Cyprus receives €100 million EIB loan for extensive road upgrades

• EIB lends Cypriot government €100 million to make road travel easier and safer
• Loan to co-finance network upgrades and extensions
• Works to include environmental management systems such as better water collection and drainage systems.

The European Investment Bank (EIB) is lending Cyprus €100 million for a range of road improvements in the country. The EIB credit will cover 50% of the costs of planned renovations and extensions to make road travel in Cyprus easier and safer.

The loan is part of a €200 million approved EIB financing package for Cypriot road infrastructure. A second tranche of €100 million is due to be signed in 2025. The works, which will cover road networks and infrastructure improvement in various areas across the country, are due to be completed by 2029.

“Investing in critical infrastructure such as road networks is key to social cohesion and economic growth,” said EIB Vice-President Kyriacos Kakouris. “It will make a tangible difference to the daily lives of Cypriots by facilitating mobility, improving safety and enhancing resilience to climate change.”

The EIB loan will support a multiyear national plan by the Cypriot Ministry of Transport, Communications and Works. The plan includes a wide range of works, from upgrading motorways, regional and rural roads, and building new bridges, tunnels and walking and cycling lanes, to upgraded traffic management systems and drainage systems.

The loan has more favourable conditions than those on the market. It offers longer disbursement periods and fixed interest rates for the whole duration of the credit.

“This is a vital new financing agreement for our transport sector,” said Cypriot Minister of Finance Makis Keravnos. “The loan aligns with our strategic goal of accelerating investments that improve our transport infrastructure by enhancing safety and regional connectivity.”

“The proposed projects, supported by the EIB, will effectively address and manage critical bottlenecks within the road networks, improve the connectivity of isolated areas, enhance the mobility of the most sustainable travel options in urban areas, and reduce fatal road collisions in our country,” said Alexis Vafeades, Minister of Transport, Communications and Works.

EIB road financing in Cyprus

The loan marks the fourth Cypriot road-infrastructure project financed by the EIB and brings its total support for the country’s road networks since 1998 to more than €570 million. The most recent EIB financing for this area in Cyprus was a €112 million loan in 2021 to support four projects in Nicosia, Limassol and Paphos as well as the Vasilikos Energy Centre Road.

Previous projects in Cyprus supported by the EIB include:

• An €80 million loan in 2011 for an upgrade of the A1 motorway (Nicosia-Limassol), the construction and upgrade of a 4.5 km link to improve access to Cyprus’s main port of Limassol and the installation of camera equipment to monitor and enforce speed limits and traffic lights at peak times across the country.
• A €100 million loan in 1999 for the upgrade of three major road projects: the Dhekeli–Protaras motorway, the extension of the Nicosia–Troodos motorway and the Limassol bypass.

Background information

EIB

The European Investment Bank (ElB) is the long-term lending institution of the European Union, owned by its Member States. It finances sound investments that contribute to EU policy objectives. EIB projects bolster competitiveness, drive innovation, promote sustainable development, enhance social and territorial cohesion, and support a just and swift transition to climate neutrality.

The EIB Group, which also includes the European Investment Fund (EIF), signed a total of €88 billion in new financing for over 900 projects in 2023. These commitments are expected to mobilise around €320 billion in investment, supporting 400,000 companies and 5.4 million jobs.

All projects financed by the EIB Group are in line with the Paris Climate Accord. The EIB Group does not fund investments in fossil fuels. We are on track to deliver on our commitment to support  €1 trillion in climate and environmental sustainability investment in the decade to 2030 as pledged in our Climate Bank Roadmap. Over half of the EIB Group’s annual financing supports projects directly contributing to climate change mitigation, adaptation, and a healthier environment.

Approximately half of the EIB's financing within the EU is directed towards cohesion regions, where per capita income is lower. This underscores the Bank's commitment to fostering inclusive growth and the convergence of living standards.