European Commission Approves Creation of New National Development Bank in Portugal
Plans to set up a new national development bank to promote the growth of the Portuguese economy have been approved by the European Commission, under EU State aid rules. Banco Português de Fomento (BPF) will be created through the merger of the Instituição Financeira de Desenvolvimento and PME Investimentos. The resultant entity SPGM, will rename itself the Banco Português de Fomento upon completion of the merger.
With a share capital of €255 million, BPF will be owned by the Portuguese State. Its activities will target market failures in both lending and capital markets. BPF's mission will be to improve access to finance for research & innovation projects, social investment, sustainable infrastructure and skills. It will also look to encourage investments by the public sector and improve the competitiveness of Portuguese companies.
The European Commission considered the creation of BPF to be the ideal finance creation solution for businesses and projects that would otherwise remain underfunded were markets to fail. The green light for the merger was given upon the condition that BPF agreed to implement measures to ensure that it did not push out private financiers in contravention of EU State aid rules.
* More information will be available on the European Commission website
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