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Financial Instrument for Urban Rehabilitation and Revitalisation

  1. Framework

The Financial Instrument for Urban Rehabilitation and Revitalisation (IFRRU) provides loans at more favourable conditions compared to those of the market, for the comprehensive rehabilitation of buildings, intended for housing or other activities, including the most appropriate integrated energy efficiency solutions in the context of such rehabilitation.


The rehabilitated buildings can be used for any purpose such as own housing, rental, sale, economic activities and collective use facilities. Any natural or legal entity, public or private, profit-making or non-profit-making, may apply for IFRRU.

  1. Eligible Projects

Comprehensive Rehabilitation of buildings with an age greater than or equal to 30 years, or in the case of lower age, which demonstrate a level of conservation equal to or less than 2 years (under the terms of DL nº 266-B/2012, 31 Dec), including social housing buildings:

  • Rehabilitation of abandoned industrial sites and units;

  • Rehabilitation of social housing buildings older than or equal to 30 years;

  • Rehabilitation of private fractions inserted in social housing buildings that are subject to full rehabilitation;
  • Rehabilitation of public space, as long as it is associated with rehabilitation actions of the surrounding built complex, in progress or completed in the last 5 years or less.

The buildings to be rehabilitated must be located in Urban Rehabilitation Areas (ARU), defined as priorities by each Municipality.


Depending on whether they are residential, non-residential or social housing buildings, respectively, they must be included in the territories defined in:

  • PARU - Urban Regeneration Action Plan (or similar instrument in the Autonomous Regions);

  • ARU - Urban Rehabilitation Area delimited by the Municipality;

  • PAICD - Integrated Action Plan for Disadvantaged Communities.

  1. Access conditions 

  • Be legally constituted, where applicable, to be declared in the application and proven by the date of conclusion of the contract;

  • Have the tax and social security situation regularised before, respectively, the tax administration and social security, to be declared in the application, and to be proven at the conclusion of the contract and at each disbursement;

  • Be able to legally carry out activities in the territory covered by IFRRU 2020 and by the typology of operations and investments to which it applies, a condition to be declared nthe application and to be verified until the commissioning of that activity;

  • Possess, or be able to ensure until the approval of the application, the technical, physical and financial means and human resources necessary for the development of the operation;

  • Have the situation regularised with regard to recoveries, in the context of ESI Funds funding, to be declared in the application and with each disbursement request;

  • Have a balanced economic and financial situation, to be demonstrated in the application, which, in the case of non-business entities will be waived, only having to demonstrate financial capacity;

  • No salary arrears as at the date of submission of the application or until the signing of the loan agreement with the selected Bank (except for natural persons who are not companies), to be declared in the application and at the signing of the loan agreement;

  • In the application submit a declaration of commitment to provide the information deemed necessary for the follow-up and monitoring of the implementation of the investments, according to the defined periodicity, and to accept to be audited by the General Inspectorate of Finance, as Audit Authority, the Agency for Development and Cohesion, as Segregated Audit Structure and Certification Authority, the European Commission and the European Court of Auditors;

  • Do not hold or have held capital in a percentage greater than 50%, by you or your spouse, not separated from persons and property, or by your ascendants and descendants up to the 1st degree, as well as by the one who lives with you in conditions similar to those of the spouses, in a company that has not complied with the notification for the return of support under an operation supported by European funds, presenting a declaration of this commitment in the application;

  • Not having unjustified incidents or defaults with the bank and not being in a credit risk rejection class, according to the classification scale defined by the Bank, including guarantors (if any), and partners (in the case of companies), a condition that does not require proof by the beneficiary but which is assessed by the Bank;

  • Ensure compliance with national and EU legal procedures on public procurement for the works and purchases of goods and services that it undertakes;

  • Demonstrate, in the application or until the conclusion of the contract, the ownership that gives the applicant the power to carry out the intervention in the property (property, fraction, space) subject to the funding request (considering any title - whether property right, lease, usufruct, concession, or any other permitted right).

