Release date: 20 June 2022
Promoter – Financial Intermediary
BANCO BILBAO VIZCAYA ARGENTARIA SALocation
Description
Loan for financing small and medium-sized enterprises (SMEs) or mid-caps, mainly located in Spain, and climate change initiatives.
Additionality and Impact
The operation targets on one hand SMEs & Midcaps affected by the economic impacts of the COVID 19 pandemic and on the other hand it supports the EU's and Bank's priority in the energy sector and the EIB's climate action objectives, through the implementation of energy efficiency projects in residential buildings and industry.
The operation targets to finance SMEs & Midcaps affected by the COVID19 and to deploy such resources via bank intermediation to palliate the adverse effects and limited access to finance of the Pandemic. This finance proves critical to provide financial support to SMEs & Midcaps whose own existence is at risk given the lockdown measures that have been implemented in Spain. Given the economic structure of the Spanish Economy (i.e. tourism, construction, service sector), and that SMEs represent the majority of companies, the adverse economic effects of the pandemic has been particularly acute in Spain and could severely affect employment. EIB participation is critical to unlock financing to SMEs given that the securitization market is completely stalled.
In addition, 50% of the operation (i.e. EUR250m) will target investments in Climate Action initiatives. More specifically EE efficiency investments in industry and buildings, including green mortgages and renovation of multi-apartments buildings.
The Spanish NECP sets out ambitious targets in building renovations and industry until 2030. Until now, building renovation activity in Spain has been very low, in comparison with other countries. In addition to the reduction of carbon and air pollution externalities - a social benefit which is not fully internalised by private investors -, EE projects in buildings and SMEs suffer from relatively high transaction costs due to their fragmentation and small size. The consequence is sub-optimal financing flows into EE investments. The EIB involvement in this project will help to correct this sub-optimal investment situation.
Objectives
The operation will allow BBVA to finance Climate Action projects as well as SMEs and mid-caps in Spain. On the one hand, approximately 60% of the funds (EUR 300 million) will promote and accelerate private sector investments, and enable improved access to finance to both SMEs and mid-caps. The remainder, (i.e. 40% of the funds or EUR 200 million) will support climate action projects namely in the area of energy efficiency.
Sector(s)
- Credit lines - Credit lines
Proposed EIB finance (Approximate amount)
EUR 500 million
Total cost (Approximate amount)
not applicable
Environmental aspects
Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.
Procurement
Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.
Status
Signed - 14/06/2022
Disclaimer
Before financing approval by the Board of Directors, and before loan signature, projects are under appraisal and negotiation. The information and data provided on this page are therefore indicative.
They are provided for transparency purposes only and cannot be considered to represent official EIB policy (see also the Explanatory notes).