España Crece has a pipeline of 34 affordable rental housing projects that could mobilise around €700 million. The figure was announced by Carlos Cuerpo, First Vice-President and Minister for Economy, Trade and Business, at his appearance before the Spanish Parliament's Joint Committee for the European Union on 1 October, according to Europa Press.
The projects were identified while the Official Credit Institute (ICO) was finalising the fund's investment strategy. Carlos Cuerpo explained that the ICO has held talks with the sectors involved, particularly developers, to tailor its instruments to their needs and move forward with projects that could qualify for financing. The minister welcomed the sector's response and expressed confidence that the pipeline will help increase housing supply.
The announced amount is an estimate of the resources the projects would mobilise. Under the conditions published by the Government, financing depends on the review and approval of each deal and on the availability of funds.
The ICO's instrument for protected affordable rental housing has been accepting applications since 1 September and offers three options. The developer loan covers new construction or full refurbishment until the property reaches stabilised occupancy. The investor loan targets the long-term holding of completed, operating assets, with financing on market terms.
A third option, for operators that build and keep the homes in their portfolio, combines both stages in a single financing package approved from the outset. Both this mixed option and the developer loan may include a non-repayable tranche to cover a proven economic viability gap, provided the established requirements are met.
España Crece's residential strategy aims to mobilise up to €23 billion in public and private investment and help build around 15,000 homes a year, according to forecasts the Government presented in February. These figures cover all of its planned affordable rental activity, beyond the 34 projects announced now.
Managed by the ICO, the fund seeks to continue the investment of the Recovery Plan and combines different instruments to attract private capital. In housing, it provides long-term financing and equity investment in development and management vehicles, to support deals whose viability depends on both affordable rents and investment timeframes.
