Documentation needed for the investment in Urban Development Projects (Spain & Madrid Region)

Type: Guidelines

Author(s): Carmen de Pablos-Heredero, Miguel Blanco-Callejo

Date: 11/10/2024

Target Audience: Policymakers, Professionals, Academics

Objectives of the article/post

• Present the documentation needed for the investment in Urban Development Projects in Spain
• Special Focus on the documentation related to Climate Smart Urban Development – Environmental Impact Assessment

Content Summary:

For investment in Urban Development Projects in Spain, any investor needs to gather several key documents and comply with Spanish Legal requirements that are based on National and European Union regulations. Regarding the Environmental Impact Assessment is governed by both national and EU regulations. The main legislation includes the Spanish Environmental Assessment Law and the EU Directive on Environmental Impact Assessment. This legislation ensures that any project likely to have significant environmental effects – such as any Investment in Urban Development – undergoes an Environmental Impact Assessment before planning permission is granted.

Key Takeaways:

• General overview of the key documents needed for investing in Urban development projects in Spain
• Present and Outline a basic Step by step guide
• Scope of the Environmental Impact Assessment of Urban Development Projects

Impact on the target audience

Provide a basic guideline with the documentation needed for invest in Urban Development project in a European Union member. This document along with the basic guidelines from other European Union member states can provide a good orientation for the development of Western Balkan countries legislation taking into consideration the Environmental Assessment to promote Climate Smart Urban Development.

Attachments:

[Link to the full e-learning module, case study, video tutorial, White paper, research activity, policy document, environmental study, guidelines etc.]

Documentation needed for investment in Urban Development Projects

An investor considering an urban development project in Spain have to take into account some essential steps which include to prepare a set of documents:

1. Project Proposal: A highly detailed project proposal outlining Urban Development project’s
   1. Scope
   2. Objectives
   3. Expected Outcomes
2. Feasibility Study including
   1. Market Analysis
   2. Financial Projection
   3. Risk Assessment
3. Environmental Impact Assessment: Required for project that might affect the environment detailing
   1. Potential Impacts
   2. Mitigation Strategies
4. Building Permits and Licenses provided by Local Authorities
5. Funding and Financial Documentation
   1. Bank Statements
   2. Investment Agreements
   3. Financial Plans
6. Legal and Compliance Documents that ensure compliance with regulatory requirements at local, regional and national regulations, including zoning laws and urban planning regulations
7. Partnership Agreements (in case the investor is collaborating with other entities)
   1. Formal Agreements
   2. Outlining roles
   3. Responsibilities and Contributions

Environmental Impact Assessment

The Environmental Impact Assessment (EA) process is governed in Spain by both the national and EU regulations. These process aims to achieve three basic benefits: First, to promote a sustainable development; Second, to reduce the risk of environmental damage and Third, to enhance public trust in the decision-making process.

There are some relevant aspects concerning the EIA in Spain.

1. Legal Framework: The main legislation includes the Spanish Environmental Assessment Law and the EU Directive on Environmental Impact Assessment.
2. Law 21/2013 of 9 December on Environmental Assesssment (Spain)

This law requires projects that may have significant effects on the environment to undergo environmental impact assessments. The law promotes sustainable development and environmental protection by: integrating environmental aspects in the planning and approval of programs and projects; analysing and selecting alternatives that are environmentally viable; establishing measures to prevent, mitigate, and if appropriate, compensate for adverse effects to the environment; and by establishing surveillance, monitoring, and compliance measures. This law applies to several industry sectors, including the extractive industry and the energy industry (e.g. crude oil refineries or oil and gas pipelines with a diameter of more than 800 mm and length over 40 km).

The environmental impact assessment is based on a series of the principles for protection and improvement of the environment, including preventive action, mitigation of environmental impacts, public participation, integration of environmental aspects in decision-making, and action according to the best available scientific knowledge. Project proponents must submit a request to the environment authority for environmental assessments. The environment body will then carry out, within three months, a technical analysis of the request, considering significant environmental impacts of the project, including any contributions to climate change.

