Spain’s recovery and resilience plan

Written By

candela sotes module
Candela Sotes

Senior Associate
Spain

I am an associate in Bird & Bird's Competition & EU law department in the Madrid office.

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.

Outline of Spanish 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.

Practical aspects

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.

3.1 Tools for the distribution of the funds

The funds from the RRF, according to the Royal Decree-Law, will be distributed under three different lines:

  • Strategic Projects for Economic Recovery and Transformation (known as “PERTES”, in Spanish), which constitute a new public-private partnership instrument that identifies projects of a strategic nature, with a significant potential for the rest of the Spanish economy. They require the collaboration between administrations, companies and research centres and are subject to a very specific criteria (e.g. combining knowledge, experience and financial resources to remedy important market failures and presenting an innovative character in terms of R&D).
  • Grants, for the financing of private assets, through competitive calls for proposal. They require public-private financing.
  • Contracts, for the financing of public assets, through call for tenders. Financing can be 100% public or public-private (concessions).

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.

3.2 How to access the funds?

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:

  • Economic clusters, which must be formed before the application.
  • Consortia, which must have a prior favourable report of the Technical Committee related to one specific project.
  • Mixed-economy companies formed by a majority of public capital.

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:

  • Strengthen the competitiveness of the Spanish economy in the international scene;
  • Create stable and quality employment;
  • Encourage the creation of participative ecosystems involving large companies and SMEs, public administrations, universities, and the civil society;
  • Be viable and have a justified budget; and
  • Clearly establish its goals, milestones and impacts, developing indicators to assess the progress of the project and its scope.

Further information on the Spanish Recovery Plan can be found here.

For more information, please contact Candela Sotés.

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