Thanks to a fascinating presentation by Nuno Gonçalves, Senior Manager at the PwC Portugal Advisory team, the attendees of the IPBN’s Annual General Meeting (AGM) covered the efforts and events of last year and this year so far with far more insight into what is to come in the private and public sectors as they relate to the Portuguese Recovery and Resilience Plan (PRR).
Gonçalves made very educated guesses as to what the final plan will entail as the final version is slated to be sent to Brussels for further discussion and approval at the end of this month. Upon the finalization of the plan, the government will then begin to take action at which point they will open the doors to the private sector to begin applications for funding. Considering that each country is required to compile its own Recovery and Resilience plan, Gonçalves said, “Hopefully they are coming to the end and we will begin to see the practical impact…” Gonçalves told IPBN members that, “Originally, the deadline was to be finished in the 2nd quarter by the end of June, but that might be wishful thinking. The money will really start trickling out in the 3rd quarter.”
The Senior Manager went on to say that the Lisbon metro expansion has been funded by the PRR, but private sector stakeholders don’t have the luxury of being funded by the government as easily, or as early.
Walking members through an illuminating presentation, (.pdf to download here), Gonçalves explained that in 2027, the Multiannual Financial Framework (MFF) will be offering the largest economic assistance to date. Among the numbers shared was the 390 billion budgeted to go to member state subsidies and 360 billion in loans for the Next Generation EU, comprising a total budget of 750 billion, 670 of which comes from the Recovery and Resilience facility. Of that, Portugal is slated to receive 14 billion in subsidies and just under 16 billion in loans. Gonçalves said that “We can really only expect 2.7 billion in loans to actually be executed by the government. Let’s see what happens.”
In terms of Portugal’s plan, certain areas must be targeted to receive the bulk of the funding: resilience (as a response to the pandemic), climate transition, and digital transition. “The plan is mainly geared toward public administration and there will be a strong bias to favor industrial investments, so to access these funds, business services might want to get a little creative to be considered,” Gonçalves advised. Notably, for the first time ever, 100% funding rates are being offered in support of projects in non-convergence regions, which in Portugal means Lisbon and the Algarve, as they have traditionally been limited to accessing regular EU framework funding.
Gonçalves went on to describe in detail what kinds of businesses can take advantage of the three main components of the plan: investment and innovation, industry decarbonization, and what he called enterprise 4.0. See the graphic on pages 5 - 7 of the presentation for more detailed information and to find out if your project might be a good fit for these investments, as, according to Gonçalves, “These are the main components of direct financing for private sector projects. These are our best guesses looking at the plan in place right now.”
Gonçalves concluded on a positive note by saying, “Even if the PRR isn’t everything you expected it to be, by the end of the year the next Multiannual Finance Framework (MFF) will begin and these are all much more open, with less strings attached.” In brief, Portugal will receive 33.6 billion for the next finance framework, a substantial increase from the last round in 2014. It will be looking more at climate, human equality, security, maritime and agriculture, among other sectors, so there’s more wiggle room for creativity.
The AGM formally commenced after Gonçalves presentation. Over the course of a half-hour, the board and its guests re-elected board members and the Chairman of the Board, Aoife Healey after discussing the highs and lows of the previous year and the IPBN’s response to the limitations placed upon the globe during the pandemic starting in March 2020. Despite the pandemic, membership increased to 137 members with 58 new members joining coupled with a renewal rate of 75% in 2020. With an increase in grant funding, Arnold Delville was able to accept a full-time role to oversee operations and the IPBN was able to hire Ellis Dixon as its content and marketing manager. IPBN board member and Senior Accountant Pedro Texeira walked attendees through the 2020 budget and balance sheet of the IPBN noting that the IPBN had been able to control costs even during the crisis, which, he said “should give us some comfort for the coming year.” The 20201 budget was then approved.
For the year ahead, the IPBN is committed to adding value by growing member connections, creating hybrid events where possible, launching the IPBN Porto, holding an energy conference, continuing out two existing conferences, and searching for a new Chair of the IPBN Board. We invite all members and guests to reach out with any suggestions so that we can continue to deliver what you need most.
The Ireland Portugal Business Network (IPBN) is delighted to host an important conversation among experts in the hospitality sector for our second panel discussion to better understand the current state of the sector and what evolution is ahead for the future.