It is the responsibility of the competent authority to monitor compliance with the environmental impact statement or report. These documents may require monitoring reports that review planned mitigation measures, activity data or environmental conditions.

1. EU Directive on Environmental Impact Assessment

Under the EU’s Environmental Impact Assessment (EIA)Directive (2011/92/EU as amended by 2014/52/EU), major building or development projects in the EU must first be assessed for their impact on the environment. This is done before the project can start.
An EIA is required for the various projects such as: nuclear power stations, long-distance railways, motorways, express roads, waste disposal installations for hazardous waste and dams of a certain capacity

For other projects, including urban or industrial development projects, roads, tourism development and canalisation and flood relief works, it is up to individual EU Member States to decide if there will be an EIA on a case-by-case basis or by setting specific criteria (such as the location, size or type of project).

The EIA assesses the direct and indirect significant impact of a project based on a wide range of environmental factors, including

• Population and human health
• Biodiversity
• Land
• Soil
• Water
• Air
• Climate
• Landscape
• Material Assets
• Cultural Heritage

The project developer must provide the approval authority with a report containing the following information

• Description of the project (location, design, size)
• Potential significant effects
• Reasonable alternatives
• Features of the project and/or measures to avoid, prevent, reduce or offset likely significant impacts on the environment

There are also strict rules about how the public is informed of the project and the fact that it is subject to an EIA procedure and how those affected can participate in the decision-making process. The public is also informed of the decision afterwards and can then challenge before the courts.

3. Scope of the EIA: The EIA’s objective is to identify, describe and evaluate in detail the direct and indirect effects of a project, in this particular an Urban Development Project on various factors including:
   1. Human Beings, Fauna and Flora
   2. Land, water, air, climate and landscape
   3. Material Assets and Cultural Heritage
4. Development of the EIA: These are the stages on the process of developing an EIA
   1. Screening: Determines if a project requires a Full EIA. Between the projects that require a Full EIA are
      1. Large-scale urban development projects, including new residential areas, commercial centers and insustrail zones
      2. Projects involving significant land use changes

The need for a full EIA is determined based on specific criteria including:

1. Size: Large projects with extensive physical footprints
2. Location: Project in or near sensitive areas

• Nature: Projects that involve potentially hazardous activities or significant resource extraction

1. Scoping: Identifies the key environmental issues & factors to be considered
2. Impact Analysis: Assesses the potential environmental impacts
3. Mitigation Measures: Proposes actions to prevent, reduce or offset the adverse impacts
4. Public Participation involves the public and stakeholders in the decision making process ensuring transparency, and that the concerns of affected communities and stakeholders are considered and taken into account
5. Reporting: Compiles the findings into an Environmental Impact Statement (EIS). Find below a basic outline of the sections and content of an EIS for an Urban Development Project in Spain

 

1. Project Title: Urban Development of the New Residential Area in Madrid
   1. Introduction
      1. Purpose: To evaluate the environmental impacts of developing a new residential area in the outskirts of Madrid.
   2. Proponent: Madrid City Council.
2. Project Description
   1. Location: The project site is located in the northern suburbs of Madrid, covering an area of 100 hectares.
   2. Components: The development includes residential buildings, parks, schools, and commercial areas.

• Environmental Baseline
  1. Air Quality: Current air quality is generally good, but there are concerns about potential increases in pollution due to construction activities.
  2. Water Resources: The area includes several small streams that could be affected by construction runoff.
  3. Biodiversity: The site is home to various plant and animal species, including some protected species.

1. Impact Assessment
   1. Air Quality: Potential increase in dust and emissions during construction. Mitigation measures include dust suppression techniques and the use of low-emission machinery.
   2. Water Resources: Risk of contamination from construction runoff. Mitigation includes sediment control measures and proper waste management.
   3. Biodiversity: Potential habitat disruption for local species. Mitigation includes creating green corridors and timing construction to avoid breeding seasons.
2. Mitigation Measures
   1. Air Quality: Regular monitoring and use of air filters on construction machinery.
   2. Water Resources: Installation of silt fences and regular water quality testing.
   3. Biodiversity: Relocation of affected species and habitat restoration post-construction.
3. Public Consultation
   1. Meetings: Public meetings held in affected communities to gather input and address concerns.
   2. Feedback: Incorporation of public feedback into the final project design.

