The European Commission today disbursed 157 million euros in the form of pre-financing for Cyprus. The amount corresponds to 13% of the component of grants and loans of the country's financial envelope. The payment of pre-financing under the Recovery and Resilience Facility (RRF) will help launch the implementation of the critical investment and reform measures outlined in the Cyprus Recovery and Sustainability Plan.
The Commission will approve further disbursements based on the implementation of the investments and reforms outlined in the Cyprus Recovery and Sustainability Plan. The country is expected to receive a total of 1.2 billion euros throughout its project, of which 1 billion euros in grants and 200m euros in loans.
The current disbursement takes place after the recent successful implementation of the first borrowing operations under NextGenerationEU. By the end of the year, the Commission intends to raise up to € 80 billion in long-term funding, which will be complemented by short-term EU bonds to finance the first planned disbursements to Member States under NextGenerationEU.
Under the RRF mechanism, which is part of NextGenerationEU, € 723.8 billion (in current prices) will be allocated to support investment and reform in all Member States. The Cyprus plan is part of the unprecedented EU measures in order to emerge even stronger from the COVID-19 crisis, promoting the green and digital transition and strengthening resilience and cohesion in our societies.
Support for transformational investments and reform projects
In Cyprus, the RRF mechanism is used to finance investments and reforms that are expected to have a profoundly transformative impact on the Cypriot economy and society. Some of the funded projects are the following:
- Ensuring the green transition: The Cyprus plan envisages investments of € 89 million in energy efficiency and renewable energy, € 87 million in promoting sustainable and green mobility and € 19 million in upgrading the country's capacity to fire hazards, ie in the purchase of firefighting aircraft, vehicles and equipment and the provision of relevant training.
- Support for the digital transition : The plan envisages an investment of EUR 133 million in the digitization of public services to create a secure, integrated and modern digital architecture to support the transition to digital public services. It also envisages investments of € 87 million in improving access to communication infrastructure and supporting participatory digital transformation.
- Strengthening economic and social resilience: The plan envisages investments of € 51 million in improving the quality of education and training through the reform of the teaching profession and secondary school curricula, the introduction of modern vocational education and the creation of a system of monitoring higher education graduates. It also provides for the withholding of withholding tax on outgoing payments to non-cooperative jurisdictions and low-tax jurisdictions on the relevant EU list, as well as other measures to curb aggressive tax planning.
Members of the Commission made the following statements:
President Ursula von der Leyen said: “Today, the first disbursement 157 million Euros from NextGenerationEU to Cyprus is an important milestone. It is the first step in implementing the investments and reforms included in Cyprus' recovery and resilience plan. These measures will contribute to achieving the digital and green transition of Cyprus through the support of energy efficiency, sustainable mobility, education and training and the improvement of connectivity. I am particularly proud of the fact that a significant part of the funds will be used to protect Cyprus from the threat of forest fires. I wish you every success in implementing the recovery and resilience plan. “
Johannes Hahn , Commissioner for Budget and Administration, said: “After three highly successful NextGenerationEU bond issues in recent weeks and the first payments for other NextGenerationEU programs, I am pleased to have reached the disbursement stage for the RRF . The intensive cooperation with Cyprus and the very good preparation on the part of the Commission allowed us to disburse the funds in record time. “This shows that, with the resources we will raise, we will be able to respond quickly to the pre-financing needs of all Member States, thus giving the initial impetus to the implementation of the numerous green and digital projects included in their national plans.”
Economy Commissioner Paolo Gentiloni said: “This pre-financing of 157 million euro corresponds to the first part of a total of 1.2 billion Euros to be allocated by the EU to support Cyprus through the Recovery and Durability Mechanism. These funds will help Cyprus implement important measures on climate change and address the threat of forest fires, boost its digital competitiveness and boost education and training. “I also welcome Cyprus' commitments to limit the possibilities of aggressive tax planning.”
For more information
Questions and Answers: The European Commission approves the Cyprus plan
Recovery and resilience mechanism: Questions and answers
Newsletter: Cyprus recovery and resilience plan
Newsletter for the recovery and resilience plan of Cyprus
Commission staff working paper: Analysis of the Cyprus recovery and resilience plan
Recovery and durability mechanism
Regulation for the recovery and durability mechanism
Press release: NextGenerationEU third bond
Press release: First Commission financing plan
EU website as a borrower
Announcement of the Ministry of Finance
The Minister of Finance, Mr. Konstantinos Petridis, welcomes today's announcement of the European Commission for payment in Cyprus, amounting to € 156.8m. from the European Fund for Recovery and Sustainability.
Cyprus has secured through the Recovery and Sustainability Mechanism € 1.2 billion to finance the ” Cyprus – Tomorrow” Plan with a horizon of implementation in 2026. The completion of the process of signing the Financing and Loan Agreements with the European Commission in August, allowed today the disbursement of the advance payment (13%) of the total amount of € 156.8m.
The implementation of the Plan has already started and the involved Bodies are proceeding with the implementation of the investment projects and reforms. The Plan includes a coherent package of 133 meters, 58 reforms and 75 investments.
The Minister thanked the European Commission for the close cooperation, the parliamentary parties and the social partners for the proposals they submitted for inclusion in the Plan, but especially for their constructive attitude in the preparation and submission of the Plan in May 2021.
The Minister further calls on the House of Representatives to mobilize for the implementation of the reforms, for the successful implementation of the Plan and the disbursement of all available resources for the good of our Cyprus, the economy and the citizens.
Announcement by the Presidency of the Republic:
Today is a historic day for our country. The President of the European Commission, Ms. Ursula von der Leyen, announced the disbursement of the first tranche from the European Union Recovery and Sustainability Fund.
This is 157 million Euros which are granted in the form of pre-financing. The amount corresponds to 13% of the component of grants and loans of the total financing corresponding to the country.
The first tranche will be used to finance investments and reforms that are expected to have a profound transformative impact on the economy and society of Cyprus.
Specifically, it will be used to take energy efficiency measures, for renewable energy sources, to promote sustainable and green development and digitization of public services. It is also intended to increase the quality of education and training by reforming the education system.
The National Plan “Cyprus – tomorrow” is an ambitious and realistic plan which is the new vision of our country.
The Government remains committed to the implementation of the Plan by promoting the necessary reforms that will lead Cyprus to the new era. Achieving this national goal requires the contribution of all the institutions of the country.