A €230m commitment financed by loans from NextGenerationEU, will be allocated to two financial intermediaries, A&G and Urbania Alpha.
The fund has committed €230m to finance agreements signed by the European Investment Bank with A&G and Urbania Alpha | Sam Williams on Unsplash
Spain’s Regional Resilience Fund has committed €230m to finance agreements signed by the European Investment Bank (EIB) with A&G and Urbania Alpha to fund new urban development projects, including affordable housing and sustainable tourism across Spain.
The fund, which is part of Spain’s Recovery, Transformation and Resilience Plan, is financed by loans from NextGenerationEU, the European Commission’s COVID-19 recovery package.
The agreements were facilitated by a new intermediated mechanism launched by the EIB earlier this year to channel financing via financial intermediaries specifically for this purpose and follows an earlier agreement, announced at the beginning of July, with Buenavista Infrastructure and Arcano Partners for €410m. This latest announcement brings total financing in support of urban development projects and sustainable tourism to €640m under the new instrument.
Investment opportunities
The EIB said that A&G and Urbania Alpha will assess investment opportunities across the country and support projects in areas such as affordable housing, education, healthcare, social and cultural infrastructure, sustainable mobility, waste and water management, energy efficiency and sustainable tourism.
A spokesperson for the EIB told Impact Investor that the financing will also contribute to the EIB Group’s strategic priorities of climate action and environmental sustainability and strengthen social infrastructure in the European Union, two of the Group’s eight strategic priorities set out in its Strategic Roadmap for the years 2024-2027.
“In the case of intermediated financing, the EIB monitors that the funds are being used in line with the objectives. The intermediaries commit to allocate funds according to certain previously defined criteria and they undertake part of the task of monitoring that the projects financed are in line with the defined criteria,” they said.
Investing in urban development and sustainable tourism
Against a backdrop of rising social tensions due to mass tourism, particularly in Spain, this mechanism may prove to help alleviate some of the impacts.
“Financing coming from the urban development and sustainable tourism intermediated instrument of the Regional Resilience Fund will promote investments in projects that contribute to developing our cities, fostering their green transition and adapting them to the evolving needs of citizens – this includes projects in areas such as affordable housing, waste and water management or sustainable mobility,” said the spokesperson.
“It also aims to foster an environmentally sustainable and responsible tourism model by financing sustainable tourism projects,” they added.
Both A&G and Urbania Alpha have created dedicated close-ended investment vehicles through which they will channel the funds into eligible projects. A&G, which has been allocated €130m by the EIB, will channel it through A&G Real Estate Sustainable, and Urbania Alpha, which includes the AEXX Capital brand and has been allocated €100m, will channel the financing through AEXX Impact Investments I.
A&G will invest in equity, while Urbania Alpha will finance projects through equity or loans, or a combination of both, with a maximum allocation per project of €22m and maximum recovery periods of 15 years for equity investments and 20 years for debt. The investment period runs until December 2030.
“The €230 million financing is not a grant. Financial intermediaries have until 31 December 2030 to invest the resources in economically and financially viable projects. Once invested, the financial intermediaries must manage and monitor the portfolio of investments until exit/repayment,” said the spokesperson, explaining that the final beneficiaries targeted would be private or public-private entities.
“Final beneficiaries must develop eligible projects in Spain. Start-ups may be eligible if they develop a project that fulfils the eligibility requirements but are not specifically targeted in this instrument,” they said, adding that among other criteria, all projects will have to comply with the Do No Significant Harm Principle and be economically and financially viable.
Latest articles
-
Posted in category:
-
Financial inclusion,
-
Pension funds,
-
Social impact
Posted in category:
-
Financial inclusion,
-
Pension funds,
-
Social impact
-
-
Posted in category:
-
Development finance,
-
EU funding,
-
Financial inclusion,
-
Gender equality
Posted in category:
-
Development finance,
-
EU funding,
-
Financial inclusion,
-
Gender equality
-
-
Posted in category:
-
Climate & environment,
-
Development finance,
-
Investment
Posted in category:
-
Climate & environment,
-
Development finance,
-
Investment
-