The EIB is providing financing of €36.2 million for the construction of social housing with high energy efficiency standards in Barcelona, with the option of increasing this to €65 million in 2022.
This agreement comes on top of the €125 million loan signed in 2017.
The financing is part of the EU bank’s package of measures to help EU Member States to address the pandemic.
Employment impact: over 570 jobs per year will be created during the construction phase.
The European Investment Bank (EIB) has signed an agreement to support Barcelona City Council in its efforts to improve the city’s current social housing supply. To this end, the EIB will provide €36.2 million to the Institut Municipal de l’Habitage i Rehabilitació de Barcelona (IMHAB) to finance the construction of 11 developments and 489 affordable social rental homes in various locations across the city. According to the agreement between the EIB and IMHAB, the financing could be increased to €65 million if necessary. The project will be implemented up to the end of 2023, helping to create more than 570 jobs per year during the construction phase.
The agreement targets a number of different objectives, including urban regeneration, the inclusion of social services, energy efficiency and climate action. Specifically, Barcelona City Council will make more housing options available for low- and middle-income groups thanks to the EIB support. In addition, the operation will increase IMHAB’s current stock of affordable social rental housing by 6% and help reduce rental prices in the city, which have risen by 40% over the past six years.
In line with the Energy Performance of Buildings Directive and the Renovation Wave initiative, the agreement sees the inclusion of social infrastructure and services to improve the lives of new tenants, such as the construction of day-care centres, community facilities for young people and older people, and playgrounds. Furthermore, the energy performance of all the homes will be at least 20% above the minimum required by Spanish national regulations for the construction of new housing. The estimated total final energy savings are 290.5 MWh compared to the baseline scenario. This is equivalent to the annual energy consumption of 70 households.
The 11 developments included in the financing package feature some of the most innovative projects being promoted by Barcelona. Examples include three industrialised construction housing developments, two developments with 135 prefabricated wooden homes in the old Sant Andreu barracks, and 40 homes made from recycled shipping containers in the Sants-Montjuïc district.
The EIB plays a key role in the development and construction of social housing in Spain, a sector in which Barcelona has been a pioneer in attracting European public investment. The signed agreement is the second of this type, following an initial financing agreement for €125 million in 2017 to support the construction of 1 570 affordable social rental homes. In total, the EIB financing comes to more than €160 million, with the option of increasing it further to almost €200 million. This will enable Barcelona to push ahead with the construction of more than 2 000 homes, providing affordable housing for more than 4 500 people. The EIB also recently signed agreements with the cities of Madrid, Malaga, Seville and Valencia.
EIB Vice-President Ricardo Mourinho Félix, who is responsible for the Bank’s operations in Spain, said: “The economic crisis caused by COVID-19 has been especially difficult for the most vulnerable groups of society, such as those on low incomes, young people, older people and those at risk of social exclusion. We are delighted to be supporting Barcelona City Council’s investment plans to finance the construction of around 500 energy-efficient homes, contributing to the creation of jobs and additional activities that will improve residents’ quality of life.”
Barcelona City Councillor for Housing and Renovation and IMHAB President Lucia Martín highlighted that “public bank financing is an essential tool for reversing decades of construction of public housing – mostly for sale – that ended up in private hands and on the open market. Thanks to the EIB financing, Barcelona City Council can promote affordable social rental housing on much more favourable loan terms than those offered by traditional banks.”
The agreement is part of the measures the EIB has taken in response to the COVID-19 pandemic in order to – among other things – deploy its support as quickly as possible and finance a higher percentage of the project that it would not normally cover.
Institut Municipal de l’Habitage i Rehabilitació de Barcelona (IMHAB)
The Institut Municipal de l'Habitatge i Rehabilitació de Barcelona (IMHAB) is Barcelona City Council’s municipal body responsible for promoting the construction of public housing, managing the available housing stock, buying and acquiring apartments from the private sector, and promoting sustainable housing policies such as the refurbishment of apartments and buildings. IMHAB manages around 10 000 housing units and has a further 2 300 homes under construction or with construction about to commence, most of which will be used as affordable social rental housing.
The EIB will provide a EUR 125m loan to the Barcelona Municipal Housing Board (a public entity under the responsibility of the City Government), with the aim of building 2 198 homes for public rental to low-income households. The agreement is supported by the European Fund for Strategic Investments (EFSI), the central pillar of the European Commission's Investment Plan for Europe (the so-called Juncker Plan), and was signed today in Barcelona by EIB Operations Director for Spain and Portugal Birthe Bruhn-Léon and Mayor of Barcelona Ada Colau.
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 finance around 40 projects in Barcelona that aim to support climate change mitigation and adaptation in the city. To this end, the EU bank will provide €95 million to promote urban regeneration, with a focus on the environment but also on social inclusion and job creation to boost the economic recovery in the wake of the COVID-19 crisis.