Spain: EIB-Banco Santander: agreement to finance investments in energy efficiency in the hotel sector
10 December 2015
The European Investment Bank and Banco Santander signed an agreement worth EUR 50 million under the Private Finance for Energy Efficiency initiative, a new European scheme to increase and improve financing conditions to private sector investments in reducing energy use in Spain.
This operation is the second agreement with a European bank to support energy efficiency investment under the new Private Finance for Energy Efficiency (PF4EE) financial instrument launched by the European Investment Bank and European Commission (LIFE Programme).
The PF4EE instrument combines three elements. The first is an EIB loan to improve the funding conditions of the energy efficiency investments financed by Santander. The second component partially covers potential losses by that Santander may incur as a result of the abovementioned energy efficiency loans. The third element will strengthen the lending capacity to energy efficiency investments of Santander by passing on technical and financial experience gained from similar schemes elsewhere in Europe.
A EUR 50 million EIB loan will finance through Banco Santander investments improving the energy efficiency in hotel establishments and to a lesser extent in other buildings for touristic lodging across Spain. The risk protection will cover 80% of Santander potential losses under these loans up to a maximum agreed amount. Banco Santander will also benefit from the technical and financial expertise of the EIB during the start of the operation for preparing marketing activities and assistance in the identification and appraisal of energy efficiency investments.
The operation supports national and European targets in energy efficiency and as a result supports climate change and security of energy supply objectives of the EU. In addition, the operation contributes to improving the competitiveness of the Spanish hotel sector
Private Finance for Energy Efficiency (PF4EE) instrument is a joint agreement between the EIB and the European Commission (under the LIFE programme) which aims to address the limited access to adequate and affordable commercial financing for energy efficiency investments. The final objective is to unlock EUR 1 billion of private investment in energy efficiency in Europe 28. More information about the PF4EE can be found at www.eib.org/pf4ee.
The EIB is one of the largest lenders for investment in climate-related investment worldwide. In 2014 it provided more than EUR 19 billion for climate-focused projects, representing around 25% of the EU Bank’s overall lending activity.
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