The Minister of Economy, Carlos Body, announced this Friday that the new one – endowed with the 10,500 million euros that Spain has not spent on its part of the European recovery plan – will raise the cushion of the Official Credit Institute (ICO) to at least 60,000 million. So, that Public bank, which finances projects that the private market does not cover well, will be able to invest in innovative sectors and nascent industries, such as AI, or sectors of social interest, including housing.
“This fund will be nourished by between 10,000 and 10,500 million euros from the loans of the recovery plan, which will reinforce the capital cushion of the ICO. Thanks to this reinforcement, the ICO will be able to directly mobilize around 60,000 million euros and, indirectly, by adding the participation of the financial entities, an even greater figure,” said Corps, after attending the signing of the new Financial Education Plan, a campaign quadrennial awareness raising program in schools that Economía carries out with the Bank of Spain, the CNMV and the Ministry of Education. The fund is designed to sustain public investment from pandemic funds beyond August this year, when the original funding mechanism expires.
The new vehicle that the ICO will manage, called “Spain grows”, has become possible after the European Commission made the spending rules of the recovery funds for the pandemic more flexible last June, of which Spain was one of the most beneficiaries, with almost 80,000 million in non-refundable aid. Since then, the Twenty-seven can redirect amounts of European funds that were left unexecuted towards areas such as defense or the space sector. Some countries have already launched new mechanisms to reuse these resources. For example, Poland created an investment vehicle with 5 billion in defense.
The fund that the ICO will manage also aspires to have contributions from national and international investors of up to 120,000 million euros, as Sánchez announced yesterday, at the closing of the sixteenth edition of the Spain Investors Day. In this sense, Corpo has pointed out: “It is an ambitious fund with the capacity to transform and continue modernizing the Spanish economy in key sectors and in industries that we believe will also be key to increasing our long-term potential growth through greater innovation.”
Despite the participation of private partners, the vehicle will continue to be managed exclusively by the ICO, with a focus on nine sectors: in addition to AI and housing, there are energy, digitalization, reindustrialization, circular economy, infrastructure, water and sanitation or security.
“The fund will continue to be part of ICO and part of the capital of ICO,” said Body. “What we are going to do is encourage the possibility that other actors can invest where the fund wants to put emphasis,” he added.
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