The renewables division of the French power giant EDF and Repsol, a Spanish energy company, have agreed to work together in auctions for offshore wind in Spain and Portugal.

The companies announced on Thursday that they had signed an exclusive agreement to collaborate in future auctions as the Iberian Peninsula "offers significant opportunities for growth".

They said that the partnership will leverage Repsol's expertise in Spain and Portugal, and EDF Renewables offshore wind expertise.

Repsol's move fits in with its strategy to diversify into renewables, from its traditional oil-and-gas core business.

The Spanish company has set aside up to 4 billion euro ($4.37 billion), through 2027, to develop its renewable project portfolio. It expects to reach 9-10 GigaWatts in installed renewable capacity by then, mainly in the Iberian Peninsula and the United States.