Portugal and the EIB approve €1.34 billion framework loan for affordable housing

This article is published in association with European Investment Bank.

• The European Investment Bank (EIB) has approved a €1.34 billion framework loan to support the construction and renovation of around 12,000 affordable housing units in Portugal.
• Today the Republic of Portugal and the EIB have signed the first €450 million tranche of the total approved financing.
• The agreement contributes to address housing needs in the country while promoting social inclusion, territorial cohesion and environmental sustainability throughout Portugal.

The Republic of Portugal and the European Investment Bank (EIB) have signed the first €450 million tranche of a landmark €1.34 billion framework loan approved by the EIB to co-finance the investment programme in affordable public housing in Portugal. This strategic agreement marks a major step forward in addressing Portugal’s housing challenges while promoting social inclusion, territorial cohesion, and environmental sustainability.

The total EIB´s approved framework loan will support the construction and renovation of approximately 12,000 affordable rental housing units across the country, helping to establish a long-term housing stock  with rents below market prices.

Investments will be aligned with energy efficiency and climate resilience criteria, ensuring that the new and refurbished housing stock supports Portugal and the EU environmental goals.

The signing ceremony for the first €450 million tranche took place today at the official residence of the Prime Minister of Portugal in the Palácio de São Bento, Lisbon.

“Providing a solution to housing challenges is an absolute priority for this Government, which counts on the EIB as a key partner in this area that is so important for the country. With this €1.34 billion in financing, we have another tool at our disposal for public housing in Portugal. This means approximately 12,000 more affordable homes, at below market prices, which we want to make available to families in our country as quickly as possible,” says Miguel Pinto Luz, Minister for Infrastructure and Housing.

The Minister of State and Finance, Joaquim Miranda Sarmento, points out that “Today a very important step has been taken in financing the construction and renovation of public housing in Portugal, to which the Government has been committed since the beginning of its term, with the support of entities such as the European Investment Bank (EIB), which play a vital role in this process. I would also like to commend the extraordinary role that the EIB has played in Portugal’s development over the last 40 years, financing and supporting hundreds of public and private projects.”

Ioannis Tsakiris, Vice President of the EIB added: “At the European Investment Bank, we believe that everyone should have access to a safe, sustainable, and affordable home. Affordable housing is essential not only for social cohesion but also for economic competitiveness, climate resilience, and sustainable urban development. With this new financing agreement, we are strengthening our strategic partnership with the Government of Portugal to deliver thousands of homes, to expand access to affordable housing, and Portugal´s efforts to build a more inclusive economy, promote balanced territorial development and contribute to climate action through energy-efficient living.”

The project contributes to foster socio-economic and territorial cohesion and support climate action, which are two of the EIB Group’s strategic priorities and cross-cutting policy goals set out in its Strategic Roadmap for the years 2024-2027.

The project will also benefit from funding under Portugal’s Recovery and Resilience Plan (RRF). Combined EU/RRF and EIB contributions will cover approximately 90% of the total investment cost, with EIB financing accounting for 75%.

About Portugal´s National Affordable Housing Programme

Portugal’s national programme for the promotion of affordable public housing represents a €1.8 billion public investment through 2030. It is a cornerstone of the government’s strategy to support families whose income prevents access to market-rate rentals. The programme is co-financed by the EIB and implemented by IHRU (Instituto da Habitação e da Reabilitação Urbana), a public entity under the Portuguese State administration responsible for national housing policy.

About the EIB commitment to strengthening Europe’s housing sector 

The EIB Group is working closely with the European Commission, national governments, cities, and promotional banks to strengthening Europe’s housing sector by providing the finance and expertise needed to build more innovative, energy efficient and affordable homes. The EIB Group builds its affordable housing approach on three core priorities: support for innovative and sustainable housing construction techniques, renovation of Europe`s aging housing stock and building of new affordable housing.

To accelerate progress, the EIB Group has launched a Housing Action Plan aimed at increasing financing, end-to-end support, and faster market solutions. To make it easier for local authorities, developers, and communities to access support, the Group has created the “More homes. Better homes” online portal, connecting housing stakeholders with the advice, funding, and financing they need.

For a comprehensive view of the EIB Group initiatives to support affordable housing in Europe visit More homes. Better homes.

Background information  

EIB

The European Investment Bank (ElB) is the long-term lending institution of the European Union, owned by its Member States. The EIB finances investments in eight core priorities that support EU policy objectives: climate action and the environment, digitalisation and technological innovation, security and defence, cohesion, agriculture and the bioeconomy, social infrastructure, a stronger Europe in a more peaceful and prosperous world and Europe’s capital markets union.   

The EIB Group, which also includes the European Investment Fund (EIF), signed nearly €89 billion in new financing for over 900 high-impact projects in 2024, boosting Europe’s competitiveness and security.

Approximately half of the EIB’s financing within the EU targets cohesion regions, where per-capita income is below the EU average, while almost 60% of annual EIB Group investments support climate action and environmental sustainability. 

In Portugal, in 2024, the EIB Group signed new financing worth €2.1 billion for high-impact projects contributing to the country’s green and digital transition, economic growth, competitiveness and better services for their people.

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