• Conclusion

Summary: The project is expected to have some environmental impacts, but with proper mitigation measures, these can be minimized. The benefits of providing new housing and amenities outweigh the potential negative effects.

1. Review and Decision: Authorities review the EIS and make a decision on the project
2. Monitoring: Ensures that mitigation measures are implemented and effective

For more detailed information these two reports can be consulted

1. Environmental Profile of Spain Environmental Profile of Spain 2019
2. Environmental Implementation Review 2022 Environmental Implementation Review 2022

Documentation needed for Urban Development & Relevant Climate Smart Urban Development Initiatives: The Madrid Region Case

The document used Madrid Region as a benchmark due to the fact that it is one of the most relevant regions in Spain in terms of investment in urban development projects. In the following links the importance of investments in urban development projects in the Region can be evidenced:

Madrid 2050’s Platform

Madrid 2050  https://spain.climate-kic.org/en/news/madrid-on-the-path-to-climate-neutrality/ is a permanent platform to design a sustainable urban development of the region and the capital city Madrid has set an ambitious goal to achieve climate neutrality by 2050 through a comprehensive roadmap that integrates climate action into municipal policies. This initiative, aims to significantly reduce greenhouse gas emissions, improve quality of life, and enhance resilience to climate risks.

Key components of this plan include:

• Reducing GreenHouse gases (GHG) Emissions: Targeting major sectors like residential, services and transport to achieve substantial emission reductions.
• Urban Transformation: Implementing innovative processes and collaboration mechanisms to align with European and national policies.
• Sustainable Measures: Developing an urban forest, prioritizing cycling and public transportation, and investing in greener energy sources.

This initiative is part of a broader effort under the Spanish Urban Agenda, which involves over 120 cities and towns in Spain working towards sustainable, inclusive, and resilient urban development: https://unhabitat.org/news/28-apr-2022/five-regions-and-more-than-120-cities-in-spain-implement-the-new-urban-agenda.

The Madrid 2050 platform will focus on four main axes:

• Housing
• Mobility
• Infrastructure
• Public and endowment space
• Regeneration and rehabilitation.

Its objective is to become a meeting and cooperation space to address and solve the challenges of new urban developments. It also aims to respond efficiently and in line with the general interest, expectations and rights of citizens.

Promotion of Sustainable Green Investments – Sustainable bonds

The Community of Madrid is a pioneer in the issuance of sustainable bonds: https://www.comunidad.madrid/en/inversion/relacion-inversores/financiacion-sostenible-verde

The Community of Madrid was the first Spanish public administration to request financing from the bond market to specifically finance social projects. This demonstrates the great concern of the Community of Madrid for aspects that are not strictly financial, such as climate change and social development.

In this area, the so-called Social Bonds, or debt directly linked to social development, have arisen. On the other hand, we find Green Bonds, which are a similar type of fixed-income financial product linked to financing projects with environmentally sustainable benefits. A combination of social and environmentally sustainable objectives has also materialized, called Sustainable Bonds.

In February 2024, the Community of Madrid successfully placed a new sustainable bond with a term of 10 years and a volume of 1,000 million euros1. This bond issuance aligns with the Sustainable Development Goals set by the UN and follows the principles established by the International Capital Market Association (ICMA).

DUS 5000 Program

The objective of the DUS 5000 PROGRAM is to promote Sustainable Urban Development in municipalities with demographic challenges, through actions that constitute unique clean energy projects such as energy efficiency projects in public buildings and infrastructure, promoting green investments and, in particular, self-consumption, as well as sustainable mobility, facilitating modal shift and ensuring the participation of municipalities in the deployment of recharging infrastructure and promoting electric vehicles, including energy saving measures and reducing light pollution by improving public lighting.

