The objectives are included in the Medium-Term Debt Strategy 2024-2026, approved by Presidential Decree 52/24, to which Lusa had access, which aims to guide the executive in contracting new financing and managing the debt portfolio.
According to the document, the strategy for the next three-year period 2024-2026 gives priority in terms of external debt to attracting semi-concessional financing (loans within the scope of development aid with longer terms and lower interest rates) with the aim of "improving the cost and maturity of the debt".
Between January 2022 and June 2023, new concessional disbursements represented 25 percent of total disbursements and were made exclusively with the World Bank, according to the executive's data.
The strategy also involves "not engaging in financing based on 'commodity' collateralization", that is, not taking on debt in exchange for oil, and limiting the concentration of debt service in the short and medium term (up to two years).
"In this area, actions must be implemented to guarantee the reduction of the concentration of debt service, in the next economic years, so that it does not have a weight on total expenditure exceeding 45 percent", compared to the current 63 percent, according to the document.
To achieve this goal, "the level of expenditure cannot be aggravated by contracting new financing" and all financial slack resulting from liability management" must serve to strengthen the treasury position and additional fiscal expenditure can only be covered through of ordinary income.
It is also intended "to smooth the current debt maturity profile" to favor the contracting of external financing with longer repayment terms, between 15 and 20 years, with the maturity term "being accompanied by a grace period of, at least least five years."
The strategy also foresees a greater balance between internal and external financing, avoiding external financing of public investment projects, whose object of the commercial contract is essentially local content and where there is technical capacity by companies and financial capacity by local banks, for execution of the project".
