The EIB has invested €50 million in a new RMBS Prado VIII securitisation that will contribute to UCI’s plans to finance the energy renovation of residential homes
This operation is the second partnership in 12 months between the EIB and UCI. The previous operation, worth €100 million, was for RMBS Green Belém 1, issued in Portugal in May 2020.
The project will contribute to climate change mitigation, delivering energy savings of almost 57 GWh a year and cutting CO2 emissions by 10 269 tonnes a year.
The operation will promote energy efficiency, supporting the renovation of existing buildings and the purchase of new near zero energy housing.
The European Investment Bank (EIB) and Unión de Créditos Inmobiliarios (UCI), a joint venture between Banco Santander and the BNP Paribas Group, have signed a new agreement to promote the renovation of existing buildings in Spain and Portugal. These green investments are part of UCI’s sustainable financing strategy for individuals and condominiums.
This new partnership between the EIB and UCI is based on a single-tranche, a €50 million investment in a securitisation of residential mortgages originating in Spain worth €480 million (RMBS Prado VIII). This funding will help to grant new green and sustainable loans to individuals and condominiums that are investing in building renovations. Although the financing is mainly focused on building renovations, mortgage loans for the purchase of homes meeting high energy-efficiency standards will also be eligible.
This is the second operation signed with UCI. The previous one took place in May 2020, with the EIB investing in a €100 million tranche of RMBS Green Belém 1 (the first green bond issue in Portugal promoted by UCI). For this operation, UCI received the Sustainable Finance Award at Euronext Lisbon Awards for its active contribution to the development of the capital market in Portugal and for its positive impact on environmental, social or corporate governance.
The project will contribute to climate change mitigation and is in line with the European Commission’s “renovation wave”. Final total energy savings in Spain in Portugal are estimated to be 57.3 GWh a year from the moment the funds are fully disbursed, representing a CO2 emission reduction of 10 269 tonnes a year (equivalent to the annual energy use of 14 000 households). In addition, the projects financed by UCI with EIB support are expected to create around 940 jobs per year during the construction period.
EIB Vice-President Ricardo Mourinho Félix, who is responsible for the EU bank's operations in Spain, said: “Around 75% of buildings currently have low energy efficiency and, more critically, almost 85-95% of them will still be in use by 2050. We are very proud to help UCI to promote green projects and investments aimed at significantly improving energy efficiency in Spain and Portugal. The ongoing pandemic must not make us forget that the recovery of the European economy must continue to focus on climate action.”
UCI Chief Executive Officer Roberto Colomer added:“We are proud to expand our partnership with the European Investment Bank (EIB) to further develop our sustainable financing strategy on the Iberian peninsula and contribute to the decarbonisation of the real estate stock both in Spain and Portugal.”
Luca Bertalot, Secretary-General of EMF ECBC said: “We are pleased to see that the EEM Label is acting as market catalyst, lining up private stakeholders and the public sector on a common target, building awareness and a new green paradigm with concrete consumer benefits and transparency for investors. The market is turning the page towards a more sustainable future for everyone.”
The loans covered by this partnership will be in accordance with the criteria established by the European Mortgage Federation in the Energy efficient Mortgages Action Plan (EeMAP). In particular, renovation operations should lead to at least a 30% improvement in the energy efficiency of the building, while financing for the purchase of new housing must have near zero energy use. Both criteria are in line with access requirements for the Energy Efficient Mortgage Label (EEM Label), an initiative in which UCI is also a pioneer in Spain and Portugal.
The EU climate bank
The EIB Group recently adopted its Climate Bank Roadmap to deliver on its ambitious agenda to support €1 trillion of climate action and environmental sustainability investments in the decade to 2030 and to allocate more than 50% of its financing to climate action and environmental sustainability by 2025. As part of the Roadmap, all new EIB Group operations will also be aligned with the goals and principles of the Paris Agreement from early 2021.
In 2020, for the fifth year in a row, the EIB Group increased the percentage of its activity in Spain intended to promote projects that contribute to climate change mitigation and adaptation, up to a total of 38% (€2.85 billion), a 9 percentage point increase on the previous year. Spain is the third largest beneficiary of financing related to this objective in the European Union. The EIB uses these funds to help develop clean transportation, energy efficiency and renewable energies, and to modernise the electricity networks, among other projects.
Unión de Créditos Inmobiliarios (UCI) is a financial institution with over 30 years of experience, and is present in Spain, Portugal, Greece and Brazil (the latter as a joint venture with the Provincia Group). The company has over 600 employees, an outstanding balance of more than €10 billion, and over 350 000 customers. Its goal is to meet the demand for housing through responsible, transparent and personalised financing solutions. UCI enables access to housing and contributes to the renovation of the real estate stock to achieve more sustainable cities through its mortgages, and also through personal loans for renovations available to both individuals and condominiums. UCI has issued more than €4 billion in RMBS of the highest quality through its Prado and Belém programme since 2015.
The Energy Efficient Mortgages Initiative (EEMI), led by the European Mortgage Federation (EMF) together with over 90 financial institutions and other stakeholders from the European and global mortgage market, is intended to design and deliver an Energy Efficient Mortgage (EEM) product and accompanying framework, together with EEM data collection and disclosure capabilities.
The EIB and Unión de Créditos Inmobiliarios (UCI) are set to finance green investments in Iberia ranging from the refurbishment of existing buildings to the construction of Nearly Zero-Energy properties. These investments will be possible thanks to the provision of energy efficiency mortgages and consumer loans to the market by UCI.
The EIB and Bankia are set to facilitate access to energy-efficient and low-emission homes in Spain. To this end, the EU bank has provided Bankia with a EUR 150m loan, which the Spanish institution will match with a EUR 150m contribution of its own. This means that the new EIB-financed green mortgage credit line will have access to a EUR 300m fund. The agreement was signed today by EIB Vice-President Emma Navarro and Bankia Executive Chairman José Ignacio Goirigolzarri.
In a speech delivered today at the University of Cyprus (UCY), EIB President Werner Hoyer recalled the projects that the EU bank financed in Cyprus in 2014 and reaffirmed the EIB’s strong support for the country and in particular for its knowledge economy.