Government Announces €1.34 Billion EIB Credit Line for 12,000 Affordable Homes
The Portuguese Government will sign a credit line agreement with the European Investment Bank (EIB) for more than €1.3 billion to develop affordable housing, Prime Minister Luís Montenegro announced. The funding is intended to provide a “new impetus to housing” and represents what the Prime Minister called “the largest investment ever in the area of housing” by the government.
The project aims to finance the construction and renovation of approximately 12,000 affordable housing units in Portugal. According to the EIB, the proposed financing amounts to €1.34 billion, with the total project cost estimated at €1.789 billion. The initiative is part of the 'Programa de Arrendamento Acessível' (PAA), a national public program designed to create a long-term stock of rental housing with prices below current market rates.
The government's goal with this program is to address the housing needs of families whose income levels prevent them from accessing housing at market prices. The EIB's board of directors officially approved the project on June 10 of this year.
In addition to the EIB financing, the Prime Minister also announced that the Banco Português de Fomento (BPF), Portugal's promotional bank, will make a guarantee line available to finance 133,000 public housing units that are part of various municipal housing strategies. “We want the Banco Português de Fomento to be the partner for the financing of all operations that will make more houses available for people and families to rent and more houses to buy, and at affordable prices,” Mr. Montenegro stated.
To manage this new focus, the BPF will establish a dedicated Housing Directorate, to be led by its current Chief Investment Officer, Teresa Fiúza. Ms. Fiúza said the new directorate's mission is to “boost sustainable and affordable housing investment” by developing financial solutions with a direct impact on living conditions and the national housing challenge, engaging with both public and private sectors. Understand policy impacts on your Portugal property plans at realestate-lisbon.com.
