Historic day, Cyprus gets  €157m from Recovery Facility

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Cyprus welcomed as historic the first disbursement of €156.8 mln in pre-financing in funds and loans provided under the European Commission’s Recovery and Resilience Facility (RRF).

President Nicos Anastasiades said receiving the first tranche on Thursday was a “historic day for our country”.

“The first tranche will be used to finance investments and reforms expected to have a profound transformative impact on the economy and society of Cyprus.

“Achieving this national goal requires the contribution of all the institutions of the country.”

The Commission said the pre-financing is equivalent to 13% of the funds allocated to Cyprus.

This pre-financing will help kick-start implementing the crucial investment and reform measures outlined in Cyprus’ recovery and resilience plan.

Future disbursements will be based on implementing the investments and reforms in the national plan.

It includes 133 measures, 58 reforms and 75 investments.

Cyprus is to receive €1.2 bln in total, with €1 bln provided in grants and €200 mln in loans.

By the end of the year, the Commission intends to raise a total of €80 bln in long-term funding, complemented by short-term EU-Bills, and fund the first planned disbursements to the Member States under NextGenerationEU.

Commissioner for Economy Paolo Gentiloni said the pre-financing “will help Cyprus to implement important measures for climate transition and to tackle the threat of forest fires, to boost the country’s digital competitiveness and strengthen education and training.”

He also welcomed Cyprus’ commitments “to limit possibilities for aggressive tax planning.”

Commissioner for Budget and Administration Johannes Hahn said: “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.”

As part of NextGenerationEU, the RRF will provide €723.8 bln to support investments and reforms across the bloc.

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.

Commission President Ursula von der Leyen said this first disbursement for Cyprus is an “important milestone”.

“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,” the Commission President stressed.

On the green transition, the Cypriot plan will invest €89 mln in energy efficiency and renewables, €87 mln in promoting sustainable and green mobility, €19 mln to upgrade the country’s capacity to combat fire hazards through the purchase of firefighting aircraft, vehicles, equipment and the provision of related training.

On the digital transition, the plan will direct €133 mln to 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 mln in enhancing communication infrastructure access and supporting an inclusive digital transformation.

And €51 mln will be invested in 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 system.

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.