The European Investment Bank will provide EUR 200 million to Instituto da Habitação e Reabilitação Urbana -IHRU, a public institute- responsible for the financing and promotion of new social housing, the management and maintenance of existing social housing stock and the regeneration of old city centres in Portugal.
EIB President Philippe Maystadt and INH President José Teixeira Monteiro signed the finance contract in Lisbon, during an event also attended by the Minister for Environment, Spatial Planning and Regional Development Francisco Nunes Correia, and by Secretary of State for the Territory and Cities João Ferrão.
The funds that the EIB will provide will foster sustainable urban development and combat the impact of localised deprivation and social exclusion. Rehabilitation of degraded units of housing to bring them to requisite standards will reduce de-population of inner city areas and provide a high value added. This will be reflected not only in terms of physical assets but also in terms of developing economic activity and recovering the cultural and social significance of a heritage of extraordinary quality.
Regenerating dilapidated areas in Porto and western Lisbon will attract back residents that have been abandoning central city areas, leaving large numbers of dwellings empty or without proper habitability conditions. Moreover, the project will also promote tourism, commercial and other activities that are well adapted to central city areas.
The rehabilitation of existing social housing stock will concern units in urban centres throughout Portugal. The majority will be in deprived neighbourhoods. Of capital importance will be the accompanying measures regarding infrastructure, public spaces and services. Their upgrading will see the quality of life in neighbourhoods substantially improved. In most schemes, within the integrated urban plans, reversing the situation will require the creation of new common areas chronically lacking in the old city centres, e.g. additional green areas, better drainage and sanitation, the provision of health, education and sport facilities, social services, and off street parking for residents.
Only 20% of the Portuguese housing stock is rented, with social housing representing just 3% of the total.
The EUR 1.5 billion project is a pioneer scheme, being the first integrated urban renewal operation financed by the EIB in Portugal, since the 2004 legislation creating urban regeneration corporations to implement integrated plans for complete urban renewal.
The 20 - 30 years financing provided by the EIB towards the funding of public sector investments will complement the mainly private sector funding (EUR 1.3 billion). Some of the investments may in the future qualify for further EU support, for instance under the new JESSICA initiative (Joint European Support for Sustainable Investment in City Areas).