The Diplomat
The European Commission yesterday presented its positive assessment of Spain’s modified Recovery and Resilience Plan (RRP), which includes a chapter dedicated to REPowerEU and which will allow the immediate mobilization of more than 93 billion euros to be added to the 37 billion that Spain has already received from European funds.
Last June, Spain asked Brussels to authorize an addendum to its Recovery, Transformation and Resilience Plan. Since then, the Spanish government has been awaiting the decision to apply for the 10 billion euros of the fourth tranche of the European Next Generation funds and to access the second phase of the European Recovery Plan and qualify for the 83 billion euros in loans that it is entitled to from the aforementioned mechanism. With the Brussels decision, the Spanish recovery plan now totals 163 billion euros (83 billion euros in loans and 80 billion euros in grants), with 40% of the funds dedicated to climate objectives, and covers 111 reforms and 142 investments.
“Spain will receive an additional €93.5 billion in Recovery Plan funds that will allow us to boost the green and digital transition,” said the acting President of the Government, Pedro Sánchez, after learning of Brussels’ decision. “We are embarking on a new phase of this extraordinary project to reindustrialize and modernize our country’s economy,” he added.
As reported by the Commission, Spain’s REPowerEU chapter consists of a new reform, an extended investment based on three existing measures and seven new investments to meet the objectives of the REPowerEU Plan “to make Europe independent from Russian fossil fuels well before 2030.” These measures focus on diversifying energy sources to become less dependent on fossil fuels, notably by accelerating the deployment of renewables, renewable hydrogen, decarbonization of industry and value chain investment for net zero emission industry.
In addition, the revised recovery and resilience plan provides for 59 measures “that are either new or aimed at making its targets more ambitious,” he continued. The new measures aim to strengthen Spain’s business environment and attract skilled workers, improve the sustainability of the agricultural sector, promote the circular economy and combat desertification, streamline permitting procedures for renewable energy projects, strengthen cybersecurity standards and boost affordable housing. Investments proposed to be made or expanded include new financial instruments to promote investments in the economy, for example, to sustain the green and digital transitions, and the competitiveness of SMEs.
Changes
The changes introduced by Spain to the original plan are based on the need to take into account the following: objective circumstances hindering the fulfillment of certain measures as initially planned, such as the high inflation experienced in 2022 and 2023 and supply chain disruptions caused by Russia’s war of aggression against Ukraine; the request to use €83. 83. billion in available Recovery and Resilience Mechanism (RRM) loans; and the upward revision of its maximum allocation of RRM grants from €69. 5 billion to €77. 2 billion.
To finance the more ambitious objectives of its plan, Spain has also requested to transfer its share of the Brexit Adaptation Reserve to the plan, in line with the REPowerEU Regulation, for an amount of €58 million. These funds, added to Spain’s allocation of MRR and REPowerEU grants (amounting to the aforementioned €77.2 billion and €2.6 billion, respectively) and its request for a loan under the MRR for €83 billion, bring the overall amended plan that has been approved to €163 billion.
The revised plan also allocates 40 percent of the available funds to measures in support of climate change objectives and covers 30 new climate action measures, bringing the total green contribution to EUR 65 billion (compared to EUR 27.6 billion in the original plan).
The Council will now, in principle, have four weeks to approve the Commission’s assessment. The Council’s endorsement will enable Spain to receive EUR 1.4 billion in pre-financing from the REPowerEU funds. Under the RRM, Spain has so far received €37 billion: €9 billion in pre-financing and €28 billion disbursed in total in the first three payments. “The Commission will authorize further disbursements on the basis of satisfactory achievement of the milestones and targets indicated in Spain’s revised recovery and resilience plan, reflecting progress in the implementation of investments and reforms,” the press release concluded.
