Valencia Institute of Finance IVF will provide financing for financial instruments offered to companies and self-employed individuals affected by rising energy costs and the impact of the Russian invasion of Ukraine, with zero interest. Through the Reactive Plan, which totals 944 million euros, IVF has outlined two financing lines within the overall package, including a 150 million euro allocation. The goal is to inject liquidity where it is most needed and to help curb inflation pressures on the regional economy.
As the central instrument of Consell’s financial policy, IVF is once again playing a pivotal role in implementing and administering this strategy. The organization emphasizes direct and ongoing engagement with Valencia’s productive sector, enabling it to identify the most urgent needs facing self-employed workers and Valencian businesses.
IVF’s managing director, Manuel Illueca, highlighted the agency’s daily contribution to this effort. He noted that IVF serves as a straightforward and reliable intermediary with the Government, providing quick and effective responses to macroeconomic or exceptional situations. The designed line demonstrates a rapid, record-time response to needs as they arise.
150 million in two financial instruments
The two action lines within the Reactive Plan aim to address energy emergencies and inflation control. They total 150 million euros and are dedicated to meeting working capital requirements, addressing the most urgent needs identified among Valencia’s companies affected by the current economic climate, according to Illueca, IVF’s managing director.
One component will mobilize up to 100 million euros with no interest or financial charges to support the working capital of industries and enterprises whose sales are affected by the war and the surge in energy prices. This line recognizes that rising energy input costs and the broader economic downturn have increased production expenses and weighed on demand in many sectors.
Sectors experiencing higher production costs due to energy resource prices, along with reduced demand from customers or weaker export markets, will benefit from this support. The directive stands apart from other IVF financing lines because the public enterprise and the Economy Model under the Ministry of Finance will fully subsidize the financing costs of loans obtained from private banks with the AFIN-SGR guarantee.
To execute this initiative, IVF will maintain a budget line of 20 million euros, complemented by the Valencia Community SGR increasing its equity and lowering the cost of financing provided by private banks to 0 percent, up to a maximum of 100 million euros.
Additionally, IVF will dedicate another 50 million euros to a subsidized line named IVF-Affine Circulating Gas Stations, created specifically for this sector to compensate citizens for the rise in fuel prices. The objective remains to provide short-term liquidity to cover working capital needs while complementing the financing already provided by the Ministry of Finance.
The line will receive support from Afín-SGR, which will guarantee operations, thereby removing the requirement for service stations to furnish other types of guarantees. As with the preceding line, IVF will cover financing costs through the Promotion Fund generated from profits of the 2021 fiscal year, ensuring the client financing rate remains 0 percent.
The overarching aim of the Valencia Institute of Finance is to ensure quick, short-term liquidity to stabilize working capital requirements and to supplement official financing from the Ministry of Finance. In this framework, the Afín-SGR guarantees help streamline access and minimize procedural burdens for companies and self-employed individuals seeking relief from elevated energy costs and inflationary pressures. This coordinated approach seeks to maintain continuity for Valencia’s productive fabric and protect economic viability across sectors most exposed to energy price volatility.