PRR | Everything you need to know aboutIFIC

IFIC - New Financial Instrument for Innovation and Competitiveness of the RRP makes €800M available to Companies

The Portuguese business ecosystem has just received a new and significant financial boost with the launch of the Financial Instrument for Innovation and Competitiveness (IFIC), presented on 30 September at the Palácio da Bolsa. Inserted into the reprogramming of the Recovery and Resilience Plan (RRP), this instrument channels over 800 million euros to foster reindustrialisation, digital transition, and innovation in strategic sectors. This article explains everything you need to know about IFIC, detailing its nature, objectives, beneficiaries, eligible expenditure typologies, and the application process, serving as a fundamental guide for companies and stakeholders.

1. What is the Financial Instrument for Innovation and Competitiveness (IFIC)?

IFIC is an incentive system for business innovation, framed within Component 05 of the RRP – Capitalisation and Business Innovation, and created by Ordinance no. 286/2025/1. Managed by Banco Português de Fomento (BPF), this instrument was designed to be an agile and effective mechanism for applying RRP funds, aiming to support projects that promote competitiveness and modernisation in innovative and qualified activities or in research and development processes.

2. Reasons for its creation and strategic framework

The creation of IFIC stems from the need to optimise the execution of the RRP, utilising funds from other programmes that presented a risk of non-execution within the 2026 deadline. IFIC presents two modalities:

RRP IFIC Grants Line: intended to finance the non-repayable payment of up to 40% of the value of projects approved under the RRP. With an allocation of 300 million euros, this line comprises three strategic investment sub-lines:

• "Reindustrialise" Line: aims to support projects that promote the diversification of the industrial base, contribute to increasing the production of high value-added tradable goods and services, and stimulate the link between companies and the scientific and technological system.
• Artificial Intelligence for SMEs: accelerate the adoption of Artificial Intelligence technologies by micro, small, and medium-sized enterprises, with a view to optimising internal processes, increasing operational efficiency, and/or integrating digital technologies in interaction with partners.
• Defence and Security Economy: reinforce the national defence and security industrial and technological base by supporting research and development projects, productive investment, and internationalisation.

RRP IFIC MLP Line: in the medium-long term, this line is intended to finance up to 50% of approved projects through the provision of a bank guarantee.

3. Beneficiaries of the IFIC programme

The eligibility of beneficiaries is segmented according to the support lines, demonstrating a targeted focus of the instrument:

4. Eligible expenses of the IFIC grants line

In general terms, expenses related to productive innovation projects, research and development, qualification and internationalisation, specialised consulting services, and even the hiring of qualified human resources are eligible. In the table below, you can consult in detail the typologies of eligible expenses under each of the lines.

5. Financing rates and amounts of the IFIC grants line

 *Expenses in Consultancy, Qualification, and Internationalisation, applicable only to SMEs

6. Advantages and support modalities

One of the most attractive features of IFIC is its hybrid financing structure, which combines different modalities to adapt to project needs:

• Non-Repayable Grants (Sunk Fund): directed primarily to cover the costs of R&D projects, reducing the financial risk of innovation.
• Repayable Financing (Loans): granted by BPF, can finance non-eligible expenses, offering a solution for the project's total liquidity.

7. Dates and deadlines for application

• "Reindustrialise" Line
  • Phase I – 30/09/2025 to 14/11/2025
  • Phase II – 14/11/2025 to 29/12/2025
• Line for the Defence and Security Economy
  • Phase I – 30/09/2025 to 14/11/2025
  • Phase II – 14/11/2025 to 29/12/2025
• "AI for SMEs" Line
  • Phase I – 30/09/2025 to 31/10/2025
  • Phase II – 31/10/2025 to 28/11/2025

These lines present very short dates for submitting applications, so we advise all companies to anticipate their projects as much as possible.

8. Evaluation criteria and conditions to consider

The assessment of applications is based on three central dimensions: company eligibility, project framework, and application merit, reflected in the selection criteria.

