- All financing signed from the EU bank in Cyprus last year was for green projects.
- Innovative urban regeneration scheme accounted for 60% of all financing in Cyprus.
The European Investment Bank (EIB) Group is pleased to report another successful year of strong engagement in Cyprus, with overall new financing signed in the country in 2022 reaching a total of €250 million – all of which went toward green projects.
During the year, the EU bank committed €150 million in support for a large-scale urban regeneration project which aims to make Cypriot municipalities greener, boost the economy, and improve the quality of everyday life. Additionally, there was a heavy focus on fostering local entrepreneurship with a €100 million agreement under the Cyprus Entrepreneurship Fund II, a risk-sharing instrument, which aims to support local SMEs and MidCaps during these challenging times. Moreover, the EIF agreed to manage the newly launched Cyprus Equity Fund (CEF) - the first private equity fund in the country.
"I am pleased to note that EIB’s continuous strong partnership with Cyprus has resulted in a total signature volume of €250 million in 2022. Our partnership has been instrumental in our efforts to promote new investments for entrepreneurship, sustainable development, and regeneration of urban areas. Specifically, under the CYPEF II agreement, we aim to facilitate new long-term financing in order to help our SMEs and MidCaps in this exceeding difficult economic climate. In addition, with the agreement for new urban investments, we aim to regenerate and upgrade urban areas as well as promote greener communal spaces, enabling Cyprus to reach its sustainability targets," said Constantinos Petrides, Cypriot Minister of Finance.
EIB Group support for Cyprus in 2022 represented 0.94% of GDP, second only to Greece among all EU countries, while the EU bank’s outstanding overall exposure to date moved to approximately 12% of the country’s GDP, putting Cyprus at the top of all EU countries in which the EIB is operating in terms of EIB support, per capita. The latest support, and strong history of activity in Cyprus, underlines the EIB Group’s commitment, especially during some challenging recent years for the Cypriot economy. Between 2013 and 2022, the EU bank’s lending activity in Cyprus reached a total of €2.5 billion.
“In 2022, the EIB Group exceeded its targets in Cyprus, with vital urban infrastructure investment agreed which will make Cypriot municipalities greener, boost the economy, and improve people’s lives. On top of that, the package of support for SMEs and MidCaps is vital for local businesses during these tough economic times, enhancing access to alternative sources of finance for start-ups and innovative companies. In addition to the financial support, the number of important advisory assignments, especially in the transport and energy sectors, will help accelerate the country’s adoption of climate-friendly investments,” said Lilyana Pavlova, EIB Vice President responsible for lending in Cyprus.
Urban regeneration takes center stage in Cyprus
In an important year for EIB Group activity in Cyprus, the largest project in 2022 by far was the Municipal Strategic Plan for Sustainable Development. Set up by the Cypriot government and the Union of Cyprus Municipalities, it will finance numerous projects to regenerate and rehabilitate municipalities across Cyprus. The EIB is supporting the plan with a €150 million framework loan, signed in November this year, and with technical assistance through its Advisory Hub.
EIF supporting startups and entrepreneurship
The EIF was appointed by the Republic of Cyprus as the Manager of the first private equity fund, the Cyprus Equity Fund (CEF). CEF is supported by public resources and its main objective is to enhance access to alternative sources of finance for start-ups and innovative companies. The equity market in Cyprus is only just emerging and lacks depth from a local investment community that could support investment rounds as well as locally based VC or PE funds. The initiative will have a total budget of up to €30 million and will be co-financed by RRF resources (for up to €20 million) and reflows from the previous JEREMIE Cyprus programme (for up to €10 million).
Background information:
EIB Group 2022 results
Overall EIB Group financing signed last year reached €72.5 billion, which is expected to support around €260 billion in investment and create 950,000 jobs by 2026. Almost half of EIB lending in the European Union (46%) was signed for projects in cohesion regions, underlying the Bank’s support for equitable growth and the convergence of living standards.
The EIB offered immediate relief to Ukraine right after the outbreak of the war, disbursing €1.7 billion in funds last year to help finance emergency repairs to the country’s infrastructure ravaged by Russian bombing. The Bank remains committed to stepping up its activities in Ukraine, in line with the mandate given by EU leaders, and in close cooperation with the European Commission, the European Parliament and international partners.
Green financing from the EIB increased substantially again to €36.5 billion (58% of the total), meaning that the Bank met its commitment to devote at least half of its resources to climate action and environmental sustainability, well ahead of its 2025 target. Overall, the EIB Group is well on track to achieve its objective of supporting €1 trillion in green investment this decade, having already backed €222 billion in investment over the past two years.
The EIB Group signed a record amount in new financing for renewables, efficiency, storage, and grids in 2022, highlighting the EU bank’s unwavering commitment to ensure access to affordable energy at a time of extreme uncertainty. Total EIB financing signed for sustainable energy projects inside the European Union reached an unprecedented €17.06 billion, as the Bank began rolling out a special package of support for the REPowerEU plan to end dependency on Russian fuel imports.