Pedro Sánchez announces that the 'Spain Grows' fund will mobilise €23 billion and finance the construction of 15,000 homes per year

The President of the Government of Spain stated that this is the largest volume of public-private financing on advantageous terms in Spanish history to combat the housing crisis, and that more public and affordable housing must be built "quickly".

Madrid

The President of the Government of Spain, Pedro Sánchez, during his speech at the presentation of the 'Spain Grows' fund (Pool Moncloa/Fernando Calvo)

The President of the Government of Spain, Pedro Sánchez, has announced that the new 'España Crece' (Spain Grows) fund will mobilise up to €23 billion in public and private funds to boost the housing supply and finance the construction of 15,000 homes per year in Spain, thus making "decisive" progress in closing the housing deficit.

He made this announcement during the closing ceremony of the presentation of the new 'Spain Grows' fund, held at the Madrid College of Architects, where the Minister for Economy, Trade and Business, Carlos Cuerpo, and the Minister for Housing and Urban Agenda, Isabel Rodríguez, also spoke.

Also in attendance were the First Vice-President of the Government of Spain and Minister for Finance, María Jesús Montero; the Third Vice-President of the Government of Spain and Minister for Ecological Transition and Demographic Challenge, Sara Aagesen; the Minister for the Presidency, Justice and Parliamentary Relations, Félix Bolaños; the Minister for Home Affairs, Fernando Grande-Marlaska; the Minister for Transport and Sustainable Mobility, Óscar Puente; the Minister for Education, Vocational Training and Sports, Milagros Tolón; and the Minister for Inclusion, Social Security and Migration and Government Spokesperson, Elma Saiz.

The new 'Spain Grows' fund is endowed with an injection of €10.5 billion from the Recovery Plan. The Government plans to mobilise €60 billion through the Official Credit Institute (ICO) via loans, guarantees, or equity instruments, and aims to reach a total investment of around €120 billion, combining public and private capital. Representing more than 7% of annual GDP, the fund will prioritise key sectors to improve the productivity of the Spanish economy: housing, energy, digitalisation, AI, quantum computing, reindustrialisation, the circular economy, infrastructure, water and sanitation, and security, Pedro Sánchez explained.

He also pointed out that "the true value of a country lies not beneath its soil, but in the capacity of its people to transform challenges into opportunities", and although "Spaniards don't have vast oil reserves under their feet, we have abundant will, creativity, and talent". In this regard, he recalled that six years ago, Spain joined with other countries "in an unprecedented exercise of continental patriotism" with the creation of the Next Generation EU funds, the precursor to the Recovery Plan, in which "Spain played a decisive and leading role".

With this "success" set to end on 31 August 2026, he explained that the Government wants to extend its legacy and that Spain will fight for common financing within the framework of the multiannual financial debate after 2027. "NextGen was just the beginning of an irreversible path, the starting point of a transformation that will not stop", he emphasised.

The President of the Government of Spain, Pedro Sánchez, along with the first and third Vice-Presidents, María Jesús Montero and Sara Aagesen, at the presentation of the 'Spain Grows' fund| Pool Moncloa/Fernando Calvo

The reform agenda and the structural change to the production model will continue

The head of the Executive explained that the phrase "Spain is growing" is "a confirmation of reality", since the country closed 2025 with a GDP increase of 2.8% and forecasts point to 2.3% in 2026, "almost double that of the Eurozone as a whole and more than any other major economy on our continent". It is also, he continued, the determination to continue growing, as in recent years, with solid and lasting foundations, leaving no one behind, not even the planet. "Spain must continue the structural change in its production model, the profound transformation of the last seven years with the Recovery Plan", he added.

In this regard, he asserted that the fund will allow for continued promotion of competitiveness in green, technological, and social areas. "Spain is a solvent country, as all the rating agencies attest: we have less debt than the United States, a smaller deficit than the Eurozone, and a lower risk premium than France. "We are a stable nation with legal certainty, full of opportunities", Sánchez emphasised, celebrating the "confidence" of investors in Spain, in a context of increasing stock of productive foreign direct investment over the past decade, now representing 41% of GDP, exceeding €650 billion.

