MADRID, Jan 15 (Reuters) - Spain will create a state-owned sovereign wealth fund to boost sectors including housing and national security, Prime Minister Pedro Sanchez said on Thursday. The fund,
Spain Unveils Sovereign Wealth Fund to Enhance Economic Stimulus
Spain's New Sovereign Wealth Fund
MADRID, Jan 15 (Reuters) - Spain will create a state-owned sovereign wealth fund to boost sectors including housing and national security, Prime Minister Pedro Sanchez said on Thursday.
The fund, named "Spain Grows", aims to extend the economic stimulus of the European Union's NextGenerationEU funds - which played a significant role in the country's recovery from the COVID-19 pandemic - beyond 2026, when they are set to expire.
It will initially draw 10.5 billion euros ($12.2 billion) from EU funds and aims to raise 120 billion euros through private debt, Sanchez said, adding more details would be unveiled next week.
Investment Priorities
The fund will prioritise investments in housing, renewable energy, digitalisation, AI, reindustralisation, infrastructure, water, health, the circular economy and security, Sanchez said.
Funding Sources
"This fund will not only be an exercise in national sovereignty but also proof that there is another way of doing things amid a narrative that questions diversity, equality or the commitment to sustainability," Sanchez said.
He added that the investments would not only benefit large urban centres but also those places which industrialisation had bypassed.
Impact on Recovery Funds
Spain has been one of the main recipients of EU pandemic recovery funds and was allocated about 160 billion euros - roughly half in grants and half in loans.
The country has put out tenders for 86.6 billion euros, assigned 79.8 billion euros and paid out 62.9 billion euros, according to the latest figures from the economy ministry released in mid-December. It has also requested 22.8 billion euros in loans.
It renounced around 66 billion euros in loans in December, a decision it attributed to its strong standing on capital markets enabling it to raise funds independently.
However, European Commission official Daniel Calleja said at an event in Madrid the move was also due to its failure to implement some of the necessary reforms.
($1 = 0.8613 euros)
(Reporting by Victoria Waldersee; Writing by David Latona; Editing by Charlie Devereux)
