Development bank quadruples concession of State-backed RRP grants to companies and projects

The maximum limit for State-backed Recovery and Resilience Plan and other grants to be paid out by Portugal’s development bank for next year has been quadrupled.

According to a proposal for the State Budget 2026, Portugal’s development bank Banco de Fomento will be able to issue State -backed grants from €2Bn now (2025) to €8Bn next year (2026) from the total RRP funds of €16.56Bn – an increase of 69% compared to 2025.

Every year, the maximum limits for the granting of guarantees are published in the Budget, whether for the Government, the Financial Management Institute or other entities, which may or may not be used in full.

In view of the State Budget for 2025, nothing changes except for two types of guarantees: those issued in favor of the Mutual Counter-guarantee Fund and by other legal entities governed by public law. The amount has almost quadrupled.

When guarantees are actioned, they have a negative impact on the State Budget, although they can be accounted for in the year in which the guarantees are actioned or, if the National Statistics Institute (INE) considers that a high risk of execution exists, on the year that the guarantees are issued.

The big jump is in the “maximum limit for issue of State-backed grants by other legal entities governed by public law” which is set, “in terms of annual net flows”, at €8Bn, a figure that compares with the €2Bn registered in this year’s State Budget. Guarantees that will be “almost all” destined for the Development Bank, an official source at the Ministry of Finance told the online news source ECO.

The Bank of Fomento has been called upon to support increasingly more economic support and as part of the Portugal RRP (Recovery and Resilience Plan) the bank has developed credit solutions for companies and entities through five direct and indirect capital instruments.

Source: ECO