Cyprus asks to modify its recovery and resilience plan

Cyprus has submitted a request to the European Commission (EC) to modify its recovery and resilience plan, with the addition of a REPowerEU chapter.

The Commission said in a press release that Cyprus' proposed REPowerEU chapter covers measures related to energy efficiency in buildings, the electrification of transport, and research and development regarding the green transition. Two new reforms and two new investments to deliver on the REPowerEU objectives are included, as well as five existing measures which have been scaled up.

“Cyprus' proposed modification of the plan also foresees the removal of seven investments from the original plan, of which one is transferred to the loan-financed part of the plan, and the modification of around 50 planned measures,” the EC said.

It is further added that Cyprus' request to modify its plan is based on the need to factor in the high inflation experienced in 2022, supply chain disruptions and the downward revision of its maximum Recovery and Resilