In a statement, the municipality of the district of Faro says that the decision to take out the loan aims to “ensure alternative sources of financing for the continuity” of the Local Housing Strategy (ELH), while awaiting approval of the applications submitted under the Recovery and Resilience Plan (RRP).

Approved in 2021, the Lagos Local Housing Strategy foresees the construction of 267 municipal units and the rehabilitation of the municipal housing stock, with a global investment of 48.1 million euros.

To carry out the project, a collaboration agreement was signed between the municipality and the Institute of Housing and Urban Rehabilitation (IHRU) for the financing of 34 ME, of which 15 ME was a non-refundable grant and 19 ME in a subsidized loan, specifies the municipality.

“However, to date, the municipality has not yet seen the investments approved for the application it submitted for full financing […], which is why the projects and contracts have been supported entirely by the municipal budget”, the document reads.

Given this situation, they add “there is a need to seek alternative sources of financing”.

As the municipality “has the capacity to take on debt”, the Chamber opted to resort to a medium and long-term bank loan, in the amount of 25 ME, to be applied over the next three years for the execution of the projects foreseen in the ELH, concludes the note.