SANTANDER ABS FOR SME SUPPORT 2025

The operation consists in the purchase of several tranches of a true-sale securitisation in order to stimulate lending to small and medium sized enterprises (SMEs) and Mid-Caps. EUR 100m will comply with the EIB's climate action guidelines, mainly dedicated to Energy Efficiency projects such as the construction of Nearly Zero-Energy Buildings (NZEBs+) carried out by real estate developers.

The aim is to support the intermediary in financing small/medium projects carried out by the final beneficiaries.

The main purpose of this operation is to facilitate favourable financial support for SMEs and Mid-Caps. Santander has a good track-record in implementing EIB funds to support the development of sound sub-investment projects in Spain. EIB contribution takes the form of financial benefit, longer maturity and customised terms. By extending favourable lines to SMEs and Mid-Caps via an established intermediary, the EIB can play a counter-cyclical role, preserve employment and positively contribute to the recovery of not only the beneficiaries but also the European economy.

EUR 100m will comply with the EIB's climate action guidelines, mainly dedicated to Energy Efficiency projects (new construction of NZEBs+) carried out by real estate developers.

The operation supports the EU's and Bank's priorities in the energy sector, the EIB's climate action objectives, and will contribute to the achievement of Spain's National Energy and Climate Plan.

The operation enhances access to finance for final beneficiaries for Climate Action related investments and improves financing conditions for them through long term tenors and favourable financing conditions. Financial intermediaries are pivotal in this transition, as financing is crucial for unlocking the investments needed for its realisation.

Through energy savings, energy efficiency projects reduce carbon externalities and, in most cases, air pollution and other negative externalities such as increased comfort and air quality in the dwellings, social and public benefits that are not fully internalised by private investors. The energy efficiency market is subject to asymmetric information. In the buildings sector, rental properties are subject to split incentives between property owners, who undertake energy efficiency investments, and tenants, who pay the energy bills.

The Financial Intermediary is deemed to be capable of implementing the operation considering its overall experience. The operation is expected to be both financially and economically viable, with a good economic rate of return (ERR) and positive broader social benefit.

The operation enhances access to finance for final beneficiaries and improves financing conditions for them through Transfer of Financial Advantage (ToFA) and longer tenor of sub-loans of the new portfolio. It also helps to create jobs in the real estate sector.

The operation falls within the scope of k in the EIB's Environmental and Social Standards - "Standard 11 Intermediated Finance". The Borrower / Financial Intermediary has adequate capacity, systems and processes in place for identifying, assessing, managing and monitoring environmental, climate and social (ECS) risks related to the potential sub-projects benefitting from EIB support. The Final beneficiaries will be required to comply with applicable national and EU legislation in respect of environmental and social matters, as appropriate.

Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.