EIB Group, ICO and Banco Sabadell sign agreements to channel €936 million in new financing to SMEs and green projects in Spain

31 octubre 2023

  • The EIB Group has participated in the first origination of asset-backed securities by Sabadell Consumer Finance for a total amount of €380 million
  • Instituto de Crédito Oficial (ICO) is investing €95 million to facilitate access to finance for small and medium-sized enterprises and the self-employed in Spain
  • The transaction supports green projects while also promoting less developed regions in Spain

The EIB Group — made up of the European Investment Bank (EIB) and the European Investment Fund (EIF) — and Instituto de Crédito Oficial (ICO) have invested in senior and mezzanine tranches of new asset-backed securities (ABS) originated by Sabadell Consumer Finance to support working capital and liquidity needs and address the investment constraints of Spanish small and medium-sized enterprises (SMEs) and mid-caps. Part of the financing generated will be channelled into green projects.

A large proportion of the final beneficiaries of this agreement for SMEs will be based in less developed regions — where per capita GDP (gross domestic product) is less than 75% of the EU average and where it is particularly difficult to access financing.

As part of the transaction, the EIB is purchasing different securitisation tranches amounting to €350 million while €30 million is invested by the EIF. ICO’s participation in this ABS transaction translates into a total investment of €95 million. This deal will enable the Banco Sabadell Group to channel €936 million into the real economy.

The EIB Group’s total investment (€380 million) takes place via a single securitisation, with a structure designed to achieve optimal efficiency.

Overall, the transaction aims to facilitate access to financing for SMEs and mid-caps while also promoting and accelerating private sector investments. The transaction will address working capital and liquidity needs and will tackle investment constraints faced by these enterprises in the aftermath of the coronavirus pandemic, the war in Ukraine, persistent inflationary pressures and increases in interest rates, among other issues.

This ABS securitisation transaction has a green component stemming from the EIF’s €30 million investment. Banco Sabadell will originate a new portfolio of SME loans totalling €60 million, of which about one-third will be financing granted for green projects.

“The EIB Group regularly joins forces with ICO and Banco Sabadell to give SMEs and mid-caps easier access to finance, thereby increasing their competitiveness and resilience. Together we are taking a new step to develop attractive credit solutions that help sustain business operations and support investment,” said EIB Vice-President Ricardo Mourinho Félix. “The transaction brings significant added value as it will promote equitable growth and convergence between EU regions, which is one of the key aims of the EIB’s lending activities.”

“We are pleased to collaborate with the EIB Group and Banco Sabadell to develop public-private partnership schemes aimed at channelling financing to Spanish companies. This operation is in line with the 2022-2027 strategy of the ICO Group, whose action plans support the growth of Spanish SMEs and social and territorial cohesion,” said ICO Director for Finance and Strategy Antonio Cordero.

“SMEs and small mid-caps are a key driver for economic development and employment. At the EIF, we are proud to be doing our part in unlocking new financing solutions and boosting economic, socially inclusive and green growth in Spain. The EIF’s investment reflects our commitment to supporting a green and sustainable transformation of the Spanish economy,” said EIF Chief Executive Marjut Falkstedt.

Deputy General Manager and Head of Corporate Banking Banco Sabadell Eduardo Currás De Don Pablos added: “The EIB Group (EIB and EIF) and the Instituto del Crédito Oficial (ICO) have historically been key partners in supporting business development in Spain. For Banco Sabadell it has always been very important to be able to collaborate with these organisations, with the aim of offering the best financing conditions for our customers' business projects. This credit line is particularly important and timely, given the magnitude of the business and the moment of recovery and future investments that our clients are managing.”

Background information

About the EIB Group 
The EIB Group — formed by the EIB and the EIF — signed €9.9 billion in new financing for projects in Spain last year, with record support for climate action and environmental sustainability projects.

The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It finances sound investments that contribute towards EU policy goals.

The European Investment Fund (EIF)’s central mission is to support Europe's SMEs by helping them to access finance. The EIF designs and develops venture and growth capital, guarantees and microfinance instruments that specifically target this market segment. In this role, it helps achieve key EU policy goals such as competitiveness and growth, innovation and digitalisation, social impact, skills and human capital, climate action and environmental sustainability.

About ICO
Instituto de Crédito Oficial (ICO) is Spain’s national promotional bank, attached to the Spanish Ministry of Economic Affairs and Digital Transformation. It supports innovative and sustainable business projects in Spain and other markets by granting loans and other forms of financing, contributing to sustainable growth. As a national promotional bank, it offers financing to companies, particularly SMEs and the self-employed.

About Banco Sabadell
With a history spanning 140 years, Banco Sabadell heads the fourth largest private Spanish banking group. Its total assets currently exceed €251 billion and it is trusted by around 12 million customers, with whom it builds long-lasting relationships. The Group has a solid franchise in Spain and occupies a clear leadership position in the business banking segment. It continues to progress with the transformation of its retail business towards a digital banking model.
Since its inception, Banco Sabadell has tried to help people and companies make their projects become a reality, anticipating their needs and taking care to ensure they make the best economic decisions. We do this through responsible management and a steadfast commitment to the environment and to society. www.grupbancsabadell.com