- This figure is 40.7% higher than the 2019 figure. This increase was fundamentally caused by the management of the COVID-19 Guarantee Lines.
- The amount mobilised by the COVID-19 Guarantee Lines during the past year (116,571 million euros) represents approximately 40% of the financing granted by the financial system to companies between April and December.
- ICO has strengthened its on-balance sheet corporate financing instruments and made them more flexible to help boost economic recovery and the transition towards a more sustainable and digital production model, which has resulted in an increase of 5% in the financing granted to the self-employed and companies (increasing to 6.8 billion euros).
- This commitment to sustainability was reflected in the financing of operations amounting to over 2,760 million euros and the issuance of 1 billion euros in social and green bonds.
- Similarly, ICO continued to promote complementary financing channels for companies through AXIS in 2020: an endowment of 3 billion euros was approved for the next 5 years, which will permit the mobilisation, in collaboration with private equity funds, of between 6.1 and 8.2 billion euros
- Investments amounting to 531 million euros were approved in 27 funds through Fond-ICO Global. These will allow over 2.1 billion euros to be provided to Spanish companies
- In 2020, ICO passed the European Commission accreditation process to be able to carry out the delegated management of funds within the Multiannual Financial Framework 2021-2027.
In its triple function as a national promotional bank, financial instrument of economic policy and financial agency of the State, in 2020 Instituto de Crédito Oficial (ICO) focused all its efforts on mobilising financing for the business network to mitigate the economic impact created by COVID-19, resulting in the management of 302,534 million euros, the largest volume in ICO' history.
This amount represents an increase of 40.7% compared to 2019, mainly due to the management of the Guarantee Lines launched by the Ministry of Economic Affairs and Digital Transformation, the management of other programmes on behalf of the State and through the promotion of its own financing programmes for the self-employed and companies for their investments in Spain and abroad.
In an exceptional year marked by the COVID-19 health crisis, ICO has had the capacity to manage the measures approved by the Government, primarily the Guarantee Lines, in an unprecedented public-private collaboration scheme. It has simultaneously maintained and increased its usual activity to make all its financing instruments available to the self-employed, SMEs and companies, and has also worked to develop new programmes and equip itself with new capacities.
Of the total credit activity managed, 29.5% corresponds to the amount guaranteed by the State through the COVID-19 Guarantee Lines. Thanks to an unprecedented public-private collaboration scheme, these programmes mobilised 116,571 million euros in financing to the business network as at 31st December. This is approximately 40% of the total financing granted to companies throughout the financial system between April and December.
ICO business financing programmes
In parallel and complementary to the start-up and deployment of the Lines, ICO has strengthened all its on-balance sheet corporate financing instruments and made them more flexible in order to help support economic recovery and the transition towards a more sustainable and digital production model.
The Institute injected 6,799 million euros in financing to the self-employed, SMEs and companies of all sizes and business sectors in 2020 with these programmes, 5% more than in 2019. This volume brings on-balance sheet lending at 31st December 2020 to 21,032 million euros, 3% higher than in 2019.
The 21,032 million euros of ICO's total lending to companies, to which an additional 415 million euros in project guarantees should be added, represented, in terms of stock, 4.5% of the total financing granted by the financial sector to companies with a term of over 1 year in 2020.
ICO has a comprehensive financing offer for the self-employed, SMEs and companies of all sizes and business sectors, aimed at boosting their activity in Spain and in third markets. This catalogue is made up of both the ICO Second-Floor Facilities and the different direct financing programmes and products.
ICO's Second-Floor Facilities have been a reference point in the public-private collaboration model for decades. In this operating scheme, ICO designs the products and provides the funds. Meanwhile, the banks are in charge of marketing the facilities, thus providing the capillarity that characterises these programmes.
In 2020, ICO's Second-Floor Facilities financed operations amounting to 3,348 million euros. These products' activity in the first quarter of 2020 showed great dynamism, however the figures at year-end were below the 4,788 million drawn down in 2019. The onset of the COVID-19 health crisis made it necessary to set up and quickly deploy the Guarantee Lines in order to cover and guarantee the liquidity needs of the self-employed and companies, channelling demand towards these programmes. In any case, it should be noted that the improvements made to ICO's Second-Floor Facilities in 2019 have contributed to mobilising 34% more financing in 2020 than in 2018.
In 2020, ICO promoted direct financing programmes aimed at promoting Spanish companies' large investment projects, both in Spain and in third markets, which has raised the financing granted by 106% compared to 2019, with 3,452 million euros allocated.
The contribution made to strengthen Spanish companies' internationalisation processes must be highlighted, with 2,590 million euros allocated for this purpose - 18% more than in 2019. Of this amount, 1,345 million was distributed through ICO's Second-Floor Facilities and 1,245 through direct financing instruments, an area of activity in which the funds mobilised increased by 87% in 2019.
