Valencia’s IVF unveils a four year working capital loan to shield exports to Algeria
Valencia’s regional president Ximo Puig announced a financing line from the Institut Valencià de Finances to cushion Valencian firms amid the Algeria crisis. The measure aims to ease the pressure on local companies and keep the regional economy moving during a period of uncertainty. The announcement followed a discussion with the IVF director and comes as a broader strategy to support export activity in North Africa.
Industry data from the Council of Chambers indicate roughly 1,400 Valencian businesses operate in Algeria, with exports near 450 million euros at stake. A commercial link by sea between Alicante and Oran remains active, reinforcing the importance of the market for regional producers and logistics providers alike. The government in Valencia plans to convene with the Valencian Business Confederation and the Chambers Council next week to review the crisis impact and identify practical steps for sustaining economic activity in the region.
Puig emphasized that immediate disruptions were unlikely in the gas sector. Still, authorities will proceed with caution and strive to offer broad coverage for Valencian exports to Algeria to preserve the standing of regional companies in the North African market. The IVF loan program is designed to help firms preserve working capital during the crisis, with a four year horizon and a repayment at maturity commonly referred to as a bullet loan. This structure is described as particularly attractive for the affected firms and aligns with the typical financing needs seen during extended sector slowdowns.
In practical terms, participating companies would not repay principal for four years, instead paying quarterly interest at a rate matching Euribor plus 1.5 percent. The exact rate may vary depending on whether the operation carries a guarantee from AFIN-SGR or other credit arrangements. The plan is intended to relieve short term liquidity pressures while preserving the ability of Valencian exporters to fulfill orders and maintain supply chains throughout the crisis period.
Officials from the Generalitat reported ongoing dialogue with national authorities about the Algeria crisis. The diplomatic tension has raised concerns for the Valencian economy, particularly given the market’s significance to regional exports. The situation has, according to these sources, placed Valencia-based companies at less favorable conditions relative to other international competitors in this unexpected environment. The strategy to mitigate risk and sustain market presence reflects a broad effort to shield regional businesses from abrupt shifts in trade conditions while exploring complementary markets and routes for ongoing revenue streams.
As the situation evolves, the administration will continue monitoring the trade flows and the performance of the financing line. The ultimate goal remains clear: safeguard Valencia’s export momentum and provide a cushion that helps local firms weather the crisis without losing competitive standing in Algeria and beyond. The forthcoming talks with business groups are expected to refine the approach and ensure a coordinated response that supports employment and regional growth in the face of instability.
Market observers note that a stable financing framework can act as a signal to lenders and investors, reinforcing confidence among Valencian exporters and their partners. By maintaining liquidity and offering predictable terms, the IVF strategy aims to stabilize the operating environment for a critical sector that contributes significantly to the regional economy and jobs. The emphasis on careful risk management and proactive public-private collaboration signals a pragmatic path forward in challenging times.
Overall, the initiative illustrates how regional authorities can align fiscal tools with strategic export objectives. The next steps will focus on targeted support where it is most needed, continuous assessment of exposure levels, and timely adjustments to terms if market conditions shift. The crisis in Algeria has prompted a measured response that balances safeguarding economic activity with fiscal responsibility, aiming to preserve the competitive edge of Valencia’s manufacturing and service sectors in the broader Mediterranean economy.