Spain is set to receive a total of $172 billion of European Union pandemic recovery funds after Brussels announced the approval of the country's request for $93.71 billion in relief loans and RePowerEU financing.

Spain had been allocated $73.2 billion in grants, and will receive an additional $8.1 billion after a recalculation, plus another $2.74 billion to offset the energy price shock in the wake of Russia's invasion of Ukraine.

The Commission's clearance of a further $87.4 billion in loans, yet to be confirmed by the European Council, immediately unlocks $1.5 billion in REPowerEU pre-financing and allows it to request a loan disbursement of up to $15.7 billion within 2023, according to the new payment schedule.

Supply chain disruptions

In addition, Brussels has agreed to modify the initial recovery plan presented by Madrid in 2021, accepting as many as 52 changes to the initial draft in the face "objective circumstances".

The most significant change is the cancellation of Spain's commitment to implement a pay-as-you-go system for motorway use as a disincentive for polluting transport. Madrid has now committed instead to boosting rail freight transport.

Brussels also accepted that Spain had been unable to achieve some of its milestones and reforms due to early elections in July and that inflation and supply chain disruptions have altered some targets.

These changes are key for Spain to be able to request the fourth disbursement of the grants, worth a further $10.5 billion within 2023.