Portugal among the seven main beneficiaries of EIB support | European Union

Last year, Portugal benefited from more than 2,100 million euros in support from the European Investment Bank (EIB) group, according to accounts released this Tuesday by the entity, which includes the bank itself and the European Investment Fund (EIF). ).

It thus remained among the seven main beneficiaries of those institutions (held by the 27 Member States of the European Union), when support is measured as a percentage of GDP. In guarantees and loans and other financing mechanisms, EIB aid is equivalent to 0.8% of Portuguese Gross Domestic Product (GDP).

About half of that amount (one billion) went to help small and medium-sized enterprises (SMEs), as well as mid-cap companies (which are not SMEs but also do not meet the definition of large companies). This volume is more than double the aid provided to these sectors in 2022, according to the EIB group in a statement released this Tuesday.

“We are strengthening our support for small and medium-sized companies, which are at the heart of the Portuguese economy, making them the engine of economic growth, job creation and sustainable development”, said the president of the EIB, Nadia Calviño, who She recently exchanged the Economy portfolio in the Government of Spain for the presidency of this institution, to which she was elected in December, with the support of Portugal.

The statement highlights that “more than 19 thousand companies received support” last year. The 2,800 million euros made it possible to multiply investments in areas considered vital, such as the ecological and digital transition. In total, the EIB’s aid made it possible to “mobilize” 7,700 million euros, the bank calculates.

Through contracts with three Portuguese banks (Santander, Novo Banco and BCP), the objective was established to mobilize 2300 million euros “in new financing to increase the competitiveness of companies”, he adds. The EIF contracted 366 million euros, which allowed approximately 1200 million additional funds to be channeled. “Ninety percent of these investments took the form of guarantees”, he details.

“The EIB Group presented excellent results in Portugal in 2023”, guarantees Calviño. “Our investments are contributing to strengthening the competitiveness of the Portuguese economy and have a concrete impact on the ground, increasing social cohesion and promoting a green economy”, he continues.

In detail, 282 million were dedicated to innovation, digitalization and human capital projects. 604 million were dedicated to sustainable energy and natural resources, including financing of 115 million to Navigator, to reduce direct CO2 emissions by around 136 thousand tons per year through the construction and operation of a high-efficiency recovery boiler in the Setúbal industrial complex.

Another 209 million went to “sustainable cities and regions” projects. An example of this is the 24 million in financing for Loures, which is part of a framework loan totaling 100 million.

“The EIB also allocated 90 million euros to this priority within the scope of the framework loan with the Portuguese Government”, adds the press release.

“Green financing” to Portugal was 746 million, 4% more compared to the previous year. Examples include support for the rehabilitation of buildings for greater energy efficiency. The EIB provides guarantees to commercial banks, which in turn finance these projects.

Cohesion funding, in turn, was 1,410 million euros, by far the largest share, representing 66% of the total. In this regard, the EIB cites the example of the loan of 66 million to improve maritime accessibility in the Port of Leixões (Matosinhos).

The EIB only finances projects in the EU that are considered viable and that are aligned with European strategic objectives. In 2023, all signed commitments involve amounts in the order of 88 billion euros, which means that, in nominal terms, Portugal represents 3.18% of these financing contracts contracted last year. Portugal holds 1% of the EIB’s capital.

In a study released in February, the EIB warned of a possible retraction in investment in the near future, due to the return to the rules of the Stability and Growth Pact (PEC).

Even with an agreement for a new economic governance framework, reached in December, governments will be forced to carry out more “fiscal consolidation” (read deficit and debt cuts).

In the accounts of EIB economists, these budgetary adjustments “tend[m] having a disproportionate impact on public investment” and also affecting private investment: “It is expected that budgetary consolidation of 1% of GDP will lead to a 1% drop in private investment.” In this context, those responsible for this institution consider, EIB support will have increased importance, as will the European mechanism that finances the PRR of the 27 Member States, as well as the REPowerEU program, whose implementation has progressed less quickly than initially expected.