Next Generation EU, Emergency European recovery instrument

European grants for retrofitting residential buildings and urban regeneration

With the European Next Generation EU funds to help the private and public sector, Spain has a unique opportunity. Economically speaking, it represents a bigger investment from Brussels than all the previous funds that Spain has received since it is a member of the EU.

However, using this funds in the short period of six years given is a great challenge for Spain. The deadline is particularly crucial and for this reason the agile project managements of the whole process of grants until their execution will play a fundamental role.

What are the main characteristics of these European funds for grants?

The Commission has made a financial power of 750,000 million available to its member states for projects from 2021 to 2023 that can be executed and finished by 2026. It is a temporary reinforcement for the EU states members.

Part of the funding from Next Generation will be used to support Spain under established conditions:

  • Grants for Spain ……………..…..72,700 million euros
  • Loans for Spain ….……………….67,300 million euros

Grants and loans will be paid in instalments, for public and private sectors, following the fulfilment of milestone and targets.

The Commission proposes to deploy a reinforced EU budget to help repair the immediate economic and social damage brought by the coronavirus pandemic, kick-start the recovery and for the long term, prepare for a better future for the next generation.

What targets must the projects fulfil to opt to these grants?

Next Generation EU in Spain will be rolled out under four pillars assigned by the EU:

  • Green Spain: ecological transition
  • Digital Spain: Digital transition
  • Spain Without Gender Gaps: Gender Equality
  • Cohesive and inclusive Spain: Social and territorial cohesion

The green pillar takes 40% and the Digital takes 30%. Together, they represent 70% of the total funds. The objective is investing in a green, digital and resilient Europe.

As far as Spain is concerned, the construction sector is going to be the second big beneficiary. On this purpose, an important part of this investment, 6,820 million euros, will be allocated to the Housing Rehabilitation and Urban Regeneration Plan. The main objectives of these grants will be energy efficieny retrofits and the reduction of their embobied emissions.

What are the opportunities about these grants in the construction sector?

In order to achieve the targets set in the EU, it is essential to renovate and retrofit these buildings and to replace nefficient heating/cooling systems based on fossil fuels or direct electric systems. The data indicates a significant opportunity exists for energy efficiency retrofits to residential buildings throughout the EU.

The total investment for Housing Rehabilitation Plan and urban regeneration, will be used for different focus: private houses, housing cooperative, social rental housing, public buildings…

How, when and where can Next Generation EU grants be requested?

The process has already started. The grants applications will be delivered in a multitude of different “offices”.

For this aim, the Ministries, through their agencies or through their regional communities, will announce programs for grants and calls for proposals, which will require agility to know their characteristics and this way find the way to make the projects fit.

How do these funds work?

The funds are European but the instruments will be national or regional. The European Commission mobilise the necessary investments to the member states. Spain directly or with the help of its regional communities will give the instruments for using this funds.

Distribution Key: Demand driven and available to all Member States, it will be focus on those particularly hit by the coronavirus crisis. The regulations will set the intensity of the grant according to the type of project, company size, location of the investment, etc.

How and when can project investments and expenses be executed?

Investments and project expenses can only begin once the grant has been requested. For this porpose, it will be necessary to prepare in advance a rigorous prior information. The project cannot be started when the grant is requested.

What is the risk?

There is a real risk: As an example in the construction sector, once the renovation is finished, if the expected 30% energy saving is not achieved, it would imply the return of the total grant.

For this reason, a control and verification are key points during the process until the completion of the construction works.

For investors, the shift toward sustainable buildings means being diligent about selecting the responsive manager, developer and operator.

In summary, it is a huge opportunity for Spain, with a big investments in such a short time to carry it out. Therefore, it implies the interested of optional beneficiaries to develop strategic projects and agile management for investing in a green, digital and resilient Europe.

It is a hope for a change of the old buildings in Spain to sustainable and energy efficient constructions. Living in safe, healthy, properly ventilated and energy efficient buildings is thus crucial for EU citizens, the economy, and the planet.