Benidorm to reduce FIE loan for protected Serra Gelada land and approve first €5 million payment

At its next ordinary session, Benidorm City Council’s plenary will debate a budget amendment to allocate €19 million from the 2025 Treasury surplus to the payment for the protected land in the AP7 area of Serra Gelada. This will, in turn, allow the €55 million loan initially planned from the Economic Impulse Fund (FIE) to be reduced to a maximum of €36 million. The city’s mayor, Toni Pérez, announced this on Monday, adding that earlier this morning a mayoral decree ordered the payment of the first €5 million towards the agreement reached with the property owners and ratified by the courts. The agreement establishes that, throughout 2026, the City Council will allocate a total of €60 million to comply with ruling 343/2024 issued by the High Court of Justice of the Valencian Community.

The mayor highlighted that the City Council will cover €24 million of the €60 million from its own resources, while the remainder will be paid through a loan to be arranged with Caixa Ontinyent, authorised by the Ministry of Finance through the FIE. The final amount of €36 million will also be formally approved at the next plenary session. As previously reported, the agreement set the amount to be paid by the City Council at €350 million—€283 million in principal, plus the corresponding statutory interest accrued since 16 July 2018—and proposed two ways of settling the amount: payment in cash and payment in land, with a commitment to make an initial payment of €60 million before 31 December 2026.

Pérez said that these proposals, which will be debated at the next plenary session, are backed by favourable reports from the City Council’s Finance Department. He added that they will allow the council to “comfortably meet the first payment agreed for this year” while also “reducing the interest the City Council will have to pay on the repayment of this loan.” “The City Council’s sound financial position is precisely what now allows us to adapt that initial plan and amend it in the general interest,” he added.

The mayor said: “We said at the time that this was the best municipal government to manage and meet the payment arising from the court ruling, and I reaffirm that today. We are a financially sound council that knows how to manage its finances, which is why the Economic Impulse Fund was the only financing tool available to Benidorm, as this is the route opened by the Ministry for financially sound local authorities such as ours.”

He also recalled that “there were two red lines when it came to reaching any agreement to address this matter: not raising local taxes and not cutting or ceasing to provide services to our citizens. And we are fulfilling what, for us, was a clear roadmap, because this year alone, in 2026—and you have ample evidence of this—we are already seeing that municipal services are not only holding up, but expanding, and that Benidorm is now providing more and better services than it was at this time last year.”

Toni Pérez concluded by stating that the local government, together with its technical staff, “continues to work every day on all aspects of the agreement, including the planning and development side,” which relates to the transfer of land agreed by the parties.

 
Terms of the agreement
As previously reported following its approval and ratification by the courts last March, in addition to the initial €60 million payment in 2026, the agreement provides for a principal repayment grace period until 31 December 2030. During this period, the City Council may choose to repay part of the principal, although annual statutory interest will continue to accrue on the outstanding principal balance, without prejudice to the grace period established in the terms of the agreement.

From 1 January 2031, the City Council will enter a mandatory repayment period, under which it will undertake to repay the principal of the debt annually, together with the applicable interest. It will make annual payments to the property owners, until the debt is fully settled, of an amount that may not be less than 8% of the ordinary current revenues forecast in the municipal budget’s income statement for each financial year.

Concerning payment through the transfer of land, the agreement also provides for two forms of settlement in kind. The first is intended to cover the interest accrued up to the date on which the agreement was signed and will be subject to mandatory acceptance and acquisition by the property owners. In other words, the proposal is for the City Council to settle an amount of €67,386,655.89 over five years through the transfer of land with development rights that can be directly exercised on urban land classified as a building plot, immediately suitable for development and free of any urbanisation obligations.

The agreement also provides for the possibility of successive settlements in kind aimed at reducing the debt (principal plus interest accruing after 1 January 2027) through the agreed transfer of municipally owned land. In this case, unlike the previous proposal, acceptance by the property owners will not be mandatory.