The European Investment Bank ( EIB ) has signed two loans totalling €430 million for the construction of two key projects aimed at transforming Galp’s refinery in Sines, Portugal.

Galp, an energy company listed on Euronext Lisbon, is developing a biofuels unit, already at the construction stage, in partnership with Japan’s Mitsui. The project is part of a €400 million investment, of which €250 million is provided by the EIB.

This unit will convert vegetable oils and residual fats into sustainable aviation fuel ( SAF ) and renewable diesel of biological origin ( hydrotreated vegetable oil, HVO ), which have characteristics identical to those of fossil-based fuels used in regular combustion engines.

The facility, set to start production in 2026, will have a capacity of up to 270,000 tonnes of reusable fuels. This is enough for Portugal to comply with the European Union mandate for this type of fuel.

SAF is essential for air transportation – responsible for about 3% of global greenhouse gas emissions – to begin its decarbonization journey.

Galp is also building on the same site a 100-megawatt electrolyzer, which will produce up to 15,000 tonnes of renewable hydrogen per year when it goes online next year, becoming one of the first operational units of its size in Europe. The project will involve an investment of €250 million, of which the EIB will finance €180 million.

 “These pioneering projects are a clear example of how we can combine financing, innovation, and our environmental commitment to promote a fair and sustainable energy transition,” says Jean-Christophe Laloux, director general, head of EU lending and advisory, at the EIB. “By supporting the production of advanced biofuels and renewable hydrogen, we are contributing to a more energy-independent Europe that aligns with global climate goals.”

“We have mobilized partners, private investment, and European financing to drive a transformative project that brings European and national energy and industrial policies to life,” says Ronald Doesburg, Galp’s executive board member responsible for the industrial area. “More is needed from energy companies, public funding and government support if we want to maintain Portugal’s relevance in an increasingly unstable world.”

The two projects support the goal of climate neutrality by 2050, in line with the European Green Deal, and strengthen the EU’s energy independence as outlined in the REPowerEU plan.