Santander and BNP Paribas’ UCI Launches Fund for Sustainable Residential Homes in Spain and Portugal with €440m from EIB, ICO, and EIF

(IN BRIEF) Banco Santander and BNP Paribas Group’s joint venture, Unión de Créditos Inmobiliarios (UCI), has launched a securitisation fund called RMBS Green Prado XI that aims to finance sustainable residential homes in Spain and Portugal. The European Investment Bank (EIB) Group, Instituto de Crédito Oficial (ICO), and the European Investment Fund (EIF) have collaborated to provide €440m in funding for the project. The initiative is part of UCI’s sustainable financing strategy for individuals and condominiums and complies with the Securitisation Regulation and Sustainalytics’ Green Bond Framework. The financing will provide green and sustainable loans for building renovations, purchase of new near-zero-energy housing, and contribute to climate change mitigation.

(PRESS RELEASE) LUXEMBOURG, 4-Apr-2023 — /EuropaWire/ — The European Investment Bank (EIB), the lending arm of the European Union, announces the Unión de Créditos Inmobiliarios (UCI), a joint venture between Banco Santander and BNP Paribas Group, has launched the RMBS Green Prado XI securitisation fund, in which the EIB Group (European Investment Bank and European Investment Fund), and the Instituto de Crédito Oficial (ICO) have invested. The three parties have collaborated to promote the renovation and construction of sustainable residential homes in Spain and Portugal. The funding aligns with UCI’s sustainable financing strategy for individuals and condominiums.

The EIB Group will provide a commitment of €240 million, €200 million of which has already been disbursed by EIB. The investment will be distributed to Class A and Class B, €121.4 million and €78.6 million, respectively. The EIF will provide its €40 million commitment to the most senior class shortly. Meanwhile, ICO has invested €100 million in Class A, marking the first joint transaction among the three parties. The operation is based on the securitisation of a residential mortgage portfolio in Spain with a €490 million value. The EIB and ICO are acquiring bonds to promote green investments.

The new residential mortgage-backed security securitisation fund adheres to the Securitisation Regulation (EU) 2017/2402 and Sustainalytics’ Green Bond Framework. The transaction meets the regulatory requirements of the Capital Requirements Regulation and the short-term liquidity coverage ratio. The financing will provide green and sustainable loans to individuals and condominiums that invest in building renovations, although mortgage loans for the purchase of homes with high energy-efficiency standards are also eligible.

This initiative will support the renovation of existing buildings, purchase of new near-zero-energy housing, and contribute to climate change mitigation. UCI predicts that the fund will generate energy savings of 396 GWh per year and reduce 100,904 tonnes of CO2 per year, which is equivalent to the annual energy use of 28,937 households.

This operation will support energy efficiency by promoting the renovation of existing buildings and facilitating the purchase of new near-zero-energy housing. Additionally, it will provide an additional boost to the European Local Energy Assistance (ELENA) program, which is led by the EIB and the European Commission under Horizon 2020. The ELENA program offers technical assistance for energy efficiency, renewable energy, and sustainable urban transport projects, and its grants can be used by public and private sector entities to implement local, regional, and national investment programs. Over the last 13 years, the EIB has allocated and disbursed around €236 million in grants to 136 projects through the ELENA program.

EIB Vice-President Ricardo Mourinho Félix said: “We are delighted to join forces with ICO and UCI in this securitisation fund to support the energy transition of residential housing in Spain and Portugal. We hope that this first joint operation of the three institutions in a residential mortgage securitisation will help accelerate the transition to more sustainable housing solutions. This transition is one of the lines of action that the EIB Group has been steadily reinforcing in Spain and Portugal as part of its commitment to climate action and environmental sustainability.”

UCI Deputy CEO for Finance Philippe Laporte added: “Despite the complexity of the current environment, this cooperation between the EIB, EIF and ICO on Spain’s first green STS RMBS securitisation operation shows our alignment with the high standards and ambitious environmental, social and governance objectives of UCI since 2020, creating a new sustainable commitment in the residential real estate sector on the Iberian peninsula.”

ICO Chairman José Carlos García de Quevedo said: “ICO’s participation in this operation is part of the ICO Group’s strategy for 2022-2027 of promoting projects with positive environmental and social impact, helping to boost this green transition process.”

“As cities expand, improving energy efficiency is paramount in the context of tackling climate change and something that we are looking to address in collaboration with our partners ICO and UCI. This transaction will make an important contribution to reducing energy consumption and generate substantial energy savings in residential homes, in line with EU ambitions in the area of sustainability,” said EIF Chief Executive Marjut Falkstedt.

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 Spain, with record support for climate action and environmental sustainability projects and €9.9 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 ICO

The Instituto de Crédito Oficial (ICO) is Spain’s national promotional bank, attached to the Spanish Ministry of Economic Affairs and Digital Transformation. It supports innovative and sustainable business projects in Spain and other markets by granting loans and other forms of financing, contributing to sustainable growth. As a national promotional bank, it offers financing to companies, particularly SMEs and the self-employed.

About UCI

Unión de Créditos Inmobiliarios (UCI) is a financial entity with 30 years of experience operating in Spain, Portugal, Greece and Brazil (with the help of Provincia Group). It has over 600 employees, more than €10 billion in outstandings and over 350 000 customers. Its goal is to meet the demand for housing through responsible, transparent and personalised financing solutions. UCI uses its mortgages and renovation loans to individuals and condominiums to facilitate access to housing and contribute to the renovation of real estate stock to create more sustainable cities. UCI has issued more than €4 billion in RMBS of the highest quality through its Prado and Belém programme since 2015.

Media contact:

Maite Cordero
m.corderomunoz@eib.org
+352 4379 – 84551

Jose Vicente Alzola
j.alzola@ext.eib.org
+352 4379 – 72859

press@eib.org
+352 4379 – 21000

SOURCE: European Investment Bank