Pedro Sanchez has unveiled a massive €23 billion plan to at tackle Spain’s housing crisis by promising to build 15,000 homes a year.
The prime minister said the funding will be channelled through a new state-backed sovereign investment vehicle called ‘España Crece’.
It is designed to bring together public and private capital to boost affordable housing and close what the government describes as the growing housing deficit.
‘We have to build more public and affordable housing. Lack of financing cannot be another bottleneck,’ Sanchez said during the launch, adding that Spain would ‘roll out the red carpet’ to investors ‘to build and not speculate.’
The new fund is intended as a continuation of the transformative investment strategy launched under the EU’s post-pandemic Recovery Plan.
Sanchez said España Crece will focus on three major economic priorities: strengthening social Europe – including housing – deepening capital markets and improving productivity. Housing sits squarely within the social pillar.
He described the financing package as ‘historic’ in scale, combining favourable public funding with private co-investment to confront what he called a full-blown housing crisis.
España Crece will be managed by the Instituto de Credito Oficial (ICO), Spain’s state development bank.
The ICO will receive a €13.3 billion capital injection to reinforce its lending capacity, with €10.5 billion coming from EU Next Generation funds and €2.8 billion from non-repayable transfers.
With this boost, the ICO’s total financing capacity will rise to €60 billion and up to €120 billion when private sector co-investment is included.
The financing will be offered through a range of tools, including loans, capital injections and guarantees.
While affordable rental housing is the flagship focus, the fund will also prioritise strategic sectors such as the green transition and innovative industries like biotechnology – areas seen as key to Spain’s long-term economic competitiveness.
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