Its socialist prime minister today unveiled a new sovereign wealth fund called “España Crece (Spain is Growing)”, which it expects to mobilize a total of 120 billion euros, about a fifth of which will go towards building 15,000 homes a year to combat the housing crisis.
Access to affordable housing has in recent years become one of the main concerns of Spaniards, who have seen the average price per square meter double in ten years, according to real estate portal Idealista.
How will the fund work?
The España Crece fund, the creation of which was announced in January by Sanchez, aims to replace the European NextGenerationEU funds, which are expected to expire at the end of the year after they played a leading role in the country’s strong economic recovery after the Covid-19 pandemic.
It will initially draw 10.5 billion euros from EU funds, but in time it aims to mobilize 120 billion euros of “public and private investment”, about “7% of Spanish GDP”, as Sanchez said.
In total, the new fund will dedicate “up to 23 billion euros” to housing alone, with the aim of building “15,000 houses a year” to address the “housing crisis”, he said.
However, he did not specify the time horizon of these investments.
Energy, digitization, security and AI are the goals
The new funds are also expected to mobilize investments in energy, digitalisation, artificial intelligence or even security, according to the government, as Sanchez had spoken in January of an “exercise of national sovereignty”.
Spain was one of the two countries that benefited most from European funds for the post-Covid recovery, receiving around €160 billion in grants and loans.
This very significant amount allowed to massively support activity in the country, where growth reached 2.8% in 2025, almost double that of the Eurozone.
For 2026, the left-wing Spanish government expects a 2.3% increase in GDP, as Sanchez clarified today.
