Economy, Trade and Enterprise Minister Carlos Cuerpo and the president of the Official Credit Institute (ICO), Jose Carlos Garcia de Quevedo, sealed this Monday a pact setting the terms for distributing 30.150 billion euros in loans drawn from European Next Generation funds. The package includes the ICO-Green Line (22.000 billion euros), aimed at households and businesses for green investments, and the ICO for Companies and Entrepreneurs Line (8.150 billion euros), designed to finance business growth. The arrangement promises a minimum saving of 8 percent on interest payments compared with the sector’s average finance rates.
For the ICO-Green line, eligible actions include purchasing electric delivery vehicles and upgrading refrigeration units in hospitality venues to more energy-efficient models. It also covers digital water management to reduce leaks in agriculture, and, for private individuals, European credits can support electric vehicles or the energy efficiency improvements of buildings. In the ICO for Companies and Entrepreneurs line, the focus is growth with a specific allocation of 1.000 billion for the tourism sector and 150 million for the strategic Perte project on the new linguistic economy.
Estimates place more than 17.150 billion euros flowing through partner institutions in the coming weeks as they join the lines to offer loans to their clients.
Four instruments
Loans are structured through four financial instruments, with banking channeling the largest share up to 60 percent of resources. This includes 12.000 billion for the ICO-Green line and 5.150 billion for the ICO for Companies and Entrepreneurs line, with banks expected to join the program in the coming weeks. Availability is anticipated to unfold through the summer, according to public bank sources.
The ICO will supply funds to banks, which will then operate with their clients, bearing the sole risk if borrowers fail to meet payments. Banks may finance up to 100 percent of the investment, with terms ranging from 1 to 20 years and potential grace periods of up to three years. There is no explicit maximum or minimum loan amount.
The interest rate will reflect the European Commission’s financing cost, roughly 0.2 to 0.3 percentage points below the Treasury rate. The ICO will set a maximum annual percentage rate that remains flexible enough for firms with varied credit quality to access financing. In the worst case, the public bank estimates an 8 percent minimum saving on the total repayment compared with the sector’s average financing costs.
Simplified administration
All investments are final, meant to advance climate goals or support business growth. In the ICO for Companies and Entrepreneurs line, up to 50 percent of the working capital required for the investment may be financed. As agreed between the ICO and the Ministry of Economy, viable projects must avoid double funding from European funds. Expanding a project that has previously received European investments is allowed, but debt restructuring or cancellation is not permitted.
Projects receiving less than 10 million euros, which covers most small and medium enterprises and self-employed borrowers with bank intermediation, may use an expedited pathway. They can submit a responsible statement to demonstrate alignment with the line’s conditions. The ICO will automatically verify these documents in under three days to keep costs low for firms. The risk evaluation and admission rest with the lending bank.
Other instruments
The remaining 40 percent of the funds, totaling 13.000 billion, will flow through other channels including direct ICO financing, bonds, or equity investments. Direct financing aims to allocate 5.000 billion to projects within the ICO-Green line and 1.000 billion for ICO for Companies and Entrepreneurs aimed at funding projects that drive large-scale impact. In these cases, only 70 percent of project cost will be financed, while the remaining 30 percent must come from other financial entities or private sector sources. Board approval rests with the ICO’s governing Council, which assumes the risk.
Another 2.500 billion, comprising 2.000 for ICO-Green and 500 for ICO for Companies and Entrepreneurs, targets Spanish companies issuing debt in organized markets to fund up to 70 percent of the issue. An additional 4.500 billion, including 3.000 for ICO-Green and 1.500 for ICO for Companies and Entrepreneurs, is allocated to equity investments via Axis, ICO’s venture capital arm, up to 49 percent of the fund size, ensuring at least 51 percent remains private.
Toward three more lines
Beyond the two lines totaling 30.150 billion, three more lines are expected to be signed soon to reach nearly 40.000 billion in European loans managed by the public bank under the second phase of a major Recovery, Transformation and Resilience plan. One line is a 4.000 billion fund to expand social housing and affordable rental housing in about 40.000 homes through public or private promoters. The other two lines are the ICO Next-Tech fund with 4.000 billion to expedite growth for technology startups, and the Spain Audiovisual Hub with 1.712 billion for the film, television, and video game sectors.