Government removes RRP loans for the Lisbon Metro red line and new Lisbon hospital

Portugal’s government has decided to withdraw Recovery and Resilience Fund financing from the Lisbon Metro Red Line extension plan and the new East Lisbon Hospital Oriental project (Todos-os-Santos) worth €311 million.

Portugal will now not use funds from the €22.2Bn European ‘bazooka’ funding. With a rescheduling delivered on Friday by the Government to Brussels, the government’s option is to remove the €311 million from the loan component since the expansion of the Lisbon Metro Red Line and the Lisbon Oriental Hospital will no longer be financed by the Recovery and Resilience Plan, but from other loans.

“The works that were planned to be financed with RRP loans and that cannot be carried out until August 2026, amounting to €311 million, will be carried out using other loans, with equivalent interest rates. This will be the case of the Lisbon Metro red line,” reads the statement from the Ministry of Economy released this Saturday.

The total amount of the RRP remains at €22.19Bn but the government is now is now focused on using all of the Brussels grants concentrating resources on projects that have to be executed by 2026.

This means that the government may or may or may not use some €5.87 million in EU loans.

Described as using the money “responsibly” by Minister Manuel Castro Almeida, the government has decided to merge and simplify processes and slash redundant targets, for example by introducing merges between new build housing and renovating old stock, while beefing up company financing through the Financial Instrument for Innovation and Competitiveness (IFIC) with funding worth €617 million.

Source: ECO