Summary sheet
The operation consists of a synthetic securitisation under InvestEU of a portfolio originated by BBVA to support green projects carried out by small, medium-sized enterprises (SMEs) and mid-caps in Spain.
The aim is to finance energy efficiency projects, in particular the construction of nearly zero energy buildings (NZEB+) residential buildings carried out by the final beneficiaries (real estate developers).
The operation is in line with the invest EU eligible area of Energy as per the Annex II of the Invest EU regulation.
The proposed operation is a synthetic securitisation under InvestEU of an SME portfolio originated by BBVA (Financial Intermediary, FI). The FI will create a new portfolio of green projects in Spain, specifically Energy Efficiency projects (new construction of NZEBs+ residential buildings) carried out by SMEs and MidCaps in Spain (real estate developers).
The operation supports the EU's and Bank's priorities in the energy sector, the EIB's climate action objectives, and will contribute to the achievement of Spain's National Energy and Climate Plan.
Some of the projects are expected to be located in less developed and cohesion regions. The operation enhances access to finance for final beneficiaries for Climate Action related investments and improves financing conditions for them through long term tenors and favourable financing conditions. Financial intermediaries, including BBVA, are pivotal in this transition, as financing is crucial for unlocking the investments needed for its realisation.
The operation contributes to reduce the market failures linked to asymmetric information. Thermal comfort in the dwellings is ensured while households' energy costs/consumption is kept to minimal levels. The risk of energy poverty, which has been accentuated with the recent increases in energy prices due to the Ukrainian conflict, is therefore minimised.
The Financial Intermediary is deemed to be capable of implementing the operation considering its overall experience. The operation is expected to be both financially and economically viable, with a good economic rate of return (ERR) and positive broader social benefit.
Addressing climate change is a central aim for BBVA, which has established itself as a frontrunner in green financing and has recently been recognised as the most sustainable bank in Europe. In December 2023, for the fourth year in a row, the Dow Jones Sustainability Index (DJSI) ranked BBVA highest in the European banking sector. The DJSI, the premier global sustainability index, announced its latest rankings on December 8, 2023, including 27 banks worldwide. BBVA also stands out for its leadership in issuing Green Bonds within the EU.
BBVA has publicly committed to mobilise green finance lending for EUR 300bn between 2019 and 2025. The EIB is a key partner to BBVA to achieve this target and has developed specific EIB products, including those targeting green financing with EIB requirements for its branch network and clients.
The project would not have been carried out (to the same extent) by the EIB without the InvestEU support.
The proposed operation falls within the scope of the EIB's Environmental and Social Standards - "Standard 11 Intermediated Finance". The Borrower / Financial Intermediary has adequate capacity, systems and processes in place for identifying, assessing, managing and monitoring environmental, climate and social (ECS) risks related to the potential sub-projects benefitting from EIB support. The Final beneficiaries will be required to comply with applicable national and EU legislation in respect of environmental and social matters, as appropriate.
Final beneficiaries will be requested to comply with applicable national and EU legislation, as appropriate.