HIGH SPEED RAIL LINE PORTO-LISBOA PHASE 1

The project will finance the construction of the phase 1 of the High-Speed Line Porto-Lisbon, namely the 143 km section between Porto-Campanhã station and Soure (Coimbra)., including 47 km in five single-track connections with conventional network to ensure accessibility to other cities in the north of Portugal.

The aim is to increase the quality of rail services in the cohesion regions of centre and north of Portugal. By promoting travel by rail, the project will enhance sustainable transport in line with EU objectives and contribute to the EIB's cohesion (100%), climate action and environmental sustainability targets (100%). The project is located on the core TEN-T (Atlantic Corridor) and therefore provides a missing link that will yield benefits across the wider TEN-T network. The project is therefore eligible under Article 309 point (a) "projects for developing less-developed regions" and point (c) "projects of common interest" of the EU Treaty.

The project consists of the design, construction, financing and maintenance of the Phase 1 of the high-speed line between Porto and Lisbon, namely the 143 km section between Porto-Campanhã station and Soure (Coimbra), as well as five single-track connections with conventional network to ensure accessibility to other cities in the north of Portugal. The main sections of the project will be implemented through 2 independent PPPs based on availability payments. Infraestruturas de Portugal is the procuring authority.

The project is eligible under InvestEU as it supports the development of sustainable and safe transport infrastructures. In particular, it regards the development of a section of the Atlantic Core trans-European transport network (TEN-T) corridor. Moreover, the project significantly shortens the travel times between different urban centres that extend far beyond those that are directly served by the high-speed line. Furthermore, the project runs entirely on cohesion regions of centre and north of Portugal, contributing to the Bank's cohesion lending objective. By promoting travel by rail, the Project will reduce contribute to deliver the Bank's climate action and environmental sustainability targets. 

EIB financing availability is considered crucial as it addresses a suboptimal investment situation that is due to the following factors:

(i)                 the nature of the investment as a public good for which the borrower cannot capture sufficient financial benefits and fails to internalize externalities such as time savings and climate protection.

(ii)                private financial actors would not be able, in the absence of the EIB support, to provide the total amount of financing needs necessary for the realization of the project.

(iii)               the long loan tenor requested for which private-sector funding alternatives are limited since only few investors would be willing to invest in long-term transactions at affordable terms.

Therefore, the procuring authority considers EIB as a cornerstone lender in order to (i) bring the appropriate stability and reliability of financing resources, (ii) ensure the implementation of the project in a timely manner and (iii) attract other specialized lenders to complete the sizeable funding plan of this project.

EIB's financial expertise to appraise and structure the project from the preliminary stages has a significant impact on the financing structure of the investment and brings significant added value to the promoter. Significant additionality is brought by the EIB participation since reaching the necessary amount of liquidity at reasonable financing costs, is not guaranteed without the Bank's participation. Thanks to Invest-EU, the EIB will maximize, in terms of risk and volumes, the added value to the project SPVs and in turn to the public authority. In particular, the EIB competitive cost of financing is expected to be factorized in more competitive offers from the bidders and will result in a financial advantage that will be totally transferred to the ultimate beneficiary of the Project, the Portuguese State through Infraestruturas de Portugal, resulting in turn in savings for the Portuguese taxpayers. 

The main sections of the project will be implemented through PPP models based on availability payments; EIB financing availability is considered cornerstone for the successful financing of the Project, considering the following factors:

(i) the existence of a suboptimal investment situation since private financial actors would not be able, in the absence of the EIB support, to provide the financing needs necessary for the realization of the Project. 

(ii) the Grantor considers that without a meaningful EIB participation in the financing of the PPPs, the success of the Project would be at risk.

(iii) EIB competitive cost of financing is expected to be factorized in more competitive offers from the bidders and is expected to be totally transferred as a financial advantage to the ultimate beneficiary of the Project, the Portuguese State through IP. 

The project would not have been carried out (to the same extent and with the same amounts) by the EIB without the InvestEU support. 

The project falls under Annex I of the environmental impact assessment (EIA) Directive 2011/92/EU as amended by Directive 2014/52/EU, requiring a full EIA procedure. EIA studies have been completed and the Competent Authorities have issued Environmental Decisions for the northern section (August 2023) and southern section (November 2023). Compliance with the Birds and Habitats Directives (2009/147/EC and 92/43/EC, as amended) is to be assessed during the appraisal. Project impact on nearby NATURA 2000 sites will be verified during appraisal. The project is expected to fully contribute to climate action and environmental sustainability (CA&ES) objectives, in particular to climate mitigation and pollution prevention and control. The project will be implemented in conformity with the current accessibility requirements, which will improve accessibility of the railway system for persons with disabilities and with reduced mobility.

The project will be implemented through 2 PPP contracts with availability payments for the sections Porto - Oiã and Oiã - Soure (approximately 70 kilometres each) (for the first section a prior information notice has been published in the OJEU, 2023/S 217-683508 and the tender was launched on 12th January 2024 OJEU 2024-OJS012-31187) as well as various contracts under traditional procurement for signalling, stations and some other singular structures. The EIB will require the promoter to ensure that contracts for implementation of the project, including the PPP contracts, will be tendered in accordance with the applicable EU procurement legislation: Directive 2014/25/EU as well as Directive 92/13/EEC as interpreted by the Court of Justice of the EU, with publication of tender notices in the EU Official Journal, as and where required.