ICO is launching a new financial instrument to invest more than EUR 260 million in social and affordable rental housing projects
14 noviembre 2024
- Call for proposals "ICO Invest EU Social Funds" initiative: This initiative will be supported by a 50% guarantee from the European Commission under the Invest EU Programme
- ICO will select private fund managers and specialised investment vehicles mobilising private funds of at least a similar volume of funds.
- This partnership model will allow EUR 550 million of capital to be channelled for investment in social or affordable rental housing projects, thereby multiplying the impact of the initiative.
- The qualitative objective is to foster the creation or growth of regulated vehicles specialised in the promotion and management of social and affordable housing projects, drawing private capital and investment.
- Through this initiative, an estimated 10,000 new social and affordable rental housing units could be built
Instituto de Crédito Oficial has launched the "ICO Invest EU Social Fund" initiative, a new financial instrument through which it will invest EUR 268 million in equity funds specialised in promoting social and affordable rental housing projects. This initiative will be backed by a 50% guarantee (EUR 134 million) from the InvestEU Programme to ICO, in its capacity as European Commission Implementing Partner.
In order to manage and invest the EUR 268 million, ICO has today published an open, competitive and public call to select the regulated investment vehicles and the private asset managers that will manage them.
With ICO funds and the support of InvestEU, together with resources raised from private investors, the selected management companies and specialised vehicles will be able to invest 550 million euros in projects for the responsible development and management of social and affordable rental housing in Spain.
With this initiative, it is estimated that some 10,000 new social and affordable rental housing units could be built.
This initiative will have a dual impact: social, as it is aimed at vulnerable groups with difficulties in accessing housing, and environmental, through the expansion of the stock of affordable rental housing under the energy efficiency criteria defined by the InvestEU Programme.
Under this "ICO InvestEU Social Fund initiative, ICO will invest a maximum of EUR 100 million and a minimum of EUR 10 million in each fund. In addition, ICO's share will not exceed 49% of the target size, and must be complemented by private investors on the same terms, thus helping to multiply the impact of this initiative.
The projects financed by the management companies and specialised vehicles may be developed on publicly owned land, with a protection regime of at least 50 years, or on privately owned land, with a protection regime of at least 20 years. In both cases, the use of the dwelling may not be used for anything other than affordable rental housing within the prescribed period.
The management companies and vehicles selected by ICO will have experience in the development and management of rental housing and will be committed to the long-term responsible management of the projects financed (social and affordable rental housing) and their protection regime.
These management companies and specialised vehicles may promote from the outset the development of social housing projects for affordable renting, or acquire housing already built for this purpose and/or change its use for social renting, taking responsibility in all cases for the rental management.
ICO, through its participation in the supervisory committees of these vehicles, will ensure compliance with the responsible management of the rental of the dwellings and their protected status during the stipulated period.
ICO and the financing of social/affordable rented housing
Affordable housing financing is a priority in ICO's strategy. The Institute has extensive experience in financing the development of public or subsidised rental housing under different housing plans.
The new initiative launched today joins the roll-out of the ICO Housing Facility with European Next Generation EU funds through the Government's Recovery, Transformation and Resilience Plan. This facility is endowed with EUR 4,000 million to increase the stock of social rentals or affordable housing, as well as to improve the existing stock of social housing.
ICO as Implementing Partner
ICO has been an Implementing Partner of the European Commission since 2020, enabling it to manage products and instruments from the European budget. The InvestEU guarantee programme is part of the current 2021-2027 budget and the Next Generation EU Funds, with a budget of EUR 26.2 billion.
In this framework, ICO has already managed a EUR 100 million guarantee package under this programme in 2023, which has facilitated an ICO investment of EUR 200 million in sustainable infrastructure funds or green funds. This commitment is mobilising EUR 1.254 billion of private capital for innovative projects in agriculture, the circular economy and green energy.