The European Commission has approved, under EU State aid rules, Portuguese plans to set up a new national development bank, “Banco Português de Fomento” (“BPF”), to promote the growth of the Portuguese economy. BPF will result from the merger between the existing Instituição Financeira de Desenvolvimento and PME Investimentos into SPGM, which will rename itself BPF following the merger. BPF will be owned by the Portuguese State with a share capital of €255 million and BPF’s activities will target market failures in lending and capital markets. Concretely, BPF will focus on improving access to finance for projects in research and innovation, sustainable infrastructure, social investment and skills as well as projects increasing the competitiveness of Portuguese companies and encouraging investments by the public sector. The Commission found that the creation of BPF is an appropriate and proportionate solution to provide additional financing to companies and projects that would otherwise remain underfinanced because of market failures. Furthermore, BPF will implement safeguards to ensure that the State-supported institution does not crowd out private financial institutions. On this basis, the Commission concluded that the measure is in line with EU State aid rules, in particular Article 107(3)(c) of the Treaty on the Functioning of the European Union (TFEU), which enables the Commission to approve State aid measures implemented by Member States to facilitate the development of certain economic activities or of certain economic areas, subject to certain conditions. More information will be available on the Commission’s competition website, in the public case register, under the case number SA.55719.