In addition, ICO continued to expand its product offering and promote complementary sources of financing for companies in 2020. Within this framework of action, it is worth highlighting the implementation of the programme for the purchase of promissory notes on the Alternative Fixed Income Market (MARF) against ICO's balance sheet, independent of, and complementary to the MARF State Guarantee Programme. The programme has made it possible to offer additional liquidity support for companies operating in this market, mostly mid-caps. By the end of 2020, ICO had participated in 122 issues for 26 companies, with an investment/subscription of 627 million euros, which mobilised a total amount of 1,823 million euros.
Risk capital boost through Axis
In 2020, ICO also carried out intense work through AXIS, its venture capital subsidiary. The aim of this work was to promote complementary sources of financing for companies, allowing them to grow more and be more competitive through investment in projects that combine innovation and entrepreneurship, which constitutes a basic pillar for establishing economic recovery and job creation.
Throughout 2020, ICO approved the additional contribution of 3 billion euros for funds managed by AXIS for the next five years that will allow to mobilise investments in public-private collaboration of between 6.1 and 8.1 billion euros. After the approval of this additional endowment, AXIS now manages 5,650 million euros through three funds: Fond-ICO Global, Fond-ICO Pyme and Fond-ICO Infraestructuras II, to which new initiatives will be added that would allow mobilisation of resources in private-public collaboration of between 11.5 and 15.2 million euros with the private equity and venture capital sectors.
In terms of Fond-ICO Global, in 2020, two calls were completed awarding investments for an amount of 531 million euros in 27 funds that will channel over 2.1 billion euros to innovative and technology-based Spanish companies to support the economy's transformation process. Fond-ICO Global plays a leading role as a catalyst for the venture capital sector in Spain, which is why an extension of its endowment by an additional 2.5 billion euros was approved in July.
AXIS's 2020 activity also included the launch of the COVID Entrepreneurial Ecosystem initiative through Fond-ICO Pyme, endowed with 50 million euros and expandable to 100 million, aimed at meeting the liquidity needs of technologically innovative grassroots companies who have difficulty accessing new rounds of financing due to the economic impact caused by the COVID-19 health crisis.
Commitment to sustainability
The activity carried out in 2020 has been key in consolidating the integration of sustainability in the ICO Group's organisation and activity, as reflected in the approval of the Sustainability Policy in the first quarter of the year.
On the asset side, financing operations were approved for an amount of 2,760 million linked to sustainable development projects and plans in all three aspects (environmental, social and governance). These transactions contribute to boosting economic recovery and the ecological and digital transition.
On the liability side, the Social Covid-19 Response Bond carried out in May for an amount of 500 million euros is significant as ICO was the first Spanish issuer to launch a public issue of social bonds aimed at mitigating the effects of COVID-19. The second green bond issued in October, for an amount of 500 million euros is similarly significant. With these two issues, ICO has consolidated its role as one of the leaders in the sustainable bond market at the European level, with an amount of 4,550 million euros issued in 9 transactions (7 social and 2 green).
ICO as channeller of EU funds
In parallel to the rest of its activity, ICO developed a set of additional measures and initiatives with a focus on increasing the channelling of European funds during 2020. As part of this, ICO recently reached a new milestone: obtaining accreditation from the European Commission as an "Implementing Partner" for the management of InvestEU programme funds, which also enables the Institute to fulfil this role in other European Union programmes within the Multiannual Financial Framework 2021-2027.
The InvestEU programme will provide guarantees of more than 26 billion euros, mobilising estimated investments of more than 372 billion euros through public-private partnerships across the EU. These investments will be made in eligible projects in four priority areas of action: sustainable infrastructure; research, innovation and digitisation; SMEs; and social investments and skills.
In addition, since ICO is in an advanced phase of the accreditation process as an Implementing Partner, in 2020 the Institute managed the presentation of Spanish companies' sustainable mobility projects, in collaboration with the Ministry of Transport, Mobility and Urban Agenda, in the Connecting Europe Facility -Transport programme. Under a blending financing scheme, this programme combines grants from the EU budget with bank financing. To date, six of the projects presented by ICO, as an entity accredited by the European Commission, have received a grant of 25 million euros from the European initiative and financing from ICO for an amount of 130 million euros, generating investments in excess of 200 million euros.
ICO's 2021 activity continues to be aimed at all business sectors and aligns with the action framework provided for in the EU's 2021-2027 Multiannual Financial Framework and with the policy levers and guidelines of the Transformation, Recovery and Resilience Plan, including digital transformation, sustainability and the fight against climate change, a just energy transition and support for SMEs and entrepreneurs.