Cyprus’ recovery and resilience plan

RRF FUNDED PROJECTS IN CYPRUS

WHAT’S IN THE PLAN?

The reforms and investments in Cyprus’s plan are helping it to become more sustainable, resilient and better prepared for the challenges and opportunities of the green transition and digital transition. Following Council’s approval of Cyprus’ plan, on 08 December 2023, Cyprus’ recovery and resilience plan was updated on 08 December 2023 also to include a REPowerEU chapter.

^{*This value includes also the part of the plan which is financed with national resources
**RRF Grants (of which €52.4 mn from REPowerEU and €52.1 mn from Brexit Adjustment Reserve)}

• 75 investment streams and 61 reforms
• 45% of the plan will support climate objectives
• 24.6% of the plan will foster the digital transition

The transformative impact of Cyprus’ plan is the result of a strong combination of reforms and investments, which address the specific challenges of Cyprus. The reforms address bottlenecks to lasting and sustainable growth, while investments have been selected to enhance sustainable growth and the digital transition, and increase productivity. 

All measures have to be implemented within a tight time frame, as the Regulation establishing the Recovery and Resilience Facility requires all milestones and targets within the national plans to be completed by August 2026.

In the area of climate and environmental policies, Cyprus faces the challenge of high greenhouse gas emissions, gaps in water and waste management, the need to safeguard biodiversity and wildlife.

Key measures for the green transition

• The plan will contribute €100 million to the EuroAsia Interconnector project, which will connect Cyprus to the EU electricity network and boost renewable energy production.
• The green investments of the plan include various support schemes worth €89 million, promoting energy efficiency and renewables and combating energy poverty.
• The plan contains as well €87 million of investments promoting sustainable and green mobility and encouraging a shift from private cars to public transport, as well as promoting the use of electric vehicles.
• Several reforms are included which will introduce green taxation, reform the electricity market and facilitate the use of electric vehicles.

Digital challenges for Cyprus include connectivity, in particular the coverage of fixed very high capacity network. Cyprus also needs to make efforts to enhance digital skills in all population groups. Another challenge for Cyprus concerns digital public services as the level of online interaction between public authorities and the general public should be improved.

Key measures for the digital transition

• Cyprus’ recovery and resilience plan supports the digital transition.
• Investments and reforms support connectivity by enhancing access to communication infrastructure and supporting an inclusive digital transformation. 
• €133 million will be invested for the digitalisation of public services, as the plan includes building a secured, integrated and modern digital architecture for the transition of digital public services.
• The plan also promotes digital education and skills, notably by upgrading digital infrastructure and tools in schools, providing teachers with digital training and upskilling and reskilling programmes for different parts of the Cypriot society.
• It also enables the digital health transition by modernising the IT systems of the National Health System and deploying cross border e-health services.

Key macro-economic challenges for the Cyprus’ economy include the sustainability of public finances and high household debt, limited access to finance for SMEs, large inefficiencies in public administration, the high economic dependency on a limited number of sectors, the need to make health care system more resilient and the need for upskilling and reskilling of work force. In the social domain, key challenges include the low outreach and activation of young people, the education and training system, and weaknesses in early childhood education and child care.

Key measures in reinforcing economic and social resilience

• The plan reinforces economic and social resilience with measures aimed at setting the country on the right path towards establishing a competitive and resilient economy with a diversified production base and social integration.
• Cyprus will notably invest €64 million in research and innovation and €43.4 million to improve access to finance for SMEs. 
• Significant investments and reforms aim at increasing the efficiency, accessibility and resilience of the health care system, by investing €46.5 million to upgrade state hospitals. 
• Concerning the labour market and young people, Cyprus will invest €15 million in reskilling and upskilling and €50.4 million in upgrading school infrastructure.
• Important reforms will equally be implemented aimed at strengthening financial stability by reducing the high level of NPLs, improving the efficiency of public administration and of the justice system and fighting aggressive tax planning.

Annual events facilitate the exchange of views on the state of implementation of the Recovery and resilience plans, while ensuring close cooperation between all stakeholders and providing a platform to discuss interlinks between the Plans and other Union programmes. 

More information on Annual events held in Cyprus can be found here

Cyprus’ plan is consistent with the challenges and priorities identified in the European Semester, the annual cycle of coordination and monitoring of each EU country’s economic policies. For a detailed explanation of the European Semester see the following link: The European Semester explained | European Commission (europa.eu)

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