CEB and EIB provide €280 million to finance modernisation and expansion of irrigation infrastructure in Portugal
13 April 2018
- The project will increase and diversify the 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 Council of Europe Development Bank (CEB) and the European Investment Bank (EIB) 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. CEB Vice-Governor Rosa María Sánchez-Yebra, EIB Vice-President Andrew McDowell, and the Portuguese Minister of Finance Mário Centeno participated in the signing ceremony for the €80 million CEB loan and the €200 million EIB 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 CEB and the EIB 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 CEB and EIB co-financed project. The use of new irrigation technologies will reduce the dependence on rainfalls 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 loss by an estimated 35 million cubic meters. 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 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.
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.”
“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 economy development in various sectors, in particular agriculture. Furthermore, it underlines that fostering investments in cohesion regions is one of the EU bank´s priorities”.
“I welcome this joint operation by the Portuguese Republic, the EIB and the CEB. This investment in the expansion and modernisation of irrigation infrastructures in Portugal truly illustrates the role that European institutions, alongside national efforts, can play in supporting sustainable growth and employment,” stated the Portuguese Finance Minister Mário Centeno. “As policy-makers, 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.”
The CEB and Portugal:
The Council of Europe Development Bank (CEB) was set up in 1956 as a major instrument of solidarity in Europe and today has 41 member states. It finances social projects through loans to national governments, financial institutions, and local authorities in its member states, in accordance with its social mandate.
Portugal has been a CEB member since 1976. The CEB has been contributing to the implementation of the country’s social policies, financing investments in the areas of social housing, urban development, environmental protection, health and education infrastructure, support for small and medium-sized businesses, and assistance to the victims of natural disasters. Over the last ten years, the CEB has approved more than EUR 800 million for social development projects in Portugal.
The CEB is also supporting the social integration of migrants and refugees in the country. Through a grant from its Migrant and Refugee Fund (MRF), the CEB is financing the construction of a new refugee centre in co-operation with the Portuguese Refugees’ Council.
The EU Bank in Portugal:
The European Investment Bank (EIB) is the long-term lending institution of the European Union owned by its Member States. It makes long-term finance available for sound investment in order to contribute towards EU policy goals.
In 2017, the European Investment Bank (EIB) Group provided a total of EUR 1.905 million to finance 25 operations in Portugal. Portugal was among the 10 EU countries that have received the largest financial support from the EIB Group. This financing accounted for about 1% of Portuguese GDP.
Around 20% of the total EIB Group activity in Portugal in 2017 was dedicated to action against climate change. Financing focused on sustainable economic growth and upgrading water infrastructures totalled EUR 360 million in 2017, which represents an increase of about 40% compared to 2016.
For more information about the EIB in Portugal, click here.
Set up in 1956, the CEB (Council of Europe Development Bank) has 41 member states. Twenty-two Central, Eastern and South Eastern European countries, forming the Bank's target countries, are listed among the member states. As a major instrument of the policy of solidarity in Europe, the Bank finances social projects by making available resources raised in conditions reflecting the quality of its rating (Aa1 with Moody's, outlook stable, AA+ with Standard & Poor's, outlook positive and AA+ with Fitch Ratings, outlook stable). It thus grants loans to its member states, and to financial institutions and local authorities in its member states for the financing of projects in the social sector, in accordance with its Articles of Agreement.