In order to finance the strategic investments outlined in the 2025 municipal budget, Torrevieja Council has granted Eurocaja Rural a long-term loan totalling €32,670,566.
The operation has been authorised by the Generalitat Valenciana through the General Directorate of Local Administration, which has verified that the City Council’s net savings are positive and its debt ratio is below the limit of 75% of current income settled in 2024, as per the submitted documentation. The authorisation is granted for the current fiscal year and in compliance with the approval of the Administrative and Technical Clauses.
The operation is expected to last for 12 years, with an initial grace period of two years. According to a statement from the PP government, the withdrawal will be incremental and will be adjusted to meet cash flow requirements during this initial period. Interest will be accrued on the quantities withdrawn exclusively during the grace period.
Four financial institutions submitted seven proposals for the tender:-
- Bilbao Vizcaya Silver Bank SA
- Banco Sabadell SA –
- Caja Rural Central S.C.C. –
- Eurocaja Rural S.C.C.
The proposals comprised fixed-rate offers and variable-rate offers that were referenced to the 12-month Euribor. Eurocaja Rural SCC’s offer was the highest-scoring after the technical and economic evaluation. It had a fixed rate of 2.47%, which is “substantially lower than the maximum permitted by regulations, thereby ensuring the responsible and efficient borrowing of the municipality.”
“Outstanding location”
Domingo Paredes, the Councillor for Economy and Finance, underscored that “the financial sector’s response confirms the exceptional financial status of Torrevieja City Council, which enables us to obtain financing at highly favourable terms.” This loan will enable us to implement an ambitious investment programme without jeopardising our financial stability. The loan will finance the following projects: €5 million for infrastructure replacement and paving, €4.9 million for the redevelopment of adjacent Port areas, €2.3 million for the remodelling of the Eras de la Sal mines, and €2.4 million for the resurfacing and repair of the Levante Breakwater. The Alzheimer’s Centre, with 1.3 million euros, the Los Locos shore promenade project, and the renovation works on the La Plasa building are also included, with a total of 4.5 million euros. The final two investments are the most delayed out of all those that were originally intended. Los Locos promenade is currently undergoing final project certification, and the Alzheimer’s Centre has not yet developed a draft project. The remaining investments are either in the process of being awarded, are currently ongoing, or are currently in the bidding process.
Enhancements to the urban environment
The City Council is investing in the enhancement of the city, the creation of employment, and the stimulation of the local economy, as Paredes underscored. This underscores the importance of responsible management and financial stability in the process of transforming our city. The City Council is utilising this investment loan to finance investments, as it is unable to utilise its cash surpluses as it had in previous years due to the suspension of the Spanish government’s fiscal regulations, which were reintroduced in 2023. In reality, it has the potential to use these surpluses, which are a result of the municipal budget’s failure to be executed, to repay a significant portion of this same loan and the 2025 budget settlement in 2026.
The City Council has been compelled to implement a financial and economic plan in response to the municipality’s recent investments, which have exceeded its actual income for several years. Nevertheless, the balance of its debt with banks is minimal, and it is rebalanced with treasury surpluses that are utilised to settle loan debt and pay suppliers.
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