The European Commission has today disbursed €157 million to Cyprus in pre-financing, equivalent to 13% of the grant and loan component of the country’s financial allocation. The pre-financing payment under the Recovery and Resilience Facility (RRF) will help to kick-start the implementation of the crucial investment and reform measures outlined in Cyprus’ recovery and resilience plan.
The Commission will authorise further disbursements based on the implementation of the investments and reforms outlined in Cyprus’ recovery and resilience plan. The country is set to receive €1.2 billion in total over the lifetime of its plan, with €1 billion provided in grants and €200 million in loans.
Today’s disbursement follows the recent successful implementation of the first borrowing operations under NextGenerationEU. By the end of the year, the Commission intends to raise up to a total of €80 billion in long-term funding, to be complemented by short-term EU-Bills, to fund the first planned disbursements to Member States under NextGenerationEU.
Part of NextGenerationEU, the RRF will provide €723.8 billion (in current prices) to support investments and reforms across Member States. The Cyprus plan is part of the unprecedented EU response to emerge stronger from the COVID-19 crisis, fostering the green and digital transitions and strengthening resilience and cohesion in our societies.
Supporting transformative investments and reform projects
The RRF in Cyprus finances investments and reforms that are expected to have a deeply transformative effect on Cyprus’ economy and society. Here are some of these projects:
- Securing the green transition: The Cypriot plan will invest €89 million in energy efficiency and renewable energy measures, €87 million in promoting sustainable and green mobility, and €19 million to upgrade the country’s capacity to combat with fire hazards: purchasing of firefighting aircraft, vehicles, equipment and providing related training.
- Supporting the digital transition: The plan will invest €133 million in the digitalisation of public services, building a secured, integrated and modern digital architecture to support the transition to a combination of digital public services. It will also invest €87 million to enhance access to communication infrastructure and supporting an inclusive digital transformation.
- Reinforcing economic and social resilience: The plan will invest €51 million on increasing the quality of education and training through reforming the teaching profession and secondary schools’ curricula, establishing a modern vocational education and introducing a higher education graduate tracking syste It will also introduce a withholding tax on outbound payments made to EU-listed non-cooperative and low tax jurisdictions and other measures to curb aggressive tax planning.
Members of the College said:
President Ursula von der Leyen said: “Today’s first disbursement of €157 million of NextGenerationEU funds to Cyprus is an important milestone. It is the first step in making the investments and reforms contained in the Cypriot recovery and resilience plan a reality. These measures will help to secure Cyprus’s digital and green transitions by supporting energy efficiency, sustainable mobility, education and training and improving connectivity. I am particularly proud that a significant portion of the funds will be devoted to protecting Cyprus against 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 very successful bond issuances under NextGenerationEU over the past few weeks, and the first payments for other NGEU programmes, I am glad that we have now also reached the disbursement stage for the RRF. Intense cooperation with Cyprus and solid preparation within the Commission allowed us to pay out the funds in record time. This shows that with the resources raised, we will be able to swiftly deliver on the pre-financing needs of all Member States, thus giving them the initial boost in implementing the numerous green and digital projects included in their national plans.”
Paolo Gentiloni, Commissioner for Economy, said: “This pre-financing of €157 million is the first injection of €1.2 billion in EU support for Cyprus through the Recovery and Resilience Facility. That funding will help Cyprus to implement important measures for the climate transition and to tackle the threat of forest fires, to boost the country’s digital competitiveness and to strengthen education and training. I also welcome Cyprus’ commitments to limit possibilities for aggressive tax planning.”