The European Investment Bank (EIB) has approved the first tranche of a € 1,5 billion loan to Portuguese authorities to support investments in key infrastructure projects in the country.

Co-financed by the European Union (EU), the EIB is lending an initial € 450 million to help Portugal meet the objectives of its National Strategic Reference Framework - an EU-supported initiative which began in 2007 and will run until 2013.

According to the EIB, the loan will mainly focus on small and medium-sized investment schemes of less than € 50 million across Portugal.

EIB president Philippe Maystadt said the loan signals the bank's commitment to assisting EU member states "in times of a challenging economic and financial environment".

"This loan, earmarked to co-finance projects also supported by EU Structural Funds, will reinforce the Bank's contribution to economic growth through financing of valuable projects," Mr Maystadt added.

The money will be allocated to projects in the sectors including research and development, information and communication technologies, transport, water, solid waste, energy efficiency and renewable energy, urban regeneration, health, education and culture.

"The loan will contribute to the balanced development of all Portuguese regions and will have a significant impact on local employment and SME activity," the EIB said.

EIB - the EU's long-term financing institution - started supporting the Portuguese economy prior to the country's adhesion to the European Communities in 1986.

To date, EIB loans for projects in Portugal have topped € 35 billion, of which € 8 billion was handed out between 2007 and 2009, a period which saw lending grow by more than +150%, according to the bank.

This year alone, EIB's total lending activity in Portugal is expected to reach approximately € 3,3 billion in new loans. The EIB said these agreements had been signed with "numerous partners in the public sector", including municipalities.

Portuguese Minister of State and Finance Fernando Teixeira dos Santos described the EIB's intervention in Portugal as having "a very relevant impact".

"I am certain that this financing will strongly contribute to the growth strategy of the country towards a more developed society," he added.

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