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In renewed push, Spain to tender EU funds for EVs, batteries in July

By Joan Faus

BARCELONA (Reuters) - Spain plans to launch two tenders simultaneously around July to pick the recipients of 2 billion euros ($2.16 billion) of EU funds for electric vehicle (EV) and battery production it had failed to allocate last year, a senior government official said.

Jose Maria Lopez, the commissioner in charge of the aid programme known as PERTE, told Reuters on Monday the final calendar should be agreed on this week but the government's intention was to launch the dual tender after listening to the sector's demands.

That represents an accelerated, broader push after the government said earlier it was planning to launch two separate tenders, one in June for battery cell makers and another in September for EV production.

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Volkswagen has already said it will submit a new request for European Union pandemic relief funds in Spain as it weighs up whether to produce additional EVs there, while other carmakers, such as Renault and Ford, are also considering applying.

Several potential battery cell plants projects also hinge on the PERTE funds.

India's Tata Group is considering setting up a plant in Spain or Britain, and Slovakian battery manufacturer InoBat is also looking at opportunities for a plant in Spain.

Most of the funds should be allocated by November with a view to start manufacturing by 2028 at the latest.

Lopez said less stringent requirements compared to the original PERTE, which only allocated 27% of its 2.9 billion euro ($3.12 billion) budget last year, made him confident all the remaining funds would be used.

All bids will be individual and the selection criteria will be simpler following last year's fiasco that also led to the sacking of an official and the appointment of a commissioner.

Lopez said the initial PERTE had "many restrictions", such as the need to submit a joint bid of large and smaller companies as well as a short timeline to use the funds, while the revamped programme is more flexible after the European Commission allowed Spain to be less rigid in allocating state aid.

Under the new programme, which includes grants and loans as with the initial PERTE, recipients will have 40 or 60 months to bring their manufacturing operations onstream.

Some projects would not be finalised until the end of 2028 after the European Commission eased the initial requirement that all pandemic relief funds be invested by 2026, Lopez said.

Financing will be limited to a maximum of 350 million euros for battery projects depending on location, while there will be no limits for EV projects, he added. Companies that received money from the first PERTE will have to submit new projects.

($1 = 0.9281 euros)

(Reporting by Joan Faus, editing by Andrei Khalip and Ed Osmond)