The DUS 5000 Program is an initiative aimed at promoting sustainable urban development in small municipalities facing demographic challenges in Spain. This program is part of the broader Recovery, Transformation, and Resilience Plan, funded by the European Union’s NextGenerationEU1.

Key Features of the DUS 5000 Program:

Objective: To support unique local projects focused on clean energy in municipalities with demographic challenges.

Funding: The program has a budget of 675 million euros.

Projects: It includes projects related to energy efficiency in public buildings and infrastructure, promotion of green investments, self-consumption, sustainable mobility, and reduction of light pollution through improved public lighting.

Eligibility: Targeted at municipalities that meet specific demographic criteria.

For more detailed information, you can visit the IDAE’s official page on the DUS 5000 Program.

DUS 5000 Program: https://www.idae.es/en/support-and-funding/programa-dus-5000-ayudas-para-inversiones-proyectos-singulares-locales-de

Documentation needed for Approval of Planning Instrument in Madrid Region

Next link provides detailed information of the documentation needed for the Approval of Planning Instruments in the Region of Madrid: Approval of planning instruments | Madrid’s community (comunidad.madrid)

It is relevant to note that in the list of Documents to submit, environmental issues are key and mandatory (pay attention to points 8 and 9):

Documents provided with the application:

1. Numbered index (include document, file, CSV, etc.)
2. Initial Approval Certificate
3. Executive Summary
4. Proof of publication in the press and in the Official Gazette of the Initial Approval Agreement
5. Municipal reports, legal and technical content
6. Certificate of submission to public information and allegations (reports and resolutions produced)
7. Mandatory or necessary reports
8. Environmental document
9. Environmental analysis report (Art. 57 d) LSCM)
10. Provisional Approval Certificate
11. Complete technical document (filled out). Pdf format. It is recommended to follow the document Minimum technical documentation recommendations available at https://www.comunidad.madrid/transparencia/normativa/recomendaciones-do…
12. Vector documentation.
13. Annex reports regulatory impact.
14. Consolidated Planning Document (art. 67.3 Law 9/2001, of July 17, on Land of the Community of Madrid)
15. Others.

Special attention must be paid to the Law 9/2001, of July 17, 2001, of the Land of the Community of Madrid: https://gestiona.comunidad.madrid/wleg_pub/secure/normativas/contenidoNormativa.jsf?opcion=VerHtml&nmnorma=520&eli=true#no-back-button

Article 57 establishes the procedure for the approval of Urban Development Projects

Concretely, article 57 d. requires of an environmental impact analysis that must be approved by a committee of experts in urban environmental issues.

The procedure for approval of the General Plans and their modifications and revisions shall be carried out in accordance with the following rules:

1. a) The procedure shall be initiated by means of an agreement of initial approval adopted by the Plenary of the Town Council, ex officio and on its own initiative or by virtue of a motion deduced by any other territorial public Administration. The agreement of initial approval will have to express the adequacy or not of the documentation of the Plan to the previously approved advance, indicating, in its case and with precision, the introduced variations.
2. b) The initial approval shall imply the submission of the documentation of the General Plan to public information for a period of not less than one month and, simultaneously, the requirement of the reports of the public bodies and entities provided for by law as mandatory or which, by reason of the possible impact on the public interests managed by them, must be considered necessary. The public information must be carried out in the manner and under the conditions that favor a greater effective participation of the holders of affected rights and of the citizens in general. The reports shall be issued within the same period as the public information.
3. c) In view of the result of the procedures foreseen in the previous letter, the Plenary of the Town Council will decide on the appropriateness of introducing the pertinent corrections in the document. If such corrections entail substantive changes in the zoning, the new document shall again be submitted to the public information and reporting procedures, as regulated in the preceding paragraph.
4. d) Once the above procedures have been completed, the Plenary of the City Council will send the technical document of the General Plan to the competent Council on environmental matters, so that it may issue the definitive environmental analysis report within a period of two months.