Faro's city council has scrapped a €16.42 million bank loan it never touched — and is going back to the market for a slimmer €14 million package aimed at five municipal projects, several of which will shape how visitors experience the Algarve capital.
The story is a bit of municipal housekeeping with real consequences. The original loan, approved in 2023 and signed off by Portugal's Court of Auditors in February 2024, was meant to fund four big-ticket items: a €3.3 million revamp of Faro's downtown central axis, an €8.5 million extension of the Porta Nova port infrastructure, a €2.4 million roundabout at Pontes de Marchil, and the €2.22 million Faro–Olhão stretch of the Ecovia do Litoral, the coastal path linking towns along the Ria Formosa.
None of the money was ever drawn down. The council had until February 2027 to spend it, but the projects stalled: the downtown and roundabout designs needed corrections, the port extension couldn't meet conditions set in external opinions, and the ecovia tender went unanswered — partly because the municipality hadn't yet secured all the land along the route. Rather than keep a dormant loan on the books, councillors voted to cancel it, with the four Socialist members in favour and the three PSD councillors abstaining. An earlier version of the deal was rejected in September, and the revised package now adds the Pontes de Marchil roundabout back into the mix.
The new borrowing plan shuffles the priorities and updates costs for inflation. The largest slice — about €5.18 million, more than a third of the total — goes to redeveloping the Bairro Ribeirinho, the riverside neighbourhood near the old town and marina. The Faro–Olhão ecovia gets roughly €3.95 million, the roundabout about €3.06 million, Largo Francisco Sá Carneiro €768,306, and the Penha football ground expansion just over €1 million. Before any of it happens, the loan needs the green light from the Faro Municipal Assembly.
For travellers, the most interesting thread here is the ecovia. When finished, the Faro–Olhão section will make it far easier to cycle or walk between the two cities along the water's edge of the Ria Formosa Natural Park — a genuinely lovely, flat route that pairs well with boat trips to the barrier islands. The Bairro Ribeirinho and Largo Francisco Sá Carneiro works should also tidy up the area most visitors wander through between the marina, the old town and the waterfront cafes. The flip side: with the projects only now being refinanced, expect works rather than finished results in the near term. If you're heading to Faro soon, the current attractions remain the classics — the old town inside the medieval walls, boat transfers to Ilha Deserta and Culatra, and Portugal's skull chapel at the Capela dos Ossos.
