Spain Sets $11.5 Billion Fund for Flood Relief Amid $20 Billion Loan Exposure

The Spanish government has introduced an $11.5 billion relief package to support recovery efforts following the catastrophic flooding in the eastern Valencia region, which resulted in over 200 fatalities and massive property losses. Announced by Prime Minister Pedro Sanchez, the package will deliver direct aid to households, businesses, and self-employed individuals affected by the floods. Additionally, it will provide government-backed credit guarantees and substantial funding for local governments to cover emergency costs and contribute to urban reconstruction.

This package represents Spain’s initial financial response to what is now one of the country’s most severe natural disasters. Valencia regional president Carlos Mazon has requested an estimated â,,31.4 billion in aid, highlighting the extensive damages across 75 municipalities in Valencia alone. Beyond fatalities, the floods left entire neighborhoods buried in mud and damaged an estimated 100,000 vehicles.

Approximately 15,000 troops are aiding in relief efforts as Spain mobilizes its largest peacetime deployment of military resources to assist impacted areas. Private donors have also stepped in, with Spanish businessman Amancio Ortega pledging â,,100 million to flood victims. Banks with exposure to Valencia’s mortgages and loans stand to face substantial impacts, though the central bank described the event as non-systemic.

The announced package includes â,,838 million in direct aid and â,,5 billion in credit loans, as well as covering full emergency response costs for affected municipalities and subsidizing half of urban rebuilding expenses. This relief initiative underscores Spain’s commitment to mitigating financial and infrastructural damages as cleanup and restoration proceed.