The NextGenerationEU (“NGEU”) represents the largest package of economic stimulus measures launched by the European Union to boost the recovery of the European economies after the Covid-19 outbreak.
The key instrument of this package is the Recovery and Resilience Facility (“RRF”), which involves 750 billion euros –390 billion in grants and 360 billion in loans– aimed at repairing the immediate economic and social damage brought about by the pandemic, by building a greener, more digital and more resilient Europe. In this context, Spain will receive 69.5 billion euros in grants and up to 70 billion euros in loans from the RRF.
The general framework created by the European institutions has been translated into different national recovery plans, such as the Spanish “Recovery, Transformation and Resilience Recovery Plan” (the “Recovery Plan”), which was approved by the European Council in mid-July.
Spain has already received a 9 billion euros payment in pre-financing (a 13% of the country’s total financial allocation under the RRF) in order to kick-start the implementation of the investment and reform measures set out in the Recovery Plan.
The Recovery Plan traces the roadmap for the modernisation of the Spanish economy, the recovery of economic growth and job creation, for the solid, inclusive, and economic reconstruction after the Covid-19 sanitary crisis, and to respond to challenges of the next decade.
In the Recovery Plan, the Spanish Government envisages the mobilisation of 140 billion euros in public investment until 2026, with a significant concentration of investment and reforms in the first phase of the NGEU package, covering the 2021-2023 period.
The Recovery Plan is structured around four pillars: green transformation, digital transformation, social and territorial cohesion, and gender equality; and it includes measures in a total of ten “lever policies”, with the following breakdown of funds: urban and rural agenda (20.7%), infrastructures (15%), green transition (9.2%), modernisation of the public administration (6.2%), companies’ digitalisation (23.1%), science and innovation (7.1%), education (10.5%), care of people and employment policies (7%), culture and sport (1.2%), and modernisation of the tax system (7%).
This breakdown complies with the European Regulation's minimum requirement that at least 37% should be devoted to environmental protection and 20% to the digital transition.
The Spanish Government has approved a new regulation (the Royal Decree-Law 36/2020) for the implementation of the Recovery Plan, which introduces the necessary regulatory modifications to implement the funds according to the Recovery Plan. In addition, the funds will be regulated by the general regulation governing the procedure by which the funds will be granted, such as the Public Sector Contracts Act and the General Subsidies Act.
The funds from the RRF, according to the Royal Decree-Law, will be distributed under three different lines:
Although the distribution of the funds will be governed by the general regulation, the Royal Decree-Law introduces several flexibilities to the standard operating procedures (e.g. urgent processing or less strict rules on economic and technical solvency in tendering procedures).
In addition, as specified by the Royal Decree-Law and by Regulation 2021/241 in its recital 8, the funds received from the RRF are subject to EU State aid rules. Consequently, Spain is expected to notify to the European Commission the measures that constitute State aid, unless they are covered by one of the rules set out in the State aid block-exemption regulation.
The funds from the RRF are open to all companies, there is no specification by sector or type of activity beyond that determined by the sector's fit with the objectives of the plan. The Royal Decree-Law identifies three public-private partnership instruments for the implementation of the funds:
On this basis, different administrations are already launching calls for tenders, subsidies or participation in a PERTE. The process to access the funds will depend on the instruments used in each occasion and the processing of applications will be carried out through the electronic sites of each competent body.
To this extent, the Spanish Government has created a specific portal to centralise and channel all information on the Recovery Plan for all companies interested in accessing the funds.
Following the calls by public administrations, companies can present projects aimed at meeting the objectives of the Recovery Plan, but only new projects or projects under implementation as of 1 February 2020 will be eligible for funding. To qualify as eligible projects, these must respond to the pillars and lever policies set out in the Recovery Plan, as well as:
Further information on the Spanish Recovery Plan can be found here.
For more information, please contact Candela Sotés.