Lisbon becomes the first EU municipality to receive direct support from EFSI

Description

Context

Thanks to the new approach of the mayor Fernando Medina, which aims to “change the way people live in the city”, the city of Lisbon developed an Urban Renewal Strategy. This Plan focuses on different elements, one of them is social housing. The Plan includes operations to cope with climate change, infrastructure supporting entrepreneurship, innovation, and the digital economy, supporting Healthcare and Innovative urban mobility. Finally, there is strong element of social inclusion to help migrants, as well as vulnerable local residents.  That’s one important reason why the European Investment Bank supported it with a 30-year EUR 250 million loan.

Issues tackled

The EIB was able to use the EU budget guarantee and its own funds behind EFSI, making Lisbon the first EU municipality to receive direct support from the Plan.

The municipal authority is keen to reverse a trend which has seen the population of Lisbon fall from around 800 000 in the 1960s to 513 000 today.  Under the urban renewal scheme, EIB funds will finance the renovation of existing social housing and the construction of new accommodation, all of which will benefit from energy efficiency measures to mitigate the impact of climate change.

The EIB will provide financial resources on advantageous terms regarding both interest rates and maturity. It is designed to contribute to improving the quality of life in Portugal by rehabilitating buildings for housing, public spaces and infrastructure located in residential areas and city centres, on waterfronts and in former industrial areas. The programme is also aimed at revitalizing urban brownfields situated in deprived and degraded neighbourhoods.

Additionally, the project encompasses relevant investments in energy efficiency measures, as part of the renovation of buildings, which will contribute to reducing pollutant emissions and mitigating climate change. Likewise, more sustainable facilities will help to increase the security of energy supply in Portugal by reducing dependence on imports.

Besides contributing to social cohesion, this EIB fund will help to boost both population and economic growth. The investments implemented under this financial instrument will increase the attractiveness of urban areas, including tourist destinations. It will also facilitate the emergence of new business locations, therefore generating local economic development and employment creation. The execution of the project will require around 14,000 people to be hired during the construction works.

Actors involved

• City of Lisbon
• European Investment Bank
• Gebalis-municipal housing agency

Results

EFSI financing: EUR 250 million

The construction of social housing represents a percentage of 14% from the total investments. In terms of employment, this means that this particular program is estimated to require 133 new jobs during the implementation phase of the project plus 10 more new jobs to work in other related activities.

Involved neighbourhoods include: new social houses and major repairs in existing stock. The locations envisaged for new construction are the neighbourhoods of Bairro Padre Cruz and Bairro da Boavista (some 412 units). Rehabilitation of social housing units will be located in different neighbourhoods of the City (some 960 units).

Scale

local

More information

More information about the involved housing association http://www.gebalis.pt/Paginas/default.aspx

More information on EIB website: https://www.eib.org/en/press/all/2017-237-the-eib-supports-urban-rehabilitation-and-energy-efficiency-in-cities-of-portugal-with-a-eur-300-million-loan