The government has decided to allocate 20,000 euros in new European loans to create funding streams for autonomous communities, enabling financing under preferential conditions. These loans can be extended to the private sector to spur investments in key areas such as social housing, sustainable transportation, tourism competitiveness, the care economy, trade, and small and medium-sized enterprises. The fund is expected to be a major contributor, backed by a loan of 84,000 million from the Spanish Recovery and Resilience Mechanism.
The Inter-Ministerial Commission for Improvement, Transformation and Resilience approved an annex to the Spanish Recovery Plan, which Brussels endorsed on Tuesday, July 2021. This update clarifies how the country intends to allocate an additional subsidy of 7,706 million euros, reflecting Spain’s lower economic growth in the previous two years. The package also includes 2,586 million under the REPowerEU Plan to save energy, boost green production, and diversify energy sources, along with 84,000 million in credits (with 4,789 million already in the 2023 budgets).
Among those funds, 26,300 million euros will come from a mix of subsidies and credits, a point highlighted by Nadia Calviño, the vice president of economics. She explained that PERTE initiatives will be reinforced and that the Council of Ministers will approve one of these strategic projects next week. The plan includes decarbonization efforts for the manufacturing sector, with a focus on electro and gas-intensive processes, supported by 3,100 million euros.
distribution of loans
The government also announced that the Official Credit Institute, ICO, will route 15,000 million European loans through a new conduit. A Green Line will fund sustainable investments, expanding the ICO SME line to support companies, small businesses, and the self-employed in areas such as renewables, energy efficiency, and the circular economy. The Ministry of Economy is coordinating with banking associations to channel these resources, a move reported by El Periódico of the Prensa Ibérica group.
ICO will channel up to 15,000 million European loans for sustainable projects
The rest of the European loans will be distributed through a range of new or expanded funds. These include support for social inclusion reform and the Minimum Vital Income, totaling 9,000 million; a RED mechanism for labor reform and worker requalification, totaling 5,000 million; innovative digital projects at 4,000 million; a fund to safeguard the solvency of strategic companies at 4,000 million; and the Sepides fund at 2,500 million, which backs industrial investment.
Other avenues include European loans channeled through the Fund for tax incentives that encourage business investment in research and development (2,000 million), a fund for the recapitalization of medium-sized companies affected by the pandemic (1,000 million), and the social and environmental impact projects fund (400 million). There is also a dedicated fund to stimulate audiovisual productions within Spain (425 million).