Recovery and Resilience Plan (RRP)
To tackle the serious economic and social impacts in the European Union caused by COVID-19, the European Council created Next Generation EU, a temporary recovery instrument that will mobilize funds in the order of 750 billion euros. These funds will be used to develop the Recovery and Resilience Mechanism, which will incorporate Portugal's Recovery and Resilience Plan (PRR).
Portugal's Recovery and Resilience Plan provides for nationwide implementation of an innovative mechanism created directly by Brussels. It amounts to approximately 13.9 billion euros in grants and 2.7 billion euros in loans and will remain in effect between 2021 and 2026. These figures may see an additional 2.3 billion euros, depending on the demand generated by companies. This scenario will be evaluated in the second half of 2022.
The RRP aims to be an instrument that is capable of triggering structural transformation with strong reformist impact in its response to the effects of the pandemic crisis. Accordingly, it is organized into three structural dimensions: Resilience, Climate Transition, and Digital Transition.
Structural dimensions and components of the Portuguese RRP
|RESILIENCE||CLIMATE TRANSITION||DIGITAL TRANSITION|
9 components aimed at stimulating a significant, inclusive and lasting recovery, and in which some of the following projects are included:
- National Health Service - SNS (1,383 million euros): Including notably "Primary Health Care with more answers", to which around 466 million Euros will be allocated;
- Culture (243 million euros): "Cultural Networks and Digital Transition", with 93 million euros, and "Cultural Heritage", with 150 million euros;
- Social Responses (833 million euros): In which we highlight investments under "New Generation of Social Infrastructure and Responses", which encompasses 417 million euros;
- Housing (2,733 million euros): Where the investment "Program of support for access to housing" stands out with an allocation of 1,211 million Euros;
- Capitalization and Business Innovation (2,914 million euros): Including in particular investment under "Mobilizing Agendas/Alliances for Business Innovation" and "Green Agendas/Alliances for Business Innovation", with an estimated value of 558 and 372 million euros, respectively;
- Infrastructure (690 million euros): Highlighting in particular the investments "Areas for Business Hosting (AAE)" and "Road Accessibilities", to which 110 and 142 million euros will be allocated, respectively;
- Qualifications and Skills (1,324 million euros): With a high level of investment targeting "Modernization of the supply and of the educational and vocational training establishments", with 710 million euros;
- Forests (615 million euros): With a central focus on "Landscape Transformation of Vulnerable Forest Territories", for which 270 million euros are earmarked;
- Water Management (390 million euros): Where the “Regional Water Efficiency Plan of the Algarve” stands out, with 200 million euros.
Components and Investments of the Resilience dimension
The Resilience dimension is associated with an increase in the capacity to react to crises and to overcome the current and future challenges associated with them. This dimension appears to promote a transformative, lasting, fair, sustainable, and inclusive recovery, being understood in the RRP context in all its aspects: social resilience, economic and productive fabric resilience, and territorial resilience.
In the Resilience dimension, 9 Components were considered in order to reinforce the social, economic, and territorial resilience of Portugal. These components include a robust set of interventions in strategic areas, namely health, housing, social responses, culture, innovative business investment, skills and competences, infrastructure, woodlands, and water management.
- create 34 new mobile primary care units to cover low-density regions;
- expand the National Network of Integrated Continuous Care with 5,500 new inpatient beds;
- expand the National Palliative Care Network, with 400 less complex inpatient beds;
- upgrade or adapt 326 buildings to increase energy efficiency, comply with contingency plans, and/or ensure accessibility, safety, and comfort for users and professionals;
- expand the network of equipment and social responses for children, elderly people, and people with disabilities (28,000 places in social responses);
- support 26,000 households with decent housing;
- reach a volume of exports equivalent to 50% of GDP by 2027 and 53% of GDP by 2030, focusing on increasing the technological payment balance;
- create 15,000 new skilled jobs and increase spending (public and private) on R&D to at least 2% of GDP by 2025.
