Compañía Española de Petróleos SAU, or Cepsa, and Masdar entered an agreement to establish a joint venture company for the development of renewable energy projects in Spain and Portugal.

The new company, Cepsa Masdar Renovables, will focus on developing wind and solar photovoltaic projects on the Iberian Peninsula, with an initial capacity target of 500 MW to 600 MW. The two companies first announced their intention to partner in the region in January 2019.

"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 CEO Mohamed Jameel Al Ramahi said in a Jan.15 news release.

Portugal wants renewable energy to make up 80% of its total electricity demand by 2030, while Spain is targeting a 74% share by the end of the decade, according to a Jan. 15 release.

Masdar is a subsidiary of Abu Dhabi's sovereign wealth fund Mubadala Investment Company PJSC, while Cepsa is owned by Mubadala and U.S. asset manager Carlyle Group LP.