The Taiwan Scenario applied to Spain
Now this is different: this is a three-way-exiled-goverment-scenario... thingy
The PoD is set during the Spanish civil war: the socialists and communists get the upper hand and win in the mainland (including northern Morocco), while the royalists flee and re-establish the kingdom in the Balearic Islands. The nationalists end up taking control of the Canary islands and the Spanish Sahara.
update: added Cape Juby and Ifni