Additional 75 million Euros to finance distinctive Tourism projects
Companies in the Tourism sector will continue to have access to the “Linha de Apoio à Qualificação da Oferta 2017”, a line of credit to bolster the Tourism sector, which has over 75 million Euros available, following the Protocol renewed today between Turismo de Portugal, 12 banking institutions and Portugal Ventures.
After just one year, following the announcement of the line of credit for the Tourism sector "Linha de Apoio à Qualificação da Oferta", 83 operations have already been approved, with a total associated investment of 133 million Euros and approved financing of 65 million Euros. A further 28 operations are still under assessment, with an associated investment of approximately 32 million Euros. This means that, in just a year the estimated budget has been exceeded. Given the excellent performance of the line of credit, and the huge impact it has had on investment, the budget will see an additional 75 million Euros added to it.
The purpose of the renewal of the line of credit dedicated to the Tourism sector “Linha de Apoio à Qualificação da Oferta” is to strengthen the existing partnership between Turismo de Portugal and the financial market, aimed at ensuring that companies operating in the Tourism sector have access to financing with appropriate periods and pricing to suit their needs, especially medium and long-term funding, thus improving their relationship with the financial market.
This instrument, uniquely designed in the current context of investment support, now takes on a broader scope, and involves new priorities for strategic operation, in accordance with current industry needs and those of the companies.
Chairman of Turismo de Portugal, Luis Araújo, says “We hope that this line of credit once again favours projects that, due to their characteristics, contribute to the promotion of tourism in urban centres, prioritise the enjoyment of our tangible cultural heritage and urban redevelopment, and translate into new tourism businesses, namely in the area of tourism animation, that are energy-efficient and environmentally sustainable, and which contribute to a longer average stay of tourists and a reduction in seasonality. The success of the results achieved in 2016 is a determinant factor for us to continue to invest in these types of instruments that support entrepreneurship in the sector", he adds.
The new line of credit has a venture capital component, should companies require it. Celso Guedes de Carvalho, CEO of Portugal Ventures, stresses that “the partnership established today will enable companies to have access to venture capital, at a time when the exponential growth of tourism in Portugal is creating opportunities for growth and drives the creation of new businesses”. “Companies will be able to benefit from Portugal Ventures’ experience and its network of contacts, which already has 19 companies from the Tourism sector in its portfolio. We will contribute up to 35% of the investment amount and will accompany the projects invested in by promoting, in particular, synergies between portfolio companies”, he explains.
Overall financing may reach up to 75% of the investment amount, with the possibility of a maximum repayment term of 15 years, including a 4-year grace period, where, as a rule, 60% of said financing is done by Turismo de Portugal, I.P. and 40% by the Bank (in specific cases, such as entrepreneurship projects, Turismo de Portugal, I.P.’s participation shall be 75%, and the Bank’s shall be 25%). The financing by Turismo de Portugal, I.P., does not incur any interest, generally, whilst the financing by the Bank incurs interest agreed upon with the company.
Another new feature is the allocation of a performance bonus for projects located in the interior of the country, in line with the National Programme for Territorial Cohesion, approved by Council of Ministers Resolution no. 72/2016, of 20 October, thus aiming at boosting investments to be made in the interior of the country and, finally, simplifying the assessment and decision-making process of applications for financing.
Tourism Growth VCF, and the main innovations of this new protocol
The Tourism Growth Venture Capital Fund is a new financial instrument, created as a result of a partnership between Turismo de Portugal and Portugal Ventures, which has an indicative capital of 15 million Euros and aims at creating conditions for the diversification of the funding sources for existing companies, this time using equity instruments.
Note: The group of credit institutions which have adhered to this line of credit include Millennium BCP, Novo Banco, Santander Totta, Banco BPI, Caixa Geral de Depósitos, Banco Popular, Montepio Geral, Caixa de Crédito Agrícola Mútuo, Abanca, Banco Português de Gestão, Banco BIC and Novo Banco Açores.
About Turismo de Portugal
Under the aegis of the Ministry of Economy, Turismo de Portugal is the National Tourism Authority responsible for the promotion, enhancement and sustainability of tourist activity, bringing together all institutional competences related to the stimulation of tourism, from supply to demand, in a single entity. With its privileged relationship with the other public entities and economic agents both domestically and abroad, Turismo de Portugal is committed to fulfilling its objective to reinforce tourism as one of the country's main drivers of economic growth.
About Portugal Ventures
Portugal Ventures is a public venture capital firm which focuses its investment policy on innovative scientific and tech-based projects, and on companies that have projects for international expansion. It operates in the Digital, Engineering & Manufacturing, Tourism and Life Sciences sectors and manages funds in the amount of approximately 400 million Euros.