Government Announces €100 Million Fund for Energy Efficiency in Lisbon and Porto Properties
The Portuguese government has officially announced a significant policy initiative aimed at improving energy efficiency in residential buildings, with a focus on the metropolitan areas of Lisbon and Porto. Minister of Environment and Energy, Maria da Graça Carvalho, detailed two new programs, “E-Lar” and “Bairros + Sustentáveis,” during a press conference on Tuesday. These programs, with a combined budget of €100 million primarily from the national Recovery and Resilience Plan (PRR), are designed to support homeowners in upgrading their properties and to combat energy poverty in vulnerable communities. The policy objectives are to accelerate the decarbonization of the housing sector, improve living conditions, and reduce energy costs for citizens.
The “E-Lar” program, allocated €40 million, will begin accepting applications from consumers on September 30, 2025. Its primary goal is to facilitate the replacement of inefficient gas-powered appliances with modern, electric alternatives of energy class 'A' or higher. The program will issue electronic vouchers to households, which can be used to acquire new equipment from a network of registered suppliers. This streamlined process, as Minister Carvalho assured, “is very simple” and aims to avoid the delays and complexities that plagued previous environmental support schemes. The financial support is tiered, with beneficiaries of the Social Electricity Tariff and the “Bairros + Sustentáveis” program eligible for up to €1,683, while other homeowners can receive up to €1,100. The Climate Agency (ApC) will handle payments directly with suppliers.
The second initiative, “Bairros + Sustentáveis” (More Sustainable Neighborhoods), will launch earlier, with its application window open from August 22 to November 30, 2025. With a substantial budget of €60 million, this program targets large-scale energy rehabilitation projects in at least 3,500 homes located in municipal housing, historic zones, and designated urban rehabilitation areas within Lisbon and Porto. Eligible applicants include municipalities, municipal companies, private social solidarity institutions (IPSS), and residents' associations. The program offers up to €15,000 per fraction as a non-refundable grant for a wide array of interventions, including thermal insulation, efficient windows, solar panels, and heat pumps. Acknowledging the tight PRR deadlines, which require project completion by July 2026, the government will allow applications for works that commenced any time after February 20, 2020.
These programs represent a core part of the government's strategy to address energy poverty and meet climate targets. The targeted populations include those on social energy tariffs and residents in areas identified as vulnerable. The implementation strategy relies on a network of approved suppliers for the E-Lar program and empowers local entities and municipalities to lead the charge in the Bairros + Sustentáveis initiative. The government has established a clear timeline, with supplier registration for E-Lar starting on August 18, 2025, followed by the consumer application phases for both programs in the subsequent months. The funding mechanism is backed by €90 million from the PRR and an additional €10 million from the Environmental Fund.
The social and economic impact is expected to be significant, providing not only environmental benefits but also direct financial relief to households through reduced energy bills. The programs are also seen as a tool for urban regeneration in key metropolitan areas. Stakeholder consultation has been part of the process, although some environmental groups, such as Zero, have voiced concerns. While they praise the focus on vulnerable communities, they argue for a more comprehensive national strategy and criticize a recent VAT increase on energy-efficient equipment, which they claim could dilute the positive impact of the subsidies. There has been no significant political opposition to the programs' core objectives.
Minister Carvalho framed these initiatives as a stepping stone towards a larger, EU-wide effort. “This is a first ensaio of the Fundo Social para o Clima (Social Climate Fund), which will be in force in the European Union between 2026 and 2032,” she stated, confirming that Portugal is preparing to leverage its share of the €86 billion fund, estimated at around €1.6 billion. Future policy developments will continue to focus on the energy transition in buildings and transport, with an emphasis on direct support for citizens and small businesses. The current programs will be monitored through inspections and documentation requirements to ensure compliance, with penalties for non-adherence. The application process will be managed through the Environmental Fund's online portal, with additional support available at physical 'energy counters' in various municipal locations. Understand policy impacts on your Portugal property plans at realestate-lisbon.com.