Composed of 6 components and seeking to provide for the creation of more wealth with lower greenhouse gas emissions and less energy consumption, including projects such as:
- Sustainable Mobility (967 million euros): Highlights of which include the "Expansion of the Lisbon Metro Network - Red Line to Alcântara" and "Expansion of the Porto Metro Network - Casa da Música - Santo Ovídio", which involve an investment of 304 million and 299 million euros, respectively;
- Sea (252 million euros): 112 million Euros (almost half of the component's funding) will be allocated to the "Atlantic Defense Operations Center and Naval Platform";
- Industry Decarbonization (715 million euros);
- Sustainable Bioeconomy (€145 million);
- Energy Efficiency of Buildings (610 million euros): The largest investment of which is for "Energy Efficiency in Residential Buildings", with 300 million euros;
- Hydrogen and Renewables (370 million euros): Half of the allocation for which will be earmarked for “Hydrogen and renewable gases”, with 185 million euros.
Components and Investments of the Climate Transition dimension
The Climate Transition dimension encompasses 6 components focused globally on reducing carbon emissions from the largest sectors (mobility, industry, sea, and built heritage), as well as incorporating more energy from renewable sources.
Effectively, this dimension accounts for 18% of the total amount of the RRP and takes the form of 6 components—8 reforms and 17 structural investments, representing 3.059 billion euros allocated.
- contribute to reducing CO2 emissions by 55% by 2030, in line with the National Energy and Climate Plan 2021-2030 (PNEC 2030) and the Roadmap for Carbon Neutrality;
- support the creation of a Hub with a network of 7 blue bioeconomy centers;
- offer wide-reaching support for renovations of residential, public, and service buildings;
- support the acquisition of clean public transport fleets (roadways - 145 buses) and respective charging/fueling stations;
- distribute 100,000 vouchers to support efficient energy solutions to families facing energy poverty.
It aims to enable digitalization and ensure that Portugal accelerates its transition to a more digitized economy and society. We find the following projects across 5 components:
- Digital School (559 million euros): which is essentially focused on the “Digital Transition in Education”, with 500 million euros;
- Quality and Sustainability of Public Finances (406 million euros): Where around half of funds will be directed to the “Digital Transition of Social Security”, 200 million euros;
- Business 4.0 (650 million euros): With a high investment in the “Digital Transition of Companies” through #an endowment of 450 million euros;
- Economic Justice and Business Environment (267 million euros);
- Public Administration - Digitization, Interoperability and Cybersecurity (578 million euros): Where the "Reformulation of the public and consular services", with an allocation of 188 million euros, stands out.
Components and Investments of the Digital Transition dimension
The Digital Transition dimension contains significant reforms and investments for the digitization of companies and the state, as well as for providing digital skills in education, health, culture, and forest management.
To ensure that Portugal accelerates the transition to a more digitalized society, the national options in the RRP are based on 5 components in the following areas: digital empowerment and inclusion of people through education, training in digital skills and promotion of digital literacy, digital transformation of the business sector, and digitization of the State.
Measures to support digital objectives amount to 22% of the plan's total allocation, exceeding the 20% threshold defined by European regulations: 12 of the 20 components of the RRP have a direct digital contribution target.
- train 800 thousand people in digital skills with individual training plans and access to online training;
- promote the digital transition of companies, retraining 36,000 workers and supporting 30,000 SMEs;
- purchase 600,000 personal computers for use in schools (students and teachers).
Please also note:
In addition to the aid allocated directly to Companies, indirect support from public initiatives and contracting is a further source of aid.
The projects to be submitted by Companies must offer a strong, differential impact on the economy and society.
Collaboration among Companies and between the Public and Private sectors will be crucial to maximize fundraising.
This stimulus in favor of long-term sustainable growth of the Portuguese economy responds simultaneously to the European priority of the double transition to a more ecological and more digital society, which are the main drivers behind the economic and social recovery of the European economy.
After the presentation of the draft of the national Recovery and Resilience Plan in October 2020, followed by the public consultation period held in March this of year, the phase dedicated to providing clarifications and consequent negotiations is currently underway with a view to implement the Plan over the next few months.
In order to accompany our customers from day one as they navigate this context of economic recovery, BBVA is reinforcing its value offer based around four major axes:
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