Four out of five buildings in Spain consume more energy than they need to. Either they are poorly insulated or they use energy inefficiently. Unión des Créditos Immobiliarios, a specialised mortgage lender from Madrid, wants to change that.
Unión de Créditos Immobiliarios (UCI), which has operations in Spain and Portugal, is expanding loans to homeowners and associations managing buildings for projects that improve energy efficiency. The lender recently created the Residential Energy Rehabilitation programme to renovate and promote the use of renewable energy in least 3 720 residences in Madrid, Barcelona, Valencia and Seville. The works should reduce the total energy consumption of those residences by 50%.
“Our goal is to improve energy efficiency both in Spain and in Portugal, for homeowners and building owners,” says Cátia de Almeida Alves, sustainability and corporate responsibility director at UCI.
In Spain, most people live in apartments. Apartment buildings, in turn, account for about 67% of all buildings. Those apartments consume more energy than they need to, says Manuel Conthe, a loan officer at the European Investment Bank (EIB), which is providing financing for UCI’s energy efficiency loans as well as technical assistance for the residential rehabilitation programme. In Spain, “housing is the third cause of carbon emissions, only exceeded by industry and transport,” Conthe says.
While refurbishing apartments is key for cutting emissions and energy use, few projects receive external funds. “A survey carried out by the Spanish government indicated that only 2.3% of these renovations receive bank financing,” says Isidoro Tapia, a loan officer at the EIB. “So building renovations by homeowners associations is a segment currently underserved by third-party financing.”
UCI is trying to fill that financing gap – with the EIB’s help. UCI, which is a joint-venture between Banco Santander, the BNP Paribas Group and Cie Bancaire, received €2.6 million from the European Local Energy Assistance (ELENA) to set up the Residential Energy Rehabilitation programme. ELENA is an EIB-EU initiative that provides technical assistance for energy efficiency and renewable energy investments in buildings and urban transport.
The technical assistance comes on top of a €100 million loan the EIB signed with UCI in May 2020 to develop mortgages and “green” loans that target building renovations. In May 2021, the EIB invested an additional €50 million in a tranche of mortgage-backed securities containing loans for green renovation projects originated by UCI. The money raised from the sale of the securities enabled UCI to increase its lending for residential energy efficiency refurbishments, including loans to households and to homeowners’ associations overseeing works in buildings like condominiums.