Objectives: productivity, capital markets and social Europe

He explained that the new fund responds to three major economic policy objectives: strengthening productivity, contributing to the development of the capital markets, and preserving social Europe. Regarding productivity, he made it clear that "the future of the European economy depends on a dual transition, green and digital, and Spain will not forgo either".

To contribute to the development of the capital markets, as called for in the Letta report, he announced that the 'Spain Grows' fund will help develop the venture capital and private equity ecosystem in Spain, supporting its investments, providing security, and offering new guarantees so that SMEs can access financial markets, while also joining other initiatives to promote innovation that Spain is already promoting in Brussels, such as the European Competitiveness Lab; and also in Spain, such as the Startup Law and the green agenda. "We do not share the call for deregulation; we need to simplify, create regulations more in line with the interests of businesses, and harmonise and strengthen the single internal market on our continent", he added.

Finally, he emphasised that the fund will also contribute to a social Europe. In detail, 'Spain Grows' will co-invest in the private sector with minority stakes, through loans, guarantees, or equity instruments, in key sectors such as energy; in digitalisation, artificial intelligence, and quantum computing, so that "our companies are more competitive"; and in the circular economy. It will also invest in infrastructure, water and sanitation; in security; and in housing, a "priority" issue for the Government.

Unprecedented public and private resources for housing

Therefore, he emphasised the need to "build more homes, public and affordable housing, and ensure that the lack of financing is not the bottleneck that prevents us from achieving it. He announced that the Spain Grows fund will mobilise up to €23 billion in public and private funds to "boost the housing supply and make decisive progress in closing the housing deficit by financing the construction of 15,000 homes per year".

"The fund will roll out the red carpet for private investors, not to speculate with a constitutional right, but to build homes for the majority of citizens", he added, committing to "the largest volume of public and private financing on advantageous terms in our history to combat the housing crisis".

In this way, Pedro Sánchez specified that 'Spain Grows' will have "transparent and rigorous governance, based on international best practices, with the participation of the main state financial institutions, and will be accountable to citizens". Along with the public sector, the Government will invite investment funds, venture capital firms, sovereign wealth funds, and other private actors who wish to join.

The President of the Government of Spain stressed that "Europe is the winning bet for our country" and that "Spain has become, through its own merit, an economic engine and a global benchmark in transformations such as energy, digital, and social rights". "Today we are taking a very important step to convert our country's reputational capital into financial capital. "There is no better asset than being Spanish right now, and if we want to bequeath it to our children in the form of opportunities, we must think in the medium term, transcend deadlines, and continue along this path of investment, public-private partnership, and transformations that are yielding such positive results", such as the projected potential growth of over 2% in the 2025-2028 period, "a very good foundation for responding to social demands and continuing on the path of competitiveness initiated seven years ago", he concluded.

The Minister for Economy, Trade and Business, Carlos Cuerpo, together with the Minister for Housing and Urban Agenda, Isabel Rodríguez, during the colloquium with business leaders| Pool Moncloa/Fernando Calvo

Carlos Cuerpo: "It is a transformative project to further strengthen the path of modernisation"

The Minister for Economy, Trade and Business, Carlos Cuerpo, stressed that this is a "transformative project with a future-oriented vision to further strengthen the path of economic modernisation", which has resulted in economic leadership, improved productivity, a competitive foreign sector, and the attraction of foreign investment.

"We have squared the circle with a model based on digital transformation and green transition, supported by the Recovery Plan", and now companies will be supported in innovative projects, removing obstacles, guaranteeing business growth with long-term investment and a strong social impact. "We want to strengthen the virtuous cycle that creates conditions for companies to grow, innovate, and generate higher-quality jobs with better salaries", he added.

Isabel Rodríguez: "We will continue to increase the public housing stock"

For her part, the Minister for Housing and Urban Agenda, Isabel Rodríguez, emphasised the need to dedicate "all our capabilities and efforts" to improving access to housing, with greater wealth redistribution. With the new fund, the public housing stock will continue to grow, having already increased from 2.5% to 3.4%, following an eightfold increase in the housing budget since 2018, the injection of resources from the Recovery Plan, Casa 47, the new State Housing Plan, the modernisation of construction, and public-private partnerships.

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• Government of Spain
• Housing
• Economy
• Spain Recovery Plan