Financial institutions will be able to join the ICO DANA Guarantee Line from tomorrow

Pedro Sánchez has chaired a new meeting of the Crisis Committee to monitor the effects of the DANA, which has established an allocation of 5 billion euros in guarantees that will help affected households, the self-employed and companies to access financing under the best conditions.

Moncloa Palace, Madrid

The President of the Government of Spain, Pedro Sánchez, chairs the meeting of the crisis committee to monitor the effects of the DANA (Pool Moncloa/Borja Puig de la Bellacasa)

The President of the Instituto de Crédito Oficial (ICO), Manuel Illueca, appeared today at a press conference at the Moncloa Complex, after the meeting of the Crisis Committee to monitor the effects of the storm, which was chaired by the head of the Government, Pedro Sánchez.

Illueca stressed the importance of the ICO DANA Guarantee Line, which in the 32 worst affected municipalities alone will help some 32,000 companies, as well as, for the first time, 535,000 people and more than 150,000 affected households, to "bring the aid forward and ensure that liquidity arrives as soon as possible, because without it there is no reconstruction".

Illueca therefore announced that financial institutions will be able to join the ICO DANA Guarantee Line from tomorrow, Friday, through the ICO platform, which shows the rapid implementation of this programme which is part of the Immediate Response, Reconstruction and Relaunch Plan approved by the Government on 6 November. The loans will thus already be available for households and businesses to apply for.

With 5 billion in guarantees, this line will help mobilise financing under the best conditions so that households, the self-employed and businesses can mitigate the damage caused to their homes and vehicles by the heavy rainfall as soon as possible.

To facilitate the deployment of the line and to make the cost of the operations as advantageous as possible, the Ministry of Economy guarantees, managed by the ICO, will cover 80% of the amount of the financing and will be free of charge, which will allow "financial institutions to offer the best conditions". The capacity to mobilise resources will reach 6.25 billion euros. Operations signed by financial institutions since 29 October will be eligible for this programme, which means that the funds can now reach those affected. "The guarantee will be processed by financial institutions through the public-private partnership scheme, successfully deployed in the pandemic, to reach every corner of the affected areas," said Illueca, who stressed that "the necessary resources will be made available for as long as necessary".

The President of the Government of Spain, Pedro Sánchez, chairs the meeting of the crisis committee to monitor the effects of the DANA| Pool Moncloa/Borja Puig de la Bellacasa

The design of the line enables households, the self-employed and companies to cover their urgent liquidity needs in an agile manner, providing financing as an advance on the amounts to be received from the Insurance Compensation Consortium and/or public administrations in the form of compensation or aid.

In addition, it will promote the recovery of the productive capacity of the business fabric in the affected areas, by making financing available for investment and working capital.

To meet these objectives, the ICO Dana Guarantee Line has three modalities:

• Modality 1: financing backed by aid and compensation for households
• Modality 2: financing backed by aid and compensation for companies and the self-employed
• Modality 3: Recovery of the Productive Capacity of companies

The Council of Ministers on 11 November approved the activation of the first tranche of 1 billion euros, which will be allocated to each modality according to demand.

Financing backed by aid and compensation for households

Given the severity of the damage caused by the DANA, for the first time the Ministry of Economy guarantees managed by the ICO are aimed at guaranteeing the financing of private individuals. Households or communities of owners resident in any of the municipalities affected by the consequences of the natural disaster listed in the annex to Royal Decree-Law 6/2024, as well as those employed in a workplace located in any of these municipalities, may apply for guaranteed financing.

The maximum amount of the loan that can be obtained will be the sum of the compensation requested from the Insurance Compensation Consortium, which may not exceed the capital insured by the insurance policy, and the expected amount of the aid requested. The loan term will be five years and no fees will be charged, with the aim of keeping the cost of financing as low as possible.

Financing for the self-employed and companies

The ICO DANA Guarantee Line includes two modalities for the self-employed and companies. On the one hand - like households and under similar conditions - under modality 2, companies and self-employed workers with a registered office or establishment in one of the affected municipalities may apply for loans as an advance on compensation and aid.

The President of the Instituto de Crédito Oficial (ICO), Manuel Illueca, appears after the meeting of the crisis committee to monitor the effects of the DANA| Pool Moncloa/Borja Puig de la Bellacasa

In addition, there is a need to reactivate the region's economy and support the affected productive fabric, so that they can get back to normality and tackle the direct and indirect damage. For this reason, the ICO DANA Guarantee Line has a third modality to also guarantee new loans aimed at financing investments and working capital.

Modality 3 is aimed both at the business fabric of the affected municipalities and at companies and self-employed workers whose means of transport used for business or professional activity have been damaged whilst undertaking their activity in one of the affected localities.

The maximum loan in this modality is 12.5 million euros per company and the repayment terms will be 5 years for working capital, and 7 years for investment, increasing to up to 10 years for companies in the agricultural sector (compatible with the ICO line of the Ministry of Agriculture).

The operations will have a 12-month grace period, which eases the financial burden on companies during the first year. This period may be extended by an additional 12 months if the characteristics of the investment project so require within the maximum maturity of the guaranteed operation.

Non official translation

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• Aid from the Immediate Response, Reconstruction and Relaunching Plan

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Tags:

• DANA (Isolated Depression at High Levels)
• Government of Spain
• Economy