Portugal Secures €1.34B EIB Loan to Boost Affordable, Green Public Housing

The Republic of Portugal and the European Investment Bank (EIB) have finalized the first tranche of a groundbreaking €1.34 billion framework loan to finance a large-scale public housing programme across the country. The first €450 million disbursement was signed at the Palácio de São Bento in Lisbon, the official residence of the Prime Minister, marking a historic step in tackling Portugal’s pressing housing challenges.

Addressing Housing Shortages and Social Inclusion

The programme will support the construction and renovation of approximately 12,000 affordable rental units nationwide. These homes will be offered at below-market rents, directly addressing affordability gaps in Portugal’s housing sector. By expanding the supply of long-term public housing, the initiative aims to improve living conditions for low- and middle-income families, strengthen social inclusion, and enhance territorial cohesion between regions.

Minister for Infrastructure and Housing Miguel Pinto Luz underscored the importance of the initiative:

“Providing a solution to housing challenges is an absolute priority for this Government, which counts on the EIB as a key partner. With this €1.34 billion in financing, we now have another tool to deliver approximately 12,000 more affordable homes at below market prices, available to families as quickly as possible.”

Financing Structure and EU Support

The project is jointly supported by the EIB and the European Union’s Recovery and Resilience Facility (RRF). Together, EU/RRF and EIB contributions will cover about 90% of the total investment, with the EIB financing representing 75%. This blend of European-level financial backing underscores the strategic importance of public housing in Portugal’s economic and social recovery.

Minister of State and Finance Joaquim Miranda Sarmento highlighted the long-standing partnership:

“Today a very important step has been taken in financing the construction and renovation of public housing. I 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.”

Building Energy-Efficient and Climate-Resilient Homes

Beyond affordability, the programme is designed to align with EU climate and sustainability objectives. All new and renovated housing units will incorporate energy efficiency standards, renewable integration, and climate resilience features. These measures aim to reduce carbon footprints, lower energy costs for tenants, and ensure housing stock remains resilient against the impacts of climate change.

EIB Vice President Ioannis Tsakiris emphasized the broader role of affordable housing:

“Affordable housing is essential not only for social cohesion but also for economic competitiveness, climate resilience, and sustainable urban development. With this financing agreement, we are strengthening our strategic partnership with Portugal to expand access to housing, foster balanced territorial development, and contribute to climate action through energy-efficient living.”

Strategic Importance for Portugal and the EU

The initiative aligns with the EIB Group’s Strategic Roadmap 2024–2027, which prioritizes both socio-economic and territorial cohesion and climate action. By creating sustainable housing, the programme contributes to inclusive growth, reduces inequalities across regions, and supports Portugal’s long-term economic resilience.

For the government, this agreement also represents a landmark policy intervention in housing—a sector where demand has far outstripped supply. Rising real estate prices and rental costs in recent years have deepened inequalities, particularly in urban centers such as Lisbon and Porto. The EIB-supported programme is therefore positioned not only as a housing project but also as a strategic investment in national competitiveness, demographic stability, and social well-being.

Looking Ahead

With the first tranche now secured, Portugal is set to begin implementation swiftly, ensuring that thousands of families will gain access to safe, sustainable, and affordable homes in the coming years. This project is expected to serve as a model for other EU member states, demonstrating how strategic financing partnerships can accelerate progress toward shared goals of social justice, territorial balance, and environmental sustainability.