If you are a company, in addition to the above criteria, you must also fulfil the following:

  • Not be an undertaking in difficulty as defined in Article 2 of Regulation (EU) No 651/2014 of 16 June, to be declared under undertaking in the application;

  • Not be a company subject to a recovery order, still pending, following a previous decision of the European Commission declaring an aid illegal and incompatible with the internal market, as provided for in Article 1(4)(a) of Regulation (EU) No 651/2014 of 16 June, by submitting a declaration of commitment in the application;

  • Not to have closed the same or a similar activity in the European Economic Area in the two years preceding the application for funding and that it has no concrete plans to close that activity within a maximum of two years after the completion of the investment for which funding is requested, as provided for in Article 13(d) of Regulation (EU) No 651/2014 of 16 June, by submitting a declaration of commitment in the application;

  • If you are a Small or Medium-sized Enterprise (SME), within the meaning of Commission Recommendation 2003/361/EC, prove this condition until the date of approval of the financing, through the Electronic SME Certification issued by IAPMEI in accordance with Decree-Law no. 372/2007, of 6 November.

  1. Amount of Support

  • Interest rates below market rates for investments of the same nature;

  • Maturity: up to 20 years, defined by the Bank according to the project's profitability forecast;

  • Capital grace period: investment implementation period (duration of the work) plus 6 months, up to a maximum of 4 years.

Regarding the Interest Rates:

  • In order to determine the specific interest rate applicable to your request for financing, the promoter decides the bank with which he wishes to contract, being able to consult several banks and assess the best conditions offered.

The overall value depends on the combination of the various sources of funding, with only the interest rate of the part financed from European funds and their national public counterpart being 0%.

Co-financing of operations in two strands:

  • Funds obtained through the Banking Entity
  • Public funds (ESI Funds, CPN, EIB, CEB)

  • Banking Entity Component: Spread calculated according to the risk of the operation;

  • Public funds component: Current maximum spread 0.41% (subject to annual review)

  • Financing coverage: Up to 100% of the investment value, depending on the financing needs and risk analysis by the Bank, and in this case no own resources of the beneficiary will be required.

  1. Eligible Expenditure
  • Building and other engineering works;

  • Carrying out studies, plans, projects, preparatory and advisory activities directly linked to the operation, including the preparation of financial feasibility studies, where applicable;

  • Purchase of equipment essential for the rehabilitation of the building (e.g. lifts, HVAC, provided they do not fall under the energy efficiency components described below);

  • Supervision, safety coordination and technical assistance;
  • Tests and trials;
  • Acquisition of buildings and land, built or unbuilt;
  • VAT;

  • Price revisions resulting from the applicable legislation and the contract, up to a limit of 5% of the eligible value of the work actually carried out;

  • Specific expenditure relating to the energy efficiency component.

  1. Ineligible Expenditure
  • Compensation to tenants;
  • Expenditure on the purchase of equipment inherent to the productive activity to be installed, relating to operation, including working capital, maintenance or repair linked to the operation of the infrastructure or equipment;
  • The SPUs (Small Production Units);
  • In the Autonomous Regions of the Azores and Madeira, the purchase and installation of domestic hot water (DHW) systems using liquefied petroleum gas is not eligible;
  • Modernisation or conversion interventions that change the use of infrastructure co-financed by the European Funds less than 10 years ago;
  • Relocation costs;
  • Costs relating to the amortisation of buildings or equipment;
  • Contributions in kind;
  • Expenditure on debtor interest, fines, financial penalties and costs of legal proceedings.
  1. Adhering Credit Institutions

The following entities were selected through a public tender, with international publicity, limited by prior qualification (only the entities that applied and that presented technical capacity to manage loans for urban rehabilitation and financial capacity were qualified):

The following entities were selected through a public tender, with international publicity, limited by prior qualification (only the entities that applied and that presented technical capacity to manage loans for urban rehabilitation and financial capacity were qualified):
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