Algarve Desalination Project: A Lucky Break as Funding Shifts to Portugal 2030

Minister's Remarks on the Algarve Desalination Project

Manuel Castro Almeida, the Minister for Territorial Cohesion, stated that it was a stroke of luck for the Algarve desalination project to exit the Recovery and Resilience Plan (PRR). He explained that the project was underfunded under the PRR, and with the transition to Portugal 2030, it will now receive the appropriate funding it requires.

Funding and Future Execution

During a parliamentary committee meeting, Castro Almeida reassured members that the absence of certain investments from the PRR does not imply that projects will be halted. The desalination project, now under PT2030, will not only secure a higher percentage of funding eligible from European funds but will also benefit from a longer execution timeline.

However, the decision has raised concerns among parliament members, as €224.4 million will be drawn from water management, affecting projects like the Pisão Dam and the Algarve desalination plant, which must seek alternative funding sources.

Financial Implications and Environmental Concerns

The Pisão Dam will now be financed through Portugal 2030 and the State Budget, while other projects will rely on the Sustainable 2030 initiative. The Algarve's water projects under the PRR amount to about €120 million, but PT2030 has only allocated €66 million for such projects, which are already fully committed.

Castro Almeida highlighted that the PRR previously covered only 50% of project costs, whereas PT2030 will now cover 65%, saving the state an additional €15 million for the desalination plant.

Housing Project Adjustments

In a related matter, 3,300 affordable housing units were removed from the PRR due to delays, leaving only 3,500 out of an initially planned 6,800 homes. The remaining homes will be financed through a loan from the European Investment Bank (EIB). Castro Almeida asserted that the government remains committed to fulfilling a previous commitment to construct 26,000 homes under the PRR, aiming to extend this to 33,000 by 2030.

Challenges in Construction

The minister noted significant challenges in construction, particularly with labor shortages, making it difficult to meet project deadlines. He emphasized the urgency to equip facilities with state-of-the-art technology as part of the overall investment strategy.

Ongoing Developments

The Secretary of State for Regional Development is set to visit the Pisão Dam to demonstrate the government's commitment to the project, which has already met two milestones under the PRR. Castro Almeida acknowledged that while some projects are being reprogrammed, not all can proceed, citing potential environmental impacts that need to be assessed before funding is finalized.