The Official Credit Institute (ICO) has informed the banking sector that it intends to channel funds through the financial system. Roughly 18,700 to 20,000 million euros of a total loan envelope near 40,000 million euros will be directed to European funds, with the government appointing an administrator to oversee the process. Financial sources noted this was a key message shared at a December 13 meeting, as reported by Prensa Ibérica through El Periódico. The public bank will route an additional 9,300 to 10,000 million through fund managers and venture capital funds, while the remaining approximately 10,000 million will be allocated to various investment activities. Direct ICO funding (often the largest portion) and bond purchases issued by firms on regulated markets such as MARF or AIAF will be used as long as those issues support eligible projects. The figures remain flexible and can be adjusted based on demand.
With the ICO launch, a first tangible step is taken to make the program accessible to economic actors. A fund of 84,000 million euros has been made available to Spain under New Generation EU funds, marking a pivotal influx for the market.
At the December 13 meeting, leaders of the ICO, an entity linked to the Ministry of Economy, briefed the country’s major banks and employers associations (AEB and CECA) to start outlining how these European loans will operate and how organizations will conduct their activities. They discussed preparations to upgrade computer systems so they can channel the funds effectively. The Government aimed to reach agreements before year end on implementation agreements that the public bank would need to sign with the various competent ministries and Secretaries of State.
Early 2024 developments followed a clear path: the Council of Ministers would approve the financial terms and rules, organizations would receive drafts for each lending line, and contracts would be signed with the ICO to market the financing lines. These contracts will specify the terms and features of each line, but sources indicate the ICO is already fielding frequent questions from organizations and aiming to activate programs as quickly as possible.
five funds
The public bank will launch the ICO Green Line, offering 22 billion euros in loans to households and both private and public entities for green investments. The ICO Line for Companies and Entrepreneurs will allocate 8,000 million with favorable conditions, including 1,000 million earmarked for the tourism sector. The Next Technology ICO Fund will provide 4,000 million to accelerate the growth of technology startups. A plan known as the Spanish AVS Center will commit 1.5 billion to the audiovisual and video game sector, and a separate fund of 4.0 billion will expand the stock of social and affordable rental housing.
Resources routed through the banking channel will be accessed via ICO brokerage lines and used for four of these funds, excluding Fond-ICO Next Tech, which acts as a capital vehicle that invests alongside managers and venture capital partners. The public institution will supply funds to European credit institutions, allowing banks to conduct transactions with their clients to finance up to 100% of a project. The cost of credit for organizations will depend on the interest rate on EU debt financing, with an indicative rate roughly 0.3 percentage points lower than that of Spanish Treasury issues.
Financial institutions may request ICO funds every two weeks, following the standard mediation line cadence. Credits may stack with other subsidies, as long as the same project does not double count financing in relation to the same concept. In line with community regulation and ICO practice, sampling audits will be performed and on-site visits may be conducted at customers who have previously consented to receipt of these inspections.
Housing warranty
During the meeting banks pressed ICO and the Ministry of Economy through the Treasury to back housing developers. The Housing Ministry guarantees 50 percent of loans to real estate promoters, releasing funds downstream to support social and affordable rental housing. Industry demand stems from the significant capital needs needed to meet financial regulation requirements. Banking sources indicate that the Government has pledged to study the issue further.
ICO representatives clarified that projects seeking to benefit from the ICO Green Line must include activities listed in the Recovery and Resilience Regulation and meet a climate coefficient of 40% or 100%. For projects receiving less than 10 million euros in financing (which currently accounts for 99% of loans arranged by banks via ICO), a list of positive activities is being finalized with the European Commission. A client self‑assessment will suffice in those cases. For larger loan amounts, an external verifier will confirm involvement in the listed activities.