Available since the end of October 2017, IFRRU 2020 provides EUR 1.4 billion for interventions aimed at the complete rehabilitation of buildings aged 30 years or more, abandoned spaces and industrial units and private fractions inserted in social housing buildings.
The Financial Instrument for Urban Rehabilitation and Revitalization (IFRRU), created under Portugal 2020 (Partnership Agreement between Portugal and the European Commission), is part of the Government's strategy for creating the conditions for rehabilitation to be the main form of intervention in building and urban development.
EUR 700 million are public and Community funds from all the Portugal 2020 Regional Operational Programmes, the European Investment Bank (EIB) and the Council of Europe Development Bank (CEB). The remaining EUR 700 million, made available by four banks, leverage public funds.
The new financial instrument provides loans under exceptionally advantageous conditions, compared to those existing in the market. As an example, for an operation of one million euros, the average spread goes from 2.5% to 1.3%; and the initial fee will be 0.65% (of capital) for companies and 1% (of capital) for individuals, a reduction of 39% and 17%, respectively. The financing amount can go up to 20 million euros, with extended deadlines - maturity of 20 years for lease and seven years for sale - and grace for up to four years.
For projects that do not have sufficient guarantee, the IFRRU 2020 also provides, alternatively, a guarantee through the Portuguese Mutual Guarantee System, only accessible to companies.
IFRRU 2020 finances projects located in the urban rehabilitation areas defined by the municipalities throughout the national territory, which in a simplified way are the historical centers, abandoned industrial zones and riverine areas. Any type of beneficiary, whether individual or collective, public or private, can apply for the complete rehabilitation of buildings, for housing purposes or other activities, including the most appropriate integrated energy efficiency solutions for rehabilitation.
The formalization of the applications is simple and takes place in three steps:
1. Each municipality will have an IFRRU 2020 interlocutor, who will issue the project guidelines and support the licensing process.
2. In order to ensure the selection of the best solutions to increase the energy efficiency of the property to be rehabilitated, a qualified expert will carry out the Energy Certification process.
3. The loan application is carried out at a branch of the commercial network of any of the four banks selected to operate under IFRRU 2020.
Applications for financing are presented at the moment the investor considers most appropriate, with no pre-determined phases each year for submission and decision on applications, or limits on the number of applications. The first rehabilitation project funded by IFRRU 2020 is located on the Madeira island and will cost 645,000 euros. It is expected to be completed by the end of the first half of this year.
