Cyprus is one step away from completing the Recovery and Resilience Plan (RRP), as approximately 200 out of a total of 221 milestones have been implemented to date.

In fact, most of the 20 remaining milestones concern projects expected to be completed within July and before the final deadline of August 31, when the national plan officially closes. The only milestones that present a challenge and a risk of losing funds from the €1.02 billion financing are the remaining legislative regulations.

Specifically, the main hurdles are three legislative regulations that must be passed immediately by the House of Representatives, which concludes its sessions ahead of the summer recess on July 9, primarily the one concerning green taxation on fuel.

More analytically, this involves the bill providing for the landfilling of waste, where representatives of the District Governance Organizations (EOA), municipalities, communities, and ETEK launched attacks against the government, arguing that the cost will be passed on to citizens.

This reaction caused intense concern within the Parliamentary Committee on the Environment, which examined the bill. However, the issue is expected to be clarified during today's session of the Committee, while according to information, intense consultations and deliberations took place in the interim so that the passage of the bill can proceed and European funds are not lost.

The second legislative pending matter concerns the establishment of the Cyprus Business Development Organisation, aimed at covering the financing gap faced by small and medium-sized enterprises (SMEs) and startups.

During the discussion of the bill in the Finance Committee, MPs expressed intense concern and reservations about creating yet another semi-governmental organization.

In fact, before proceeding with the discussion of the bill, they requested to be briefed on a series of issues relating to the new organization, such as the fiscal burden, operational costs, the intended benefit, and the cost to the Republic if the milestone is not implemented.

Regarding the third pending matter, it involves the imposition of a green tax on fuel, a regulation that has been frozen due to developments in the Middle East region, which led to increases in fuel prices.

On this matter, the Republic is in consultation with the European Commission to mitigate as much as possible the penalty it will pay, namely to avoid the permanent cutting of €23 million from the Recovery and Resilience Facility, which is currently suspended.

Nevertheless, the possibility remains open for the House of Representatives to briefly interrupt its "summer siesta" to legislate towards this end.

The Challenges That Remain

The Plan is currently in the final stage of implementation, having entered the phase of completing measures and final audits, said Anthoula Savvidi, Director of Recovery and Resilience at the Directorate General for Growth of the Ministry of Finance, speaking to INK.

Regarding the reforms, and particularly the legislative regulations, she mentioned that about 40 pieces of legislation have been adopted, a percentage that amounts to 95% of the relevant RRP milestones.

She added that the passage of the bills for green taxation, specifically the carbon tax and the household waste fee, remains a challenge so that no fine is imposed by the EU.

Furthermore, she stated that the passage of the last milestone legislation for the establishment of a National Development Organisation to facilitate businesses' access to financing also remains pending.

Projects, Investments, and Sponsorship Schemes Are Being Completed

She emphasized, however, that the investments, actions, infrastructure projects, as well as sponsorship schemes for businesses and individuals, with a total budget of €1.02 billion, will all be completed soon.

Regarding the total amount that Cyprus has already drawn from the EU Mechanism, she stated that it amounts to €589 million, which corresponds to approximately 58% of the total budget of the Plan.

She also added that another €118 million will soon be disbursed for the 7th grant installment submitted last December, raising the absorption rate to approximately 70%.

At the same time, she explained that the payment requests for the 7 installments already submitted concern the completion of 137 milestones out of the 221 included in the Plan as a whole, while pointing out that all RRP actions must be completed in August 2026.

Last Installments Completed by 76%

She stated that the final payment request for the remaining 84 milestones will be submitted in September, noting that almost all milestones are being completed within July.

Simultaneously, she underlined that the Coordinating Authority continues its close monitoring and support of the Implementing Bodies by conducting frequent on-site visits to ongoing projects to ensure the successful completion of all RRP investments.

The Most Significant Reform Projects

Regarding the reform measures of the RRP, and especially the legislative regulations, she pointed out that these have been almost entirely completed.

Ms. Savvidi mentioned that the reforms concern the rapid transition to a green economy and a digital era, strengthening the resilience and competitiveness of the economy, employment, social protection, education and human resources, as well as public health and civil protection.

More specifically, she stated that the most important reforms concern:

• Education: Extension of free compulsory pre-primary education from the age of 4 and adoption of a new evaluation system for educational work and teachers.

• Health: Introduction of a quality-based reimbursement model in primary and nursing care, and reform of the healthcare system through the preparation of clinical protocols for medical care.

• Labor: Introduction of flexible forms of work in the form of teleworking.

• -Energy: Interdependence of the Transmission System Operator from the EAC to facilitate the opening of the electricity market to competition and the promotion of RES.

