The funding will allow the Spanish bank to support local SMEs across different sectors of the country's economy.

The agreement was made possible thanks to the support of the European Fund for Strategic Investment (EFSI), which is a central pillar in the European Commission's Investment Plan for Europe.

“Support for SMEs is one of the EIB's priorities because by funding them we are boosting economic growth, innovation and employment,” said Román Escolano, the vice-president of EIB.

“This agreement with BBVA helps us to reach SMEs across the country, increasing access to crucial long-term financing in order to help them continue to develop new projects and to generate growth.”

This is the first mezzanine guarantee transaction which the EIB and EIF are jointly supporting and will allow BBVA to fund a new portfolio of SME investment projects.

The bank will be offering loans on favourable terms to fund business operations subject to lower interest rates and more comfortable repayment schedules.

“With this agreement, BBVA reaffirms its clear intent to support the Spanish business industry's growth, digitisation and international competitiveness,” said Carlos Torres Vila, CEO of BBVA.

“BBVA is clearly committed to the future of Spanish SMEs, a commitment in line with its 'creating opportunities' motto.”

Pier Luigi Gilibert, chief executive of EIF, felt this represented an important milestone for the EIB Group as it was the first synthetic SME securitisation supported by the group in Spain.

“SME synthetic securitisations are usefully deployed by a number of European banks to provide regulatory capital relief.

“EIF is pleased to be working with BBVA and the EIB and notes with satisfaction that the regulatory capital released will allow BBVA to provide additional access to finance for Spanish SMEs.

“The combination of EIF's investment and structuring expertise and the EIB's efficient deployment of EFSI funds offer a competitive solution for BBVA, which will serve to boost the supply of finance in the real economy.”