PORTUGAL Trends and Developments Contributed by: Rodrigo Formigal, João Diogo Barbosa and António Kreiseler de Albuquerque, Abreu Advogados
data disclosure templates for NPL transac - tions, servicers will, among other things, have to ensure that the assignment remains neutral to the borrower, as well as comply with a set of information duties vis-à-vis the borrower. In turn, purchasers will be required to appoint a credit institution or an authorised servicer to perform servicing activities in respect of consumer loans. Large-Scale Public Works In 2025, Portugal’s banking sector stands to benefit from a range of ambitious public infra - structure investments, particularly in transporta - tion, healthcare, and sustainability. A major focus is the construction of a high-speed rail network connecting Lisbon and Porto, which will improve regional connectivity and economic integration. The long-anticipated development of a new Lis - bon airport at Montijo aims to expand air travel capacity, boosting both passenger and cargo traffic. Urban mobility is also being prioritised, with significant expansions to the subway sys - tems in Lisbon and Porto to reduce conges - tion and enhance public transport efficiency. In healthcare, key projects include the expansion of Hospital Central do Algarve and new healthcare facilities in major cities like Lisbon and Porto. In addition to these developments, Portugal is heavily investing in renewable energy infrastruc - ture, such as offshore wind farms and solar ener - gy parks, particularly in the Alentejo and Algarve regions. These projects align with the country’s push for green energy and sustainability, creat - ing new opportunities for banks in sustainability linked and green finance. Urban regeneration, including the revitalisation of Lisbon’s waterfront and the creation of business hubs in Porto, is also expected to attract significant investment. While road infrastructure expansion has been de-emphasised, efforts are focused on improv - ing traffic flow and safety through smart technol -
ogies rather than expanding highways. This shift toward sustainable transport and infrastructure offers considerable financing opportunities for the banking sector, aligning with broader Euro - pean climate goals and enhancing Portugal’s long-term economic competitiveness. Diversifying Sources of Funding Another major driver of legislative changes in the Portuguese financial landscape has been the need to facilitate access to alternative sources of financing, especially for SMEs, so as to reduce their indebtedness and dependency on banks. Traditional bank loans remain the most relevant source of financing for businesses in Portugal (around 42%), while the total amount of loans is averaging 80% of the country’s GDP. Participating loans were introduced in 2022 as a form of hybrid (or quasi-equity) funding. In a nut - shell, participating loans are remunerated and/ or repaid based on the borrower’s results and any outstanding amounts may be converted into equity, notably upon default. Loan funds were also introduced into Portu - guese law as a subtype of alternative invest - ment funds (AIFs). These funds are expressly authorised to originate loans, to participate in loan syndicates or to acquire loans originated by banks (performing or non-performing). Cer - tain changes will be in place with the transposal of the Alternative Investment Fund Managers Directive 2 (AIFMD2), notably with the introduc - tion of a “loan issuance passport” for EU loan- originating AIFs. It will be interesting to see how these – and other – alternative types of lending will play out in 2025 within the general financing landscape. Although some forms of alternate lending have been vis - ible, credit granting in Portugal remains a strictly
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