The EU bank will provide up to €27 million to finance the construction of affordable rental units, the majority to be in near-zero-energy buildings.
Employment impact: over 450 jobs per year will be created during the construction phase.
The project is part of the European Fund for Strategic Investments (EFSI), the main pillar of the Investment Plan for Europe.
The European Investment Bank (EIB) will be supporting Sociedad Anónima Municipal Actuaciones Urbanas de Valencia (AUMSA), a municipal company owned by the city of Valencia, with a loan of up to €27 million to promote affordable public rental housing. Specifically, the EIB loan will finance the construction of 323 new units, 85% of which will be in near-zero-energy buildings, and the rehabilitation of four existing ones across different locations in the city of Valencia. These investments will constitute a 54% increase in AUMSA’s existing stock of affordable public rental housing.
The financing, under the framework of the European Fund for Strategic Investments (EFSI) as part of the Investment Plan for Europe, will help to create more than 450 jobs per year during the implementation phase.
Thanks to the support of the EIB and EFSI, AUMSA will enhance the flexibility and functionality of the housing market in Valencia, offering more options for low- and medium-income groups, thus helping a segment of the population that can have difficulty accessing housing. The operation will also contribute to the overall reduction of rental prices in the city, which have increased by 40% between 2015 and 2019, and will encourage the creation of businesses and additional activities, resulting in improved services and quality of life for residents.
The agreement, the first signed with AUMSA, targets different urban regeneration’s objectives, including integrated urban development, social inclusion, energy efficiency (by reducing energy consumption and using renewable energies in the homes,) and climate action. The award criteria of the affordable public rental housing units will follow gender and social equality criteria.
EIB Vice-President Ricardo Mourinho Félix, who is responsible for the Bank’s operations in Spain and Portugal, said: “One of the EIB’s main objectives is to promote social cohesion. For this reason we are proud to be joining forces with Valencia city council to help people with limited resources or in situations of vulnerability to access affordable housing in these particularly difficult times. This operation demonstrates the EIB’s commitment to improving quality of life for low-income families, generating high-quality employment and helping to ensure sustainable and inclusive economic recovery in the region.”
European Commissioner for the Economy, Paolo Gentiloni, said: “I warmly welcome this financing agreement between the EIB and the Valencia City Council, which is backed by the Investment Plan for Europe. This construction and rehabilitation project successfully demonstrates how targeted investment can help tackle several pressing issues at once: creating new jobs and making available affordable, socially inclusive and energy-efficient housing options.”
The Deputy Mayor of Valencia Sandra Gómez stated that the financing of 327 homes with the AUMSA plan “fulfils one of the most important duties of local government, namely to guarantee access to housing. Through this plan, which has a total budget of €54.54 million, we are providing planning solutions for many areas of the city and extending the offering of affordable public rental housing. The rental price for the new builds will be kept within €4 and €5 per square metre, which is well below the market rate. Thanks to the EIB, we are going to be able to finance a basic plan to guarantee access for families and people who face difficulties when accessing housing, such as young people and older people living alone, single-parent families, and victims of domestic violence.”
The operation has been approved as part of the social and affordable housing investment platform in Spain approved by the EIB Board of Directors in June 2018, following similar approvals for Madrid, Zaragoza, Malaga and Seville.
Sociedad Anónima Municipal Actuaciones Urbanas de Valencia (AUMSA)
Sociedad Anónima Municipal Actuaciones Urbanas de Valencia (AUMSA) is a local public-sector company belonging to Valencia city council whose mission is urban development, construction, urban rehabilitation, planning studies and project management.
The EIB will support the Malaga Municipal Housing Company (SMVM), under the Municipality of Malaga, to improve the availability of social rental housing in the city. To this end, the EIB has approved up to €70 million of financing for the construction of 1 001 affordable social rental homes. A first tranche of up to €37 million was signed last week and will go towards the construction of the first 476 homes. The project will be implemented until 2023, helping to create more than 600 jobs per year during the implementation phase. The EU bank is providing this financing under the Investment Plan for Europe.
The EIB will provide EUR 270m in financing to the Valencia Region on favourable terms, with a view to helping develop the investments being implemented in the region under various EU funding programmes for the 2014-2020 period. EIB Vice-President Emma Navarro and Minister of Finance and Economic Model for the Valencia Region Vicent Soler signed the initial, EUR 80m tranche of this financing today. The aim of the agreement is to promote the competitiveness and sustainability of the Valencian economy and foster job creation.