8.1. Company eligibility (beneficiaries)

Beneficiaries are considered eligible if they:

• Are legally constituted and registered.
• Have organised accounting and, when applicable, SME electronic certification issued by IAPMEI.
• Present a regularised tax and contributory situation, as well as repayments to the State.
• Demonstrate adequate technical, financial, and human resources for project execution.
• Reveal financing capacity and economic-financial balance.
• Are not in a situation of a company in difficulty.
• Respect the rules applicable to State Aid.

8.2. Project eligibility

The project must cumulatively meet the following requirements:

• Be framed within the objectives of the Opening Notice for Applications (AAC).
• Have an investment amount between €500,000 and €25 million.
• Start execution after submission of the application and complete it within a maximum period of 24 months.
• Show proven economic-financial viability.
• Comply with the DNSH (Do No Significant Harm) principle, not significantly harming the environment.
• Be in legal compliance with national and European Union legislation.
• Not include investments previously started.
• Be accompanied by a detailed descriptive memorandum, including technical aspects, costs, and scheduling.
• In the case of R&D projects, be supported by independent technical opinions.

8.3. Merit of the application (evaluation criteria)

Project evaluation is carried out based on the following axes:

• Quality and relevance of the project (30%) – high degree of innovation, market potential, and articulation between scientific knowledge and the business fabric.
• Impact on company competitiveness (35%) – direct contribution to strengthening the position of the company and the sector, valuing projects that promote digital and ecological transition, with positive climate and digital impact.
• Contribution to the national economy (35%) – capacity to generate structural effects, promote economic and financial sustainability, and reinforce the company's role in the productive ecosystem.

The final classification results from the formula:

MP = 0.30A + 0.35B + 0.35C

Where A, B, and C correspond to the criteria described above, evaluated on a scale of 1 to 5 points. Only projects that obtain a minimum score of 3 points will be considered eligible. In the event of a tie, priority will be given to the date of submission of the application.

9. Examples of potentially eligible projects

To illustrate the type of projects targeted, we can take as a reference initiatives already funded by Component C5 of the RRP:

Reindustrialise: a manufacturer of components for the automotive industry proposes an investment of five million euros to install a new, fully automated production line for manufacturing battery cases for electric vehicles. The project includes the acquisition of advanced robotics, CNC machining centres, and the implementation of a "digital twin" for process optimisation. This project directly increases the production of a high value-added good and strengthens a strategic industrial sector.

AI in SMEs: a medium-sized logistics company presents a one million euro project to implement an AI-based platform. The platform will optimise delivery routes in real-time (considering traffic and weather), automate warehouse management to reduce picking times, and issue predictive maintenance alerts for its vehicle fleet. This project clearly uses AI to increase operational efficiency and competitiveness.

"Defence and Security Economy" Line: an SME specialising in drone technology proposes a three million euro R&D project to develop a new generation of autonomous drones. The central innovation lies in a proprietary communication system, highly resistant to interference (jamming) for military applications, which can also be used for monitoring critical civil infrastructures, such as power lines or pipelines. This is a classic example of a dual-use project.

10. FAQs - Frequently asked questions

1. What is IFIC?

IFIC – Financial Instrument for Innovation and Competitiveness – is an incentive system framed within Component 05 of the RRP, managed by Banco Português de Fomento. It was designed to support projects that promote innovation, competitiveness, and business modernisation, including R&D activities and digital and ecological transformation.

2. Why was IFIC created?

IFIC emerged to optimise the execution of the RRP, utilising funds that might not be used in other programmes by 2026. Thus, the aim is to ensure an agile and effective application of available funds, reinforcing the impact of the RRP on the Portuguese economy.

3. What are the modalities of IFIC?

IFIC has two modalities:

• RRP IFIC Grants Line – grants non-repayable support up to 80% of eligible investment based on the investment typologies described in point 5 of this article.
• RRP IFIC MLP Line – medium and long-term financing, up to 50% of the investment, through a bank guarantee.

4. What support lines exist within IFIC Grants?

• "Reindustrialise" Line – diversification of the industrial base and increased production of high value-added tradable goods and services.
• "AI for SMEs" Line – promotion of the adoption of Artificial Intelligence solutions by micro, small, and medium-sized enterprises.
• "Defence and Security Economy" Line – reinforcement of the national defence and security industrial and technological base, focusing on R&D, internationalisation, and productive investment.

