Request for funds

Spanish Urban Development SICC

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Spanish Urban Development

Arcano Capital SGIIC, and in particular its public funds division manages a regulated vehicle set up to invest an amount of €210M in financially viable projects and companies in the fields of urban development, social and affordable housing and sustainable tourism.

Source of funds

The funds to be invested come from the National Recovery and Resilience Plan ("NRRP") under the Recovery and Resilience Mechanism (RRM), which has delegated the management of its investment to the European Investment Bank (EIB). The EIB, in turn, has selected Arcano Capital as the manager for the investment of these funds.

Investment period

  • Senior Debt/Participating and similar: until August 31, 2026 (100% disbursed)
  • Equity: until December 31, 2030

    • Co-investment

    Co-investment of 1% of Arcano Capital SGIIC in each project of the portfolio.

    Investment strategy

    Investment forms and characteristics

    EQUITY

    Participation in equity

    Up to 15 years

    Up to 22 M

    (max. 49% equity capital from public funds; max. 70% eligible cost)

    DEBT

    Participating / convertible loans

    Up to 15 years

    Up to 22 M

    (max. 70% of eligible cost)

    Loans and leasing

    Up to 20 years

    Up to 22 M

    (max. 70% of eligible cost)

    • At least 30% of the eligible cost (not covered by SUD) must be covered by new funds with equal or lower ranking than the funds provided by SUD. European State Aid regulations will always be complied with.
    • Possible combination of capital layers: equity + shareholders' equity (provided that, in aggregate, it does not exceed 49% of the total amount of equity and participating loans); or equity + senior debt.

    Target Investment Areas

    Urban Development

  • Restoration, construction and renovation of social or affordable housing for rent. Includes co-living and co-housing. Interventions in housing that is not social or affordable will not be subsidized.
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    Affordable Housing

  • Restoration, construction and renovation of social or affordable housing for rent.
    •    
  • Includes coliving y cohousing.
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  • Interventions in housing that is not social or affordable will not be subsidized.
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    Sustainable Tourism

  • Transformative actions in tourism focused on green and digital transition, competitiveness, business digitization, restoration of historical heritage, and improvement of retail areas.
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    Investment strategy

    Beneficial Ownership (BF) Eligibility

    • SMES
    • Small Mid-Caps (less than 500 workers)
    • Mid-Caps (menos de 3,000 trabajadores).
    • Infrastructure projects (development of long-term physical assets).
    • According to Article 107(1) TFEU.
    • To be assessed by Arcano Capital; not to be "in difficulty" according to EU Regulation 651/2014.
    • Cannot be in bankruptcy or equivalent proceedings and does not meet the criteria for such according to national law.
    • Registered with the Spanish Tax Authorities (AEAT) and in compliance with Spanish tax/accounting laws.
    Excluded Activities:
    • No substantial focus on activities listed in Annex (evaluated by the Financial Intermediary).
    • Certificate of compliance with the Public Treasury and Social Security required.
    • (EU and national). DNSH compliance and climate tagging report elaboration.
    • funds may not be used for the purchase of shares in a company or for refinancing.
    • Funds from other European programs cannot be received to finance the same cost and compatibility with other European funding programs will be analyzed.

    Investment strategy

    LDS investment process

    Technically and financially viable projects 

    1.

    Preliminary information

    Information on the project or company is received from the shareholders or promoters. This includes a teaser/corporate presentation; annual accounts; business plan with projections; estimated investment/budget and information on other public funds requested by the project/company. Preliminary eligibility analysis

    2.

    Request for funds and analysis of the operation

    Formalization of the request for funds. Arcano's management team is responsible for analyzing the information, ensuring compatibility of funds, co-investment, preparing a financial model to confirm financial viability, analyzing the capacity of the promoters/shareholders and their industry experience and financial capacity. Negotiation and agreement of key terms.

    3.

    Investment Committee

    If management team believes that this is a valid transaction and has received a complete documentation package to request approval from Arcano Investment Committee, a presentation is prepared with the opportunity analysis, including eligibility analysis, cash flows and expected returns.

    4.

    Due Diligence Phase

    If approved by Investment Committee, external advisors are hired to perform due diligences (legal, technical, business and insurance).

    5.

    Closing of the operation

    In parallel to the due diligence process, the drafting phase of the transaction documents begins. If the due diligence phase is completed satisfactorily and there are no red flags in the DDs phase, transaction is signed.

    The process from application to closing takes

    between 7 and 9 weeks.

    Management team

    The Public Funds team will also be supported by different areas in Arcano, by teams with an extensive knowledge, understanding and network in the target investment areas.

    Meet us