Spain’s government announced Monday the launch of ‘España Crece’ (Spain Grows), a new sovereign wealth fund designed to mobilize approximately €120 billion in investment to bolster economic growth and modernize the country’s productive infrastructure. The initiative, unveiled by Economy Minister Carlos Cuerpo and Housing Minister Isabel Rodríguez, aims to extend the transformative impact of the Next Generation EU funds beyond their scheduled conclusion in 2026.
The fund will be managed by the Instituto de Crédito Oficial (ICO), Spain’s official credit institute, which will receive a capital injection of €13.3 billion. This comprises €10.5 billion in loans from the Recovery Plan and €2.8 billion from non-refundable transfers, enabling the ICO to offer more favorable terms on loans. According to government statements, the ICO will have the capacity to invest up to €60 billion directly, while simultaneously incentivizing co-investment from the private sector to reach the overall target of €120 billion.
‘España Crece’ will offer a range of financial instruments, including loans, project financing, capital injections, and guarantees, to support businesses throughout their lifecycle, from start-up to expansion. Priority investment areas include affordable rental housing, the green transition, and innovative sectors such as biotech, food-tech, and care economy, with a focus on ensuring balanced development across all regions of Spain.
A significant portion of the fund will be dedicated to increasing the supply of affordable rental housing. The government intends to mobilize up to €23 billion in investment for this segment, potentially supporting the construction of approximately 15,000 homes annually. The ICO will act as a catalyst, promoting co-investment and attracting private capital to maximize impact. Public participation is intended to improve the viability of projects, accelerate their implementation, and attract additional resources.
The initiative comes as Spain seeks to maintain economic momentum following the disbursement of funds from the European Union’s Next Generation EU recovery program. According to a statement released by the government, the fund is intended to consolidate the current stage of economic growth and modernize the Spanish productive fabric. Minister Cuerpo is scheduled to present the fund to investors and businesses later this week, according to reports from El Economista.