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EIB supports water in Portugal with EUR 420 million loan

Staff Writer |
The European Investment Bank (EIB) is providing EUR 420 million to Águas de Portugal (AdP) and its operating subsidiaries to finance investments in water infrastructure in Portugal.

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This operation is guaranteed by the European Fund for Strategic Investments (EFSI), the core of the Investment Plan for Europe, the so-called Juncker Plan.

A first tranche of EUR 220 million has been signed today in Lisbon by EIB Vice-President Román Escolano and the President and CEO of Águas de Portugal, João Nuno Mendes.

This loan will facilitate the improvement of the quality, efficiency and sustainability of water and wastewater services in Portugal, by supporting the construction and renovation of the related infrastructure facilities throughout mainland Portugal.

The upgrading of Portuguese water infrastructure will also contribute to fostering economic growth, by creating more than 7,400 jobs during the implementation stage, and will facilitate social and territorial cohesion, since most of the investments will be implemented in convergence regions of Portugal.

The project will also bring important and lasting environmental benefits as it will improve the ecological quality of surface and groundwater resources, triggering more rational use of water resources. Over the next four years, this EIB financing will contribute to carrying out a large investment programme with more than 1,000 improvements in water supply networks that will directly benefit Portuguese citizens by increasing both the quality and the coverage of the service in Portugal.

The investments will also increase the volume of wastewater managed with improved standards by facilitating the construction of new collection and treatment plants.

Over 8 million people are expected to benefit from improved water services and over 6 million from enhanced wastewater services.

The remaining financing of EUR 200 million may be provided through an alternative structure with no recourse to AdP Group.

This tranche, whose final terms are still to be defined, could be an innovative monetisation tool for the municipalities which has not been available to date.

Thanks to the support of the Juncker Plan, the EIB is able to provide Águas de Portugal with the required financing on advantageous terms regarding both the duration of the loan and its interest rates.

By backing this EIB funding, the Investment Plan for Europe is also contributing to ensuring Portugal's compliance with key European legislation in the water sector since this EIB financing will help to implement and accelerate the ongoing reform of the water sector under PENSAAR 2020 (Portugal’s Strategic Plan for Water Supply and Wastewater Sanitation for 2020).

The EIB has a long-standing relationship with the AdP Group dating back to the 1990s and has played an outstanding role in the last two decades in the financing of the water sector in Portugal.

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