Spanish Government approved the extension of the Recovery Plan this week. The European Next Generation programme will support 84,000 loans included in this addendum, as well as 7.7 billion in transfers and 2.2 billion from the REPowerEU mechanism. Among the programmes to which these resources will be allocated is the Official Credit Institute (ICO), which will mobilise 4 billion in relation to the promotion of social rental housing and whose loans will be subject to an interest rate of 4%.
Vice-president Nadia Calviño announced that the ICO and other banking institutions will have 22.5 billion to deploy lines of financing to entrepreneurs, companies, green projects and especially in the tourism sector. The loans will create funds to finance technology start-ups and the Spanish audiovisual sector. These loans will also reinforce the structural funds, creating a security cushion of 3 billion “to give credibility to entrepreneurs and employees in the event of an economic setback” according to the Ministry of Economy.
In addition, the regional governments will receive funds for sustainable investment from the European Investment Bank (EIB). The EIB will be responsible for distributing these funds according to the financial viability of the plans submitted by the regional governments to obtain financing.
The extension of the Recovery Plan will also mobilise 28.3 billion to reinforce 12 Perte projects, including the Chip and ERHA Perte – aimed at deploying renewable energy – and the Water Cycle Digitalisation Perte. It is expected to include 18 reforms that will complement the existing ones in terms of energy and correction of the distortion in the supply-demand ratio of the labour market.
Undoubtedly, good news for Spanish companies that have new financing instruments. At Altria Corpo we advise on these and other financial solutions, both banking and alternative.