BBVA and EIB Group provide €185 million for sustainable housing projects promoted by Spanish small businesses and mid-caps
The EIB Group – made up of the European Investment Bank (EIB) and the European Investment Fund (EIF) – has signed a new €93 million synthetic securitisation operation with BBVA for 100% green projects. This investment will allow BBVA to mobilise around €185 million to finance the construction of residential buildings with near-zero emissions by small and medium firms (SMEs) and mid-caps in Spain’s real estate sector.
The operation is guaranteed by InvestEU, the EU programme to mobilise public and private investment. It will give SMEs and mid-caps that promote sustainable housing easier access to financing on favourable terms that would not otherwise be available for such projects.
The projects financed by this operation will improve energy efficiency, reduce CO2 emissions and help mitigate climate change. A significant number of these projects are expected to be implemented in cohesion regions where the income per capita is below the EU average.
This operation is one more demonstration of the EIB Group’s role of promoting new financial instruments like securitisation that help unlock capital for green projects, reduce the risk borne by sponsoring financial institutions and strengthen the EU capital markets union.
The agreement with BBVA supports the strategic priorities of the EIB Group, which include climate action, access to affordable and sustainable housing, cohesion and the capital markets union.
The securitisation is on a portfolio of over €1.4 billion in loans to SMEs in which BBVA will retain the senior and junior tranches, and the EIB Group will guarantee the mezzanine tranche of €93 million. It has been structured to meet the STS criteria (simple, transparent and standardised), and includes a synthetic excess spread mechanism and uses pro rata amortisation (which may be changed to sequential).