Banco de Fomento, in statements to the Jornal Económico newspaper, explained that expenditures that have already been or will be financed by European funds or by the Portuguese State, are not eligible for BPF InvestEU guarantee lines.

This clarification came after a question addressed to Banco Português de Fomento by JE, which received complaints that there were small and medium-sized companies facing difficulties in accessing the lines.

“Companies with PRR cannot finance themselves through SME support lines. Now, since most companies have already received support from the PRR programme but need financing, everything is blocked.

The promotional bank explained that under the Mutual Guarantee Grant Agreement – InvestEU, signed between commercial banks, mutual guarantee associations and the Mutual Guarantee Fund, represented by Banco Português de Fomento (BPF) – and that, at the time, it reflects the conditions set out in the agreement concluded between BPF and the European Commission, within the scope of the InvestEU guarantee – “operations already financed once or intended to be used to pre-finance other operations are not eligible, under this line, for European financing”.

Banco de Fomento points out that this rule “is also reflected in the disclosure document that we make available on our website, where non-qualified operations can be consulted, which has been widely disseminated.”

“Companies will be informed by commercial banks that the EU does not allow any company to use this line to pay any old line,” the complaint, which reached JE’s editorial office, says.

The BPF acknowledges that “aware of market needs”, it has requested further clarification from the European Commission and in an official response, the Commission recently clarified that companies can benefit from the guarantee under the BPF InvestEU guarantee lines, but “as long as the funds are not used to finance the same project expenditures that are already covered by European funds, or to pre-finance expenditures that may subsequently be financed by those same funds”.

Therefore, Banco de Fomento highlights, expenditures that have already been financed, or will be financed by European funds or by the Portuguese State, are not eligible. “The objective of this principle is to ensure that there is no double financing of the same expenditure within the scope of a single project, and to guarantee the correct application of support”, presents the Budget Policy Framework.

“Finally, it is important to point out that in order to ensure the necessary controls to guarantee the correct eligibility of investments and the strict coverage of financing granted to companies, the Policy Financing Fund is currently analyzing ways to improve the activation of this standard and improve its application,” adds the bank led by Ana Carvalho in response to Jornal Económico.

555 operations have already been approved under the InvestEU lines launched by Banco Português de Fomento (BPF) on July 5, a source from the institution revealed to Económico.

Banco de Fomento also announced that BPF InvestEU guarantee lines have a more flexible decision-making process, and that in addition to the operations already approved, there are hundreds in the final analysis stage.

Improvements include a more flexible application process, with greater efficiency in document submission and validation, allowing for reduced credit analysis and approval times.

Banco Português de Fomento (BPF) announced in July the contracting and launching of the BPF InvestEU guarantee lines, for a total amount of €3.6 billion. The lines aim to finance companies operating on the national territory, under the InvestEU guarantee agreement, signed on June 18 between Banco Português de Fomento and the European Commission.

The protocol was signed by 20 credit institutions and four mutual guarantee associations.

There are three lines available. The BPF InvestEU Guarantee Line – SMEs and SMEs with a total amount of $2,560 million is allocated to three main types, sustainable investment (1,280 million), investment (640 million) and working capital (640 million).

Then there is the BPF InvestEU Guarantee Line – Sustainable Urban Mobility totalling €284 million to encourage sustainable mobility solutions in companies operating in the passenger transport sector.

The third is the BPF InvestEU Guarantee Line – Research, Innovation and Digitalisation, worth €711 million, which finances projects related to research, innovation and digitalisation, strengthening the competitiveness and digital transition of Portuguese companies.

BPF InvestEU guarantee lines target SMEs, SMEs and support operations aimed at sustainable investment. The lines also aim to promote growth, innovation and competitiveness.

In practice, this financing of the company involves sharing the financing credit risks between banks, mutual guarantee companies, the partnership fund and the European Union.