The Government launches the 'Spain Grows' fund to mobilise €120 billion in productive investment

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)

The Government is launching the 'Spain Grows' fund, a strategic public-private partnership initiative that will mobilise around €120 billion in investments to consolidate the current phase of economic growth and modernise Spain's productive sector.

The fund, which will be launched in the second quarter of this year, extends the transformative boost of the Next Generation EU funds beyond 2026, the year the Recovery Plan ends.

The 'Spain Grows' fund will be managed by the Official Credit Institute (ICO), which will receive a capital injection of €13.3 billion, structurally strengthening its capacity as the national development bank. Of this amount, €10.5 billion are loans from the Recovery Plan and €2.8 billion come from non-repayable transfers, which will allow, in certain cases, more advantageous terms and costs.

With these resources, the ICO will have the capacity to invest up to €60 billion, while also promoting co-investment with the private sector, so that the total financing mobilised will reach around €120 billion.

Instruments for business growth and investment priorities in strategic and future-oriented sectors

'Spain Grows' will offer a wide range of financial instruments (loans, project finance, capital injections, guarantees) and will facilitate continuous financing support throughout the different stages of the business life cycle, from startup to expansion.

The fund will prioritise areas of particular relevance to the Spanish economy, such as the construction of affordable rental housing and the green transition, as well as innovative projects in cutting-edge fields (biotech, foodtech, care economy), ensuring balanced development throughout the country.

The 'Spain Grows' funding will be directed towards sectors with high transformative potential, where public contribution is crucial for achieving a competitive and innovative productive fabric.

Boosting the construction of affordable rental housing

'Spain Grows' will prioritise boosting the construction of affordable and social rental housing as a key driver for strengthening social cohesion and the competitiveness of the Spanish economy, which faces significant economic challenges in accessing housing.

The objective is to contribute to increasing the supply of available housing and facilitate the development of these projects, which, due to their income profile and investment horizons, require adapted financing instruments and a risk-sharing approach that allows for the mobilisation of additional investment.

To achieve this, 'Spain Grows' will combine long-term financing-including, where necessary, non-repayable tranches to ensure the economic viability and repayment capacity of certain projects-with equity investment solutions aimed at strengthening the capital of the development and management vehicles.

As a guideline, the planned structure would allow for the mobilisation of up to €23 billion in investment in the affordable rental housing construction segment and contribute to the construction of approximately 15,000 homes per year.

In this sector, the ICO will act as a catalyst, promoting co-investment and attracting private capital to scale the impact. In this regard, public participation contributes to improving the viability of the projects, accelerating their implementation, and mobilising additional resources while maintaining operating principles consistent with a public dimension.

Non official translation