The European Investment Fund has provided a €101 million guarantee through its InvestEU programme to the Spanish bank Banco Sabadell, aimed at unlocking up to €336 million to support Spanish SMEs and mid-cap businesses in the renewables sector.
The guarantee worth €101 million of risk-taking capacity is one of InvestEU's first agreements in the Spanish market.
Thanks to the new funding, green startups that are operational in Spain can expect improved access to early stage venture capital. Specifically, funds will flow from the Sabadell Venture Capital, BIDSA and SINIA subsidiaries to venture debt commitments in climate startups, along with senior and mezzanine loans to industrial players and senior bridge or subordinated loans for renewable energy and sustainability.
Banco Sabadell will benefit from up to 80% of the risk for its loans in this area being guaranteed by the EIF mechanism.
Raúl Rodríguez, deputy general manager of Banco Sabadell, said: "Banco Sabadell has a wide range of alternative financing solutions, especially in the start-up segment through Sabadell Venture Capital, for SMEs through BanSabadell Inversió Desenvolupament (BIDSA), and in the sustainability and decarbonization segment with Sinia Renovables.
"Banco Sabadell is a leading entity in financing SMEs and middle market companies, it has been a pioneer in being the first bank in Spain to offer Venture Debt financing to start-ups in 2017, and next year it will be 25 years of existence. the first operation we carried out in investment in renewables; many years in which we have accompanied dozens of clients on their way to sustainability."
The announcement caps off a busy year for the EU's early-stage investing instrument.
A new €3.5 billion EIF-managed fund-of-funds was launched at the Scale-Up Europe Conference in February, with the help of EU member states Italy, France, Germany, Spain and Greece.
Meanwhile climate action has been a key theme for fund this year. Earlier this month, the EIF confirmed a €50 million cash contribution to the climate tech-focused fund World Fund, in one of its biggest ever contributions to a maiden fund vintage.
Responding to confirmation of the Banco Sabadell partnership, EIF's chief executive Alain Godard added: "European small businesses must have access to innovative, easily accessible sources of finance.
"We are delighted to once again join forces with Banco Sabadell to support Spanish small businesses and mid-caps, the backbone of the national economy. In partnership with Banco Sabadell, EIF is pleased to be able to boost financing for renewable energy projects, innovative start-ups and sustainability companies in Spain.”