SOMACYL SOCIAL & AFFORDABLE EE HOUSING FL

Promoter – Financial Intermediary

SOCIEDAD PUBLICA DE INFRAESTRUCTURAS Y MEDIO AMBIENTE DE CASTILLA Y LEON SA

Location

• Spain

Description

The Framework Loan (FL) aims to co-finance, in partnership with SOMACYL (Sociedad Pública de Intraestructuras y Medio Ambiente de Castilla y Leon), new energy-efficient, social and affordable housing units for rent in the region.

Additionality and Impact

The European Investment Bank (EIB), in partnership with Sociedad Pública de Intraestructuras y Medio Ambiente de Castilla y Leon (SOMACYL), will finance social and affordable energy efficient housing in the Castilla y Leon region (the Project).

This Project is compliant to a low carbon and resilient pathway, consistent with the Paris Agreement goals and principles. It will count fully towards the EIB's Climate Action and Environmental Sustainability targets.

 

Moreover, the Project is in line with the provisions of the 2022 Nice Declaration on Housing, the 2020 New Leipzig Charter, the EU Urban Agenda, and the EIB Urban Lending Review. Furthermore, it is aligned with the EU Energy Performance of Building Directive and with the Bank's Energy Lending Policy for new buildings. 

 

This Project will contribute directly to promote progress towards multiple Sustainable Development Goals, including sustainable cities and communities, climate action and reduced inequalities. Furthermore, the Project is expected to fulfil the social sustainability criteria, being thus

eligible under the EIB's Sustainability Awareness Bonds guidelines.

 

The Project addresses a number of market failures, in particular the lack of available social housing supply as the market does not sufficiently cater for the demand of low-income people; it also addresses sub-optimal investment flows into highly energy efficient and resilient new buildings.

Given the robust track record of SOMACYL, together with the evidence of solid demand and its contribution to the socio-economic inclusion of lower-income citizens, the Project is expected to combine excellent economic and acceptable financial performance for the social housing sector, justifying therefore EIB's involvement.

 

The availability of long-term finance for social housing at affordable interest rates is a key contribution of the EIB, considering the very long-term nature of the investment and its positive impact on overall project cost.

 

The EIB loan will include flexible drawdown terms and conditions adjusted to the investment horizon of the projects. The framework loan structure provides ample flexibility to SOMACYL through inter alia continued dialogue with the EIB.

Objectives

The aim is to address a number of issues, in particular the lack of available social housing supply, since the market does not sufficiently cater for the demand of low-income people. It also addresses sub-optimal investment flows into high energy efficient and resilient new buildings. This project complies with a low carbon and resilient pathway, in line with the Paris Agreement goals and principles, as well as the EIB's Climate Action and Environmental Sustainability targets. It will also contribute to achieve multiple Sustainable Development Goals, including sustainable cities and communities, climate action and reduced inequalities. Furthermore, the project is expected to fulfil the social sustainability criteria, being thus eligible under the EIB's Sustainability Awareness Bonds guidelines.

Sector(s)

• Urban development - Construction

Proposed EIB finance (Approximate amount)

EUR 60 million

Total cost (Approximate amount)

EUR 120 million

Environmental aspects

The compliance with the relevant EU Directives will be verified during appraisal and at allocation stage: Environmental Impact Assessment (EIA) Directive 2011/92/EU (amended by Directive 2014/52/EU), Strategic Environmental Assessment (SEA) Directive 2001/42/EC, EU Habitats Directive 92/43/EEC and EU Birds Directive 2009/147/EC. In addition, upon the EIB's request, the promoter will be requested to provide selected Energy Performance Certificates obtained in line with the EU Directive 2010/31/EU during implementation or after completion of works.

Procurement

The promoter has to ensure that contracts for implementation of the project will be tendered in accordance with the applicable EU procurement legislation: Directive 2014/23/EU, 2014/24/EU and 2014/25/EU as well as Directive 92/13/EEC or Directive 89/665/EEC as interpreted by the Court of Justice of the EU, with publication of tender notices in the EU Official Journal, as and where required.

Status

Signed - 29/06/2023