On September 1, Cyprus formally requested the European Commission to amend its existing Recovery and Resilience Plan, aiming to incorporate a new chapter focused on REPowerEU, according to an official statement from the Commission.

The new REPowerEU chapter outlines Cyprus' ambitions in promoting energy-efficient buildings, advancing the electrification of its transport system, and investing in green energy research and development. The updated plan features two fresh reforms and investments tailored to meet REPowerEU goals, and scales up five existing measures to enhance their impact.

In addition to introducing new green initiatives, Cyprus plans to eliminate seven projects from its initial recovery outline. One of these projects will be re-allocated to the loan-based section of the plan, while around 50 other measures are set for modification.

The decision to revise the plan comes in light of several economic challenges faced by Cyprus, including rising inflation rates observed in 2022, supply chain issues, and a reduction in its maximum grant allocation under the Recovery and Resilience Facility (RRF). This allocation has been scaled back from €1.01 billion to €0.92 billion as part of an update in June 2022. The update reflects Cyprus' relatively better economic performance in 2020 and 2021 than initially projected.

Furthermore, Cyprus has expressed its intent to allocate its €52 million share from the Brexit Adjustment Reserve to this amended recovery and resilience plan. The updated financial outline, incorporating the RRF and REPowerEU grants (€0.92 billion and €52.5 million, respectively) and the initial RRF loan request of €0.2 billion, brings the total value of the proposed plan to €1.22 billion.

The European Commission will now undertake a two-month review to determine whether Cyprus' modified plan continues to meet the RRF Regulation's assessment criteria. Should the Commission endorse the updated plan, it will propose an amended Council Implementing Decision to formalize the changes. Member states will then have up to four weeks to approve the Commission's recommendations, concluded the official statement.