What is the role of ICO in the Recovery Plan?

Information on Next Generation EU loans managed by ICO Group


The Instituto de Crédito Oficial (ICO) is playing a crucial role in the implementation of the second phase of the Recovery, Transformation and Resilience Plan by managing the deployment of Next Generation loans. These resources are distributed through various initiatives focused on promoting sustainable social and environmental projects, the digital transformation of the business fabric, and the construction of social or affordable rental housing.

The Addendum activating the second phase of the Recovery Plan assigns the ICO Group with the management of three initiatives: ICO Verde, ICO Empresas y Emprendedores, and ICO Vivienda.

In the second phase of the Recovery Plan, the management of the Next Tech Fund, endowed with 4 billion euros, ICO is collaborating, via AXIS, with SETT (Sociedad Española para la Transformación Tecnológica), the Spanish government agency driving technology transformation. This cooperation is currently framed within Spain's contribution to the European Tech Champions Initiative.

ICO Verde:

With a total of 22 billion euros, this “green” funding facility represents a significant boost for the ecological transition in Spain. It is designed to support companies large and small and households in developing sustainable projects. Key areas of investment include sustainable transport, energy efficiency, the deployment of renewable energy, industrial decarbonisation, efficient water management, promotion of the circular economy and adaptation to the challenges of climate change. 


ICO Empresas y Emprendedores:

With 8.15 billion euros, this facility seeks to strengthen the Spanish business fabric, with special attention to small and medium-sized enterprises, as its name indicates. This initiative includes a specific €1 billion segment aimed at revitalising the tourism sector, focusing on sustainability, technological modernisation and improved competitiveness. Another €150 million tranche is allocated for digitalisation and artificial intelligence projects in public and private universities, as part of the PERTE [Strategic Projects for Economic Recovery and Transformation] for the New Language Economy, underscoring the commitment to innovation and technological progress in the field of education. 


ICO-Vivienda:

Endowed with €4 billion earmarked for the financing projects aimed at increasing the stock of social rentals or affordable housing, as its name indicates, as well as to improve the existing stock of social housing. This loan facility will strengthen the stock of social or affordable housing, which will benefit the population as a whole and have a favourable impact on the rental housing market. The direct beneficiaries will be individuals and households with the greatest difficulties in accessing housing on the market, due to their income level or because they belong to groups subject to special vulnerability.

Funding will be provided to both public and private developers for the construction of energy efficient buildings (with a primary energy consumption at least 20% below the requirement for nearly zero energy buildings according to national guidelines), as well as for building retrofitting to improve energy efficiency (with a reduction of at least 30% of the building's non-renewable primary energy consumption). 


 

How are the loans channelled?
 

The ICO Verde and ICO Empresas y Emprendedores initiatives have the possibility of using four types of financial instruments to channel the loans:

  • Second-Floor Facilities of the Recovery, Transformation and Resilience Plan with Financial Institutions: these enable financing of up to 100% of the project with extended repayment and grace periods. Financial institutions are the one which study and analyse the operations.
  • Direct financing from ICO: up to 70% of the project can be financed. In co-financing with private financial institutions on equal terms (pari passu).
  • Acquisition of debt securities issued by companies to finance their projects: for Spanish companies with debt issuance programmes in organised markets.
  • Venture capital investments through AXIS, ICO's venture capital manager: these investments are made through venture capital managers/funds supervised by CNMV, ESMA or another EU supervisory body. They are aimed at direct co-investments in start-ups and scale-ups for digital and green projects. AXIS will have a maximum shareholding of 49%.

The ICO Vivienda initiative uses these two financial instruments to distribute financing to developers: 

  • Second-Floor Facilities of the Recovery, Transformation and Resilience Plan with Financial Institutions: these enable financing of up to 100% of the project with extended repayment and grace periods. Financial institutions are the one which study and analyse the operations.
  • Direct financing from ICO: up to 70% of the project can be financed. In co-financing with private financial institutions on equal terms (pari passu).