Spain has signed a partnership agreement with China's Envision Group, an eco-energy company, to launch four projects, including a plant to produce batteries for electric cars, with a total investment of 3.8 billion euros, partly financed by European Union aid, Reuters reported.

Jose Dominguez, head of Envision Spain said the projects will be developed with Spain's Acciona Energia, a renewable energy company, but did not elaborate on its role.

The battery "giga-factory" in Navalmoral de la Mata in the central-western region of Extremadura, will require 2.5 billion euros in investment and could create as many as 3,000 jobs, the statement said.

Extremadura is one of Spain's poorest regions, which also has large lithium reserves.

This would be the second project to produce batteries for electric cars in Spain, Europe's second-largest car manufacturer.

German automaker Volkswagen AG said it and its partners will invest 10 billion euros ($10.6 billion) in electric car and battery production in Spain.

Volkswagen intends to begin building a 40 gigawatt-hour (GWh) plant in Sagunto near Valencia, which will require a 3 billion euro investment, in the first quarter of 2023, with mass production to begin by 2026.

Envision's partnership agreement also includes a renewable hydrogen plant worth up to 900 million euros, which will power a zero-emission project, as well as a wind energy park with a turbine assembly plant.

These will be built in the small towns of Alcazar de San Juan and Navas del Marques in central Spain.

There are also plans to build a 300 million euro digital product development center.

Spain will help finance these investments from European Union pandemic funds, the government said, noting that this will not only facilitate the energy transition but also support small municipalities suffering from depopulation.