State guarantees 70 million to Madeira to refinance debt with ABANCA

The State has granted a personal guarantee of up to 70 million euros for the loan with which the Autonomous Region of Madeira will replace and amortize debt maturing in 2027. The authorization is contained in Order No. 13593/2026, signed on November 4, 2026, by the Secretary of State for the Treasury and Finance, João Alexandre da Silva Lopes, and published in the Diário da República, 2nd series, no. 216, of November 6, 2026, in the Finance section. The guarantee is accompanied by a commission of 0.2% per year, to be borne by the Region.

The measure falls under paragraph 1 of article 38 of Organic Law No. 2/2013, of September 2 (Finance Law of the Autonomous Regions), and article 9 of Regional Legislative Decree No. 8/2025/M, of December 30, which approved the Region’s Budget for 2026. At the national level, the order invokes paragraph 8 of article 62 of Law No. 73-A/2025, of December 30 (State Budget for 2026), and articles 13 and 15 of Law No. 112/97, of September 16, which regulates the State’s personal guarantees.

The executive justifies the operation as an improvement in the management of regional debt and the resulting gains in financial costs, considering it of “manifest interest to the national economy.” The process was instructed by the Treasury and Finance Entity, with a prior hearing from the Treasury and Public Debt Management Agency — IGCP, E. P. E.

Seventy million in three drawdown requests

The technical sheet attached to the order identifies ABANCA Portugal, SA as the lender, and the Autonomous Region of Madeira as the borrower, in a loan in the form of a mutual loan of €70,000,000.00 (seventy million euros). The State guarantee is provided by the Portuguese Republic, with a maximum limit corresponding to the value of the contract.

The funds are not withdrawn all at once. Utilization will be made through requests by the borrower, with minimum amounts staggered throughout 2027:

• €14,000,000.00 (fourteen million euros) in January 2027;
• €40,000,000.00 (forty million euros) in May 2027;
• €16,000,000.00 (sixteen million euros) in November 2027.

The loan term is 186 months from the date of the contract, with semi-annual and arrears interest payments.

Fixed rate in the first months and long repayment term

The interest rate is fixed at 3.265% during the first 12 months. From then on, it becomes indexed to the 6-month EURIBOR, with a floor of 0%, resulting from the simple arithmetic average of the daily quotations of the previous month, plus a spread of 29 basis points.

The repayment is structured in four constant and successive annual installments. The first falls due 12 years and 6 months after the contract date, and the remaining ones on the same day of each subsequent year—a profile that pushes the start of capital amortization to after 2039, should the contract be signed in 2027.

Contingent risk for public accounts

The guarantee does not constitute direct public debt at the time of signing, but it creates a contingent risk: if the Region fails to meet the debt service, the State is liable to ABANCA Portugal, SA. The consideration charged is a commission of 0.2% per year, a reduced revenue relative to the exposed amount.

The decree does not specify the nominal value or the schedule of the previous loans that will be replaced, merely stating that they were contracted by reclassified public companies of the Region and by the Autonomous Region of Madeira itself. This lack of detail, combined with the 186-month term, leaves the budgetary scrutiny with the task of assessing the effective savings compared to the cost of the guarantee and the risk profile of the operation. The order takes effect on the date of signing and does not require a visa from the Court of Auditors for the granting of the guarantee, which is granted under the “strict terms and conditions” of the attached technical sheet.

For readers, the essential point is this: the State once again assumes, albeit contingently, the debt of an autonomous region, this time with a horizon of 15 and a half years and a maximum exposure of 70 million euros, which will only be fully known when the three utilization requests of 2027 are executed.

Source: Diário da República, 2nd series, no. 216, of November 6, 2026, Finance section (official reference: Despacho n.º 13593/2026).