In a shocking development, Portuguese Prime Minister Antonio Costa has stepped down following allegations of corruption in the awarding of energy-related contracts. The investigation, led by public prosecutors, delves into accusations of “misuse of funds, active and passive corruption by political figures, and influence peddling.”

Costa faces independent scrutiny for allegedly expediting licenses for lithium exploration and hydrogen production. At a press conference, he stated, “The duties of the prime minister are not compatible with any suspicion of my integrity,” announcing his resignation.

Portugal’s President Marcelo Rebelo de Sousa accepted the resignation and called for a meeting of parliamentary parties to discuss organising an early election. The dissolution of parliament requires a convening of the Council of State, involving senior politicians and former presidents.

Earlier on Tuesday, reports surfaced of searches in ministries, Costa’s offices, and residences. Infrastructure Minister Joao Galamba was indicted, and an arrest warrant was issued for Costa’s chief of staff. The investigation spans lithium mining concessions, hydrogen production, and a data centre project in Sines.

Arrest warrants extended to the mayor of Sines, two Start Campus executives, and the president of the APA, the environmental protection agency. The controversy also involves approved lithium mining projects, opposed by environmental groups and locals.

Costa’s popularity had already waned due to various scandals, including ‘TAPgate,’ a controversy surrounding the national airline TAP. The scandal led to numerous resignations, with ministers and secretaries of state leaving their posts.

Costa, a member of Portugal’s Socialist Party, has been prime minister since 2015, recently re-elected in January 2022.