CYPRUS EU FUNDS CO-FINANCING 2021-2027

The project consists in a Structural Programme Loan supporting the 2021-2027 selected operational programmes and priorities from the Partnership Agreement of the Republic of Cyprus.

The programme loan will support, through national contribution co-financing, priority multisector investments of the EU Cohesion Policy Funds Operational Programme THALIA for the 2021-2027 programming period (OP), prepared under the Cypriot Partnership Agreement. The OP is a multi-annual, multi-fund, development plan, which defines the strategy for the utilisation of the resources allocated to Cyprus through the Cohesion Policy Funds in the period 2021-2027.

The project aims to support the implementation of priority investments as per the Partnership Agreement of Cyprus and its THALIA Operational Programme for the period 2021-2027 (as agreed with the European Commission). It fosters innovation, digitalisation, environmental protection, social inclusion and climate action. Sound programming and programme management will ensure that the Project's benefit will spread throughout the country, thereby contributing to its balanced socioeconomic and territorial development. 

The investment programme is plan-led and embedded in the EU Cohesion policy architecture centring around the EU policy objectives of a smarter, a greener, and a more social Europe.

EIB support to the national co-financing of the ESIF investments will help kick-start the implementation of the investment schemes.

The Project addresses market failures and sub-optimal investment situations in many sectors such as research, development and innovation (whose returns to society are known to be larger than the financial return to the investor). Moreover, it will enable digitalisation driven efficiency gains in the provision of public services through investment in e-government applications. In addition, the project will support drinking water network, sewerage, water supply replacements, smart water meters, flood protection works and coastal erosion protection investments , thus generating environmental and public health benefits. Finally, the Project will also support energy efficiency renovations in public buildings and the production of energy from renewable sources, thereby lowering the negative externalities from greenhouse gas emissions.

EIB's participation provides a significant financial benefit to the Republic of Cyprus. EIB loans provide longer maturities than other investors. EIB financing also allows to distribute the cost of financing over the life of the assets, resulting in a manageable annual debt service amount. In addition, it will include flexible drawdown terms, long grace periods and conditions adjusted to the investment horizon of the Project, which are highly valued by public promoters and a key differentiating feature of EIB's financing. Finally, EIB provides the Republic of Cyprus with debt diversification compared to the usual bond issuances.

The aim is supporting key EU priorities such as the green and digital transition and contributing to develop a competitive, innovative and export-oriented growth model for the country. The results of such investments under these priorities will include i.a. reduced emissions, increased adaptability to climate change, the protection of biodiversity and the environment. Socially, the investments target socio-economic inclusion of marginalised groups, active inclusion, equality of access to services etc. In addition, the Just Transition investments will foster solidarity in the drive towards climate neutrality, enabling Cyprus to address the social, employment, economic and environmental impacts of achieving the Union's 2030 energy and climate targets and the transition to a climate-neutral economy of the Union by 2050 under the Paris Agreement.

The Bank will require the promoter to ensure that contracts for implementation of the project have been or will be (as the case may be) tendered in accordance with the applicable EU procurement legislation: Directive 2014/23/EU / 2014/24/EU /2014/25/EU as well as Directive 92/13/EEC or Directive 89/665/EEC] as interpreted by the Court of Justice of the EU, with publication of tender notices in the EU Official Journal, as and where required.