5. Who can apply for IFIC?

Eligibility depends on the support line:

• Reindustrialise – companies of any size (Large Companies across the Mainland; SMEs only in Lisbon and Algarve).
• AI for SMEs – exclusively SMEs, throughout the territory of Mainland Portugal.
• Defence and Security Economy – companies of any size, throughout the mainland territory.
• IFIC MLP – projects approved under the RRP with recognised merit.

6. What expenses are eligible?

Eligible expenses include:

• Productive innovation projects (new products, services, or processes).
• Research and development (R&D), including the establishment of permanent teams.
• Qualification and internationalisation (certifications, external promotion, organisational processes).
• Consultancy services (studies, audits, marketing plans, engineering).
• Hiring of highly qualified human resources.
• Solutions based on Artificial Intelligence.

7. What is the maximum incentive rate?

• Reindustrialise – up to 80% of eligible investment (investment between €500,000 and €25M). The support rate is calculated based on the investment typologies described in point 5 of this article.
• Defence and Security Economy – up to 80% (investment between €500,000 and €25M). The support rate is calculated based on the investment typologies described in point 5 of this article.
• AI for SMEs – up to 75%.
• IFIC MLP – up to 50%, with a limit of €15M.

8. How are applications evaluated?

The evaluation is based on three dimensions:

• Company eligibility – regularised legal, tax, financial, and organisational situation.
• Project eligibility – framework within AAC objectives, investment amount, execution period (≤ 24 months), financial viability, and compliance with legal and environmental rules.
• Merit of the application – selection criteria:
  • Quality and relevance (30%).
  • Impact on competitiveness (35%).
  • Contribution to the national economy (35%).
  The final score results from the formula: $MP = 0.30A + 0.35B + 0.35C$, requiring at least 3 points to be achieved.

9. What are the deadlines for submitting applications?

• Reindustrialise Line – Phase I: 30/09/2025 to 14/11/2025 | Phase II: 14/11/2025 to 29/12/2025.
• Defence and Security Economy Line – Phase I: 30/09/2025 to 14/11/2025 | Phase II: 14/11/2025 to 29/12/2025.
• AI for SMEs Line – Phase I: 30/09/2025 to 31/10/2025 | Phase II: 31/10/2025 to 28/11/2025.

10. Can you give examples of eligible projects?

• Reindustrialise – installation of advanced production lines for high value-added goods (e.g., components for electric vehicles).
• AI for SMEs – implementation of AI platforms for logistics optimisation and operations management.
• Defence and Security Economy – development of autonomous drones with military and civil applications (e.g., monitoring critical infrastructures).

11. What advantages does IFIC offer compared to other support?

• Combination of non-repayable grants with repayable financing.
• High incentive rate (up to 80% in R&D in some lines).
• Flexibility of eligible expenses.
• Focus on innovation, digital transition, and sustainability.
• Targeted support for different company profiles (SMEs and Large Companies).

11. How to ensure a successful IFIC application

To maximise the chances of success in accessing IFIC, companies must adopt a proactive and strategic approach:

• Act now: deadlines are tight. The time to start structuring the project, drafting the business plan, and preparing financial projections is immediately. The best-prepared companies will have a decisive advantage.
• Focus on alignment: choosing the most suitable support line is the first critical step. Subsequently, the entire application narrative must be meticulously aligned with the specific objectives, evaluation criteria, and language of that line.
• Think like a bank: given BPF's management, the application must be viewed as an "investment-grade" investment proposal. It is imperative to demonstrate not only the technical innovation of the project but also its commercial robustness, financial viability, and expected economic return.
• Plan holistic financing: structure the proposal to take advantage of the instrument's full flexibility. Present a complete financing plan that articulates the grant request for eligible expenses with the use of the complementary loan for non-eligible ones, demonstrating a realistic and integral view of the project.
• Seek specialised support from Yunit: the complexity of the process and the intensity of the competition justify considering support from consultants with proven experience in preparing applications for European funds and structuring business plans.

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Last update: 30 September 2025