target of 500 to 600 megawatts in Spain and Portugal.
"The Iberian Peninsula is an attractive location for renewable energy investors and we look forward to expanding our renewable energy portfolio further into the region, while strengthening our partnership with Cepsa," Masdar chief executive Mohamed Al Ramahi said in a statement.
Cepsa, which is majority-owned by Abu Dhabi's Mubadala Investment Company through their petroleum and petrochemicals division, has previously explored venturing into renewables with Masdar. Mubadala sold its 37 per cent stake in the Spanish firm – which is Europe's biggest privately-owned energy company - to the US-based Carlyle Group in October.
Cepsa, which has an extensive network of retail service stations across the Iberian Peninsula, is a world leader in the production of linear alkyl-benzene (LAB) – a component used in the manufacture of biodegradable detergents.
"As a global energy company, we are building a diversified business portfolio. Renewable energy is one of the fundamental pillars of the energy transition and one of the fields in which we want to expand our presence," said Cepsa chief executive Philippe Boisseau.
Renewables accounted for more than half of Portugal's electricity demand in 2019, with the country targeting 80 per cent clean power by 2030. Spain, meanwhile, is looking to reach 74 per cent electricity generation from clean power sources by the end of the decade.
Cepsa operates a 28.8MW wind farm in Cadiz in southwestern Spain, powering more than 20,000 homes annually. Masdar, which has been present in the country since 2009 through its venture with Torresol Energy operates a commercial-scale solar thermal plant in Cadiz as well as Seville.