The EIB Group, comprising the European Investment Bank (EIB) and the European Investment Fund (EIF), has signed a new asset-backed securities (ABS) purchase agreement with BBVA.
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The deal encompasses several transactions through a single securitization, with a structure designed to achieve optimal efficiency.
In addition, the EIB Group signed an agreement with BBVA for a €54 million synthetic securitization under the European Guarantee Fund (EGF) programme.
Of the total amount of €1,194 million across the several transactions, €512 million will fund green projects related to the environment and climate action in Spain.
Up to €682 million will be allocated to loans to Spanish SMEs and mid-caps, which were severely hit by the fallout of the pandemic and the disruption and high inflation triggered by the invasion of Ukraine.
The first two transactions are the most heavily financed: €500 million divided into two equal funds. One fund is intended to provide financial resources to a range of specific climate action initiatives in areas that support energy efficiency and renewable energy objectives at national and European level, thus helping to reduce carbon emissions.
One of the specific actions to be driven forward by this €250 million fund is energy refurbishment by homeowners' associations of residential buildings in Spain.
BBVA will also be able to finance purchases of residential properties that achieve the highest energy performance standards (EPC Class A) and meet the requirements set by the EIB and the EU taxonomy. In addition, the bank can now fund private sector investments by SMEs and mid-caps in selected initiatives with a strong climate action angle.
The other €250 million fund will enable BBVA to boost its additional lending capacity and offer access to financing for Spanish SMEs and mid-caps on preferential terms.
The third transaction within the scope of the deal, for a value of €90 million euros, will fund the construction and operation of a portfolio of 13 photovoltaic plants throughout Spain. The project will have a combined capacity of 605 MW and will produce close to 1,310 GWh per year.
This transaction is 100% eligible under the EIB's Climate Awareness Bonds (CAB) program. The world's first green bond, launched by the lending arm of the EU in 2007, introduced the concept of reporting on real investments on the basis of sustainability objectives.
The fourth transaction between the Basque bank and the EIB Group will provide €100 million to finance purchases of buildings in Spain with near-zero energy consumption. The fifth transaction, signed with the EIF, will enable BBVA to invest €72 million in sustainable operations.
The proceeds of the sixth and last transaction, €432 million, will be made available for SME financing, as an allocation under the European Guarantee Fund (EGF). This initiative managed by the EIB Group is part of the EU's global response package to COVID-19, which has an allocation of EUR 540 billion to support the European economy and, in particular, SMEs and mid-caps affected by the pandemic. ■
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