• Environment: Legislative regulation for the gradual phasing out of the most polluting vehicles, particularly in urban areas with high pollution levels.

• Improvement of the legislative and institutional framework to combat corruption

• Establishment of an Anti-Corruption Authority, the reform of local government, and the passage of a law to facilitate strategic investments.

• Reform of public administration, improving the procedures and functioning of public administration for better policy-making and implementation.

€1 Billion in Investments and Infrastructure Projects

She further mentioned that under the RRP, an amount exceeding €1 billion was allocated for investments in infrastructure projects (€600 million) and sponsorship schemes (€420 million), while pointing out that, beyond public resources and investments, the RRP has also mobilized significant additional private capital.

Furthermore, major infrastructure projects have been completed and the remaining ones are being completed soon, with a total budget of €600 million, concerning:

• In the health sector, beyond the construction and strengthening of building infrastructure and equipment in state hospitals and clinics across Cyprus, other targeted projects stand out, such as the upgrade of the Paphos General Hospital with a new hemodialysis unit and the strengthening of interventional radiology at the Nicosia General Hospital.

• Projects related to digital transformation, with the digitization of public administration services and the development of modern information systems, such as for the Department of Road Transport, the Deputy Ministry of Shipping, the Ministry of Foreign Affairs, the Ports Authority, the Legal Service, and the Treasury for public procurement issues.

• Energy upgrade projects, sustainable transport, and smart solutions for water and energy management. Completed projects include the installation of photovoltaic systems/thermal insulation in 405 schools, the implementation of flood protection works, the development of smart water and electricity meter systems, and the implementation of Sustainable Urban Mobility Plans.

• Projects for the modernization of the educational system, such as the creation of Multifunctional Centers for children, the creation of two model special education schools, and the creation of 775 new slots in public kindergartens for preschool children.

• Projects to strengthen civil protection with the implementation of the early warning system "CY ALERT" and projects that enhance local development and revitalization of areas, such as the creation of student residences within the walled city of Nicosia, as well as the creation of the Aphrodite route in Ineia.

40 Sponsorship Schemes With a Budget of €420 Million Implemented

Additionally, Ms. Savvidi said that a decisive boost to the economy was given through approximately 40 sponsorship schemes, with a total budget of €420 million, which directly supported businesses, households, local authorities, and other bodies.

She noted that the schemes covered a wide range of sectors, from the energy upgrading of homes, businesses, and public buildings and the promotion of RES, to the development of electromobility infrastructure and the promotion of the use of electric vehicles.

At the same time, schemes were implemented to support the competitiveness of industry and businesses, the digital upgrade of small and medium-sized enterprises, the promotion of research and innovation, as well as the transition to the circular economy.

Furthermore, schemes enhanced the upgrade of the tourism product, the processing of agricultural products, and the revitalization of mountainous and remote areas.

In addition, schemes were implemented for employment, supporting young people, childcare, and people in need of long-term care, strengthening social cohesion and the labor market.

Specifically, she cited the most important:

• Investment Promotion Schemes for Energy Upgrading by Small and Medium Enterprises, NGOs, and Individuals. 275 businesses and over 1,000 homes have been energy upgraded, receiving a grant from the RRP.

• Scheme for encouraging the use of RES and Energy Saving in households. Photovoltaic systems have been installed and/or roofs insulated in over 50,000 homes, including over 7,000 homes of vulnerable consumers.

• Electromobility Promotion Schemes. Grants have been provided for the purchase of over 4,350 electric vehicles or bicycles and the retirement of approximately 1,400 polluting vehicles.

• Schemes for the Revival of countryside, mountainous, and remote areas. Around 250 businesses and community councils have been supported to enrich and upgrade the tourism product.

• Sponsorship Schemes for Research and Innovation in businesses and other organizations. Over 250 businesses and research bodies are expected to receive support for research and innovation actions.

• Schemes to strengthen competitiveness, modernization, and digital upgrading of businesses. Over 450 businesses receive grants for modernization actions, digital upgrading, promotion of the circular economy, and strengthening their competitiveness.

Last Payment in December

Ms. Savvidi further emphasized that "the goal was and remains common, and it is everyone's bet to utilize all the resources allocated to Cyprus through the RRP, for the benefit of all citizens."

She added that by December 2026, as provided for by the Regulation, the goal is to have collected the entirety of the €1.02 billion grant.

In conclusion, she said that "the progress already achieved and the coordinated mobilization and flawless cooperation of all involved bodies and Parliament for the passage of the legislation are the guarantees, and we are now optimistic that the RRP will be completed successfully, leaving behind a strong and sustainable development footprint for the Cypriot economy."

Source: ink.com