EIB and CEB provide EUR 280 million to finance modernisation and expansion of irrigation infrastructure in Portugal
- The project will increase and diversify agricultural production in the country and reduce water losses
- The implementation phase of the new infrastructure will create employment opportunities for equivalent of 6,600 persons. In addition, the project will generate agri-business related jobs equivalent to 6,450 persons per year during operation.
The European Investment Bank (EIB) and the Council of Europe Development Bank (CEB) will contribute to the financing of the National Irrigation Programme of Portugal, supporting investments in mainland regions of the country, mostly in the Alentejo, which is served by the Alqueva water system. The project is aimed at fostering economic development in rural areas and increasing resilience to the effects of climate change, in particular drought. EIB Vice-President Andrew McDowell, CEB Vice-Governor Rosa María Sánchez-Yebra and Portuguese Minister of Finance Mário Centeno participated in the signing ceremony for the EUR 200 million EIB loan and EUR 80 million CEB loan to finance the project held in Lisbon today. The Minister of Agriculture, Forestry and Rural Development, Luís Capoulas Santos, also attended the event.
The loans provided by the EIB (EUR 200 million) and the CEB (EUR 80 million) will finance projects designed to expand and modernise existing irrigation areas and to renovate infrastructure through the construction and rehabilitation of water intakes, pumping stations, collectors and other irrigation equipment.
Portuguese agriculture is expected to benefit significantly from this EIB and CEB co-financed project. The use of new irrigation technologies will reduce the dependence on rainfall and exposure to climate variability, thereby promoting the development and resilience of rural economies. Furthermore, the expansion of irrigated areas will enable the increase and diversification of agricultural production, facilitating the production of olives, maize and wine. Off-farm infrastructure will also be updated with modern, automated and smart cropping control systems.
These investments will contribute to water savings, reducing water losses by an estimated 35 million cubic metres. They will also increase the energy efficiency of water pumping: the new and rehabilitated water infrastructure will mostly consume energy generated internally from water impulsion.
This transformation of the country’s agricultural productivity will foster employment on farms in Portugal and will generate employment in the local agro-food sector, contributing to the reduction of rural migration. The execution of the different projects, mainly in the Alentejo but also in the Algarve, on the northern and central coast and in the central interior of Portugal, is expected to create employment opportunities for equivalent of 6,600 persons over the implementation phase of the off-farm infrastructure and associated on-farm investment. On the other hand, the project will generate agri-business related employment of some 6,450 persons equivalent per year during operation.
“We are pleased to contribute to financing the modernisation and expansion of irrigation systems in Portugal”, stated EIB Vice-President Andrew McDowell at the ceremony held today in Lisbon. “The agreement we have signed demonstrates the EIB’s commitment to financing infrastructures that boost economic development in various sectors, in particular agriculture. Furthermore, it underlines the fact that fostering investments in cohesion regions is one of the EU bank´s priorities”.
Commenting on the signing, CEB Vice-Governor for Social Development Strategy Rosa María Sánchez-Yebra said: “The CEB is delighted to finance the rehabilitation and extension of Portugal’s irrigation system. The project will support the development of sustainable agriculture in the country, improve living conditions in rural areas, and contribute to the fight against ecological and natural disasters such as desertification and wildfires. Promoting regional development and strengthening social cohesion is precisely what the CEB’s social mandate is all about.”
“I welcome this joint operation by the Portuguese Republic, the EIB and the CEB. This investment in the expansion and modernisation of irrigation infrastructure in Portugal truly illustrates the role European institutions, alongside national efforts, can play in supporting sustainable growth and employment”, stated Portuguese Finance Minister Mário Centeno. “As policymakers, we have the responsibility to deploy the most efficient financial instruments available to support quality investments which will yield social and economic dividends in the future. By investing in viable irrigation structures we are not only improving the management of a scarce resource such as water and fighting the effects of climate change, including desertification, but also generating economic opportunities.”