Portugal Secures €1.34 Billion EIB Loan for 12,000 Affordable Homes
The Portuguese government has finalized a new credit line of €1.34 billion from the European Investment Bank (EIB) to finance the development of approximately 12,000 affordable housing units across the country. This major funding initiative is aimed at municipalities, which will be able to contract loans from this facility until the year 2030 to increase their stock of affordable rental properties. The total investment for the planned interventions is budgeted at €1.789 billion.
The agreement, which is pending a final signature, represents a key pillar of the government's strategy to address the national housing crisis. According to reports in the newspaper Expresso, this financing serves as a crucial supplement to the country's Recovery and Resilience Plan (RRP). The RRP recently underwent a reprogramming that reduced its target for new affordable housing units from 6,800 to 3,500. The EIB credit line is expected to finance the 3,300 units that were cut from the RRP, in addition to funding other projects identified by local governments.
The program's objectives are to deliver 12,000 homes to the affordable rental market. The strategy to achieve this goal includes a mix of new construction, the renovation and conversion of state-owned properties, and the acquisition of existing properties from private owners. This flexible approach is intended to accelerate the delivery of housing where it is most needed.
This policy is a direct response to the significant housing affordability challenges in Portugal. The government aims to alleviate pressure on the rental market, where rising prices have impacted families and individuals, particularly in major cities. The program is designed to provide long-term housing solutions for thousands of citizens.
In a parallel measure, the government announced it is also negotiating a guarantee facility with the Banco Português de Fomento (BPF), the state's promotional bank. This separate initiative is targeted at providing housing solutions for the 133,000 families identified as living in undignified conditions. The BPF guarantee line will not be a source of direct funding; instead, it will provide public guarantees to cover a portion of the risk for lenders. This is expected to enable municipalities to secure financing from commercial banks under more favorable conditions.
According to government sources cited by the press, approximately 74,000 homes are deemed eligible for this state guarantee provided through the Banco de Fomento. This two-pronged approach, combining direct European financing with national guarantees, forms a comprehensive strategy to increase the supply of public and affordable housing. The long-term goal is to create a more balanced and accessible housing market for all residents.
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