SABADELL SMES MIDCAPS & OTHER PRIORITIES II

Promoter – Financial Intermediary

BANCO DE SABADELL SA

Location

• Spain

Description

The operation will provide Sabadell with a loan to finance projects carried out by small and medium-sized enterprises (SMEs) and mi-caps in Spain.

Additionality and Impact

The project aims to promote and accelerate private sector investments as well as facilitating access to finance for SMEs and Midcaps, a backbone in terms of growth and employment for the Spanish economy. In particular, it will help addressing the working capital, liquidity needs and investment constraints of SMEs and Midcaps located in Spain, who are currently facing an unprecedented energy crisis as a result of the war in Ukraine. The soaring inflation and rise in interest rates pose a risk to the emerging post-pandemic economic recovery in Spain. SMEs and Midcaps which have already been in a fragile position following the pandemic, are poorly positioned to withstand a second major shock. Due to the reliance on the tourism and service sector, Spain was already one of the countries more affected by the C19 outbreak, and unemployment rates are also significantly above the European Union average (Spain's unemployment rate stood at 12.8% at the end of March-2023 versus an EU rate of 6.0% (Source: Eurostat)).

The operation will also have a high contribution to Cohesion (60%), given that a substantial part of the GDP in Spain is generated in cohesion regions. While less developed regions have caught up in terms of GDP per capita over the last two decades narrowing the gap with wealthier regions, divergences in terms of income and living conditions still persist across the European Union. In addition, the current energy crisis is expected to have a very asymmetrical impact aggravating regional disparities, as it has been the case during previous crisis including the C19 outbreak. SMEs and Midcaps in these regions are more vulnerable to financial distress and without continuing to address their short-term liquidity and investment needs, the adverse economic effect of the pandemic could be long-lasting.

Objectives

The aim is to enhance access to finance for the target beneficiaries, a well-known and financially solid promoter with a proven track-record in allocating EIB funds. The operation will have a special focus on Cohesion regions, which represent about 60% of Spanish GDP.

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 - 26/09/2023