Portugal's government approved a €2.5 billion recovery package to help households and businesses rebuild after Storm Kristin, which brought winds above 200 km/h and killed at least six people. The package includes €1 billion in reconstruction loans for uninsured factories, a €500 million facility for business cash-flow support and €1 billion for homeowner aid and social subsidies. Reconstruction work will be fast-tracked by exempting certain licensing and approval requirements, and a state of calamity has been extended in about 60 municipalities.
Portugal Approves €2.5 Billion Recovery Package After Devastating Storm Kristin
Portuguese Prime Minister Luis Montenegro arrives for the Coalition of the Willing summit at the Elysee Palace in Paris, France January 6, 2026. YOAN VALAT/Pool via REUTERS
Lisbon, Feb. 1 — Portugal's government on Sunday approved a €2.5 billion recovery package to help households and businesses rebuild after Storm Kristin ravaged central mainland Portugal, Prime Minister Luis Montenegro said.
The storm struck early on Wednesday, producing wind gusts above 200 km/h (124 mph) and heavy rain that authorities say killed at least six people. The extreme weather damaged homes, factories and public infrastructure and left hundreds of thousands without power.
Financial support and relief measures
State-owned Banco de Fomento will roll out a €1 billion loan programme to rebuild uninsured factories damaged by the storm, alongside a €500 million financing facility to help companies address immediate cash-flow pressures. The remaining €1 billion in aid includes a credit line to support reconstruction of uninsured primary homes — providing up to €10,000 per house — and social security subsidies for those facing hardship or income loss, of up to €537 per month for individuals or €1,075 per month for families.
Regulatory fast-track and emergency powers
Given the "current exceptional circumstances," the government said reconstruction work will be exempt from licensing and from prior urban planning, environmental and administrative approvals to speed rebuilding. The Cabinet also extended the "state of calamity" in about 60 hardest-hit municipalities until Feb. 8 — Portugal's highest civil-protection alert — enabling authorities to mobilise emergency and armed forces, fast-track procurement and restrict access to affected areas without curtailing constitutional rights.
Recovery operations under way
Grid operator REN and distributor E-Redes reported nearly 180,000 households remained without electricity on Sunday as crews worked to restore power. Montenegro said the government was "mobilising all our resources to manage the emergency responsibly, but also with hope... once again, we will rebuild Portugal."
($1 = 0.8440 euros)
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