Banks contest development bank over InvestEU credit lines

Banks in Portugal say they have tens of millions of euros to finance innovative company projects up and down the country through the InvestEU credit line but can’t because the projects have already received approval for funds from Portugal’s Recovery and Resilience Programme (RRP) or EU funds from PT2030.

The problem lies with the InvestEU credit lines launched by Portugal’s development bank Banco do Fomento on July 5, the online news source ECO has discovered.

This line should enable companies to secure additional sources of funding that are essential to get approval for any application for European funds.

However, on September 20, there had been no projects for this credit line that had been approved because “operations already financed once, or that are intended to be used to pre-finance other operations with European funds” are not eligible for these lines, under the rules.

Banks have tens of millions of euros that cannot be financed with the InvestEU line from Banco de Fomento, particularly regarding the investment and innovation sub-lines, as these involve companies with projects approved with funds from the RRP or PT2030. The banks do not agree with Banco de Fomento’s position and, therefore, have requested clarification on the matter.

Banco de Fomento explained to ECO that “it has given clarifications to the “adhering credit institutions” (banks) and Mutual Guarantee Societies (SGM) – in accordance with the provisions of the Agreement for the Granting of Mutual Guarantees – InvestEU that operations already financed once or intended to be used to pre-finance other operations with European funds are not eligible (for additional funds) using this line”.