EIB Group and Santander Launch First Synthetic Securitization Transaction for Energy Efficiency in Portugal

EIB Group and Santander Launch First Synthetic Securitization Transaction for Energy Efficiency in Portugal

(IN BRIEF) The EIB Group and Santander have signed an agreement to support energy efficiency investments in Portugal through a synthetic securitization transaction. The partnership aims to finance the construction of nearly-zero-emissions buildings and the renovation of existing residential properties in line with sustainable standards. The EIB Group will provide an €81 million unfunded guarantee, enabling Santander to finance energy efficiency projects worth twice the guarantee amount. The initiative will contribute to reducing CO2 emissions, improving air quality, and supporting Portugal’s energy efficiency and renewable energy targets.

(PRESS RELEASE) LUXEMBOURG, 15-May-2023 — /EuropaWire/ — The European Investment Bank (EIB), the lending arm of the European Union, announces that the EIB Group (European Investment Bank and European Investment Fund) and Santander have inked a groundbreaking synthetic securitization transaction aimed at bolstering the financing of energy efficiency investments in Portugal. The agreement will specifically support the construction of new nearly-zero-emissions buildings and the renovation of existing residential properties to meet sustainable standards.

The signing ceremony took place in Lisbon, with the presence of EIB Vice-President Ricardo Mourinho Félix, EIF Director George Passaris, Santander Portugal’s Vice-President Manuel Preto, and Santander Portugal’s Director Amílcar Lourenço.

This transaction will facilitate the provision of new green and sustainable mortgages to individuals, small and medium-sized enterprises (SMEs), and MidCaps. The funds will be directed towards building renovations and new constructions that adhere to high energy-efficiency standards, meeting the eligibility criteria set by the EIB.

Notably, this marks the first synthetic securitization transaction between Santander and the EIB Group in Portugal. As part of the agreement, the EIB Group will offer an unfunded guarantee of €81 million, enabling Santander to finance energy efficiency investments worth twice the value of the EIB Group guarantee.

The individual projects benefiting from this financing can reach a maximum investment of €25 million, with funding of up to €12.5 million and a minimum term of two years.

The projects financed under this initiative will contribute to the reduction of CO2 emissions, enhance air quality for improved public health, and support climate change mitigation efforts.

“We are delighted to join forces with Santander in this securitization to support the green transition in the Portuguese residential housing segment,” EIB Vice-President Ricardo Mourinho Félix said. “With this new signature, the EIB Group continues supporting the expansion of the green mortgage offers and its accessibility in Portugal. Accelerating the transition to more sustainable housing solutions in the country is a key component of the EIB commitment to climate action and environmental sustainability in Portugal.”

Amílcar Lourenço, Director of Santander in Portugal, underlined the importance of this new agreement with the EIB, “which allows new funds to reach those who invest in the energy efficiency of buildings. At Santander, we want to point the way towards the climate transition, encouraging and creating conditions for people and companies to be increasingly sustainable”.

“At the EIF, we are proud to be doing our part in promoting green financing solutions. This securitisation transaction, bringing together European and local actors, will make available considerable resources to improve energy efficiency in households across Portugal,” said EIF Chief Executive Marjut Falkstedt. “Tackling climate change and boosting environmental sustainability is an uphill battle, but it is very encouraging when we are able to make a tangible contribution in achieving real progress”.

This project aligns with national and European targets for energy efficiency and renewable energy. Specifically, it supports the objectives outlined in the European Performance of Buildings Directive (EPBD), the Energy Efficiency Directive (EED), and the Renewable Energy Directive (RED), as well as Portugal’s National Energy and Climate Plan (NECP).

Background information

About the EIB

The European Investment Bank Group (EIB Group) — formed by the European Investment Bank (EIB) and the European Investment Fund (EIF) — reported another year of excellent results in Portugal with €1,7 billion of total financing signed in 2022.

About the EIF

The European Investment Fund (EIF) is part of the European Investment Bank Group. Its central mission is to support Europe’s micro, small and medium-sized businesses (SMEs) by helping them to access finance. The EIF designs and develops venture and growth capital, guarantees and micro-finance instruments that specifically target this market segment. In this role, it contributes to the achievement of key EU policy goals such as competitiveness and growth, innovation and digitalisation, social impact, skills and human capital, climate action and environmental sustainability.

About Santander Portugal

Santander Portugal is a reference bank in the Portuguese financial system, with the mission of contributing to the development of people and companies. Serving more than 1.7 million customers, Santander’s vision is to be the best open platform for financial services, acting responsibly and earning the trust of employees, customers, shareholders and society.

Santander is the largest private bank in Portugal, both in terms of profitability and lending. Its balance sheet strength is reflected in high capital ratios (CET1 of 13.5% in March 2023, above the SREP requirement of 8.3%), and a high quality loan portfolio (NPE ratio of 2. 1%).

The Bank has been focusing on digitization, simplification of processes and innovation, providing a closer and more personalized service to its customers, in order to provide them with the best possible experience.


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SOURCE: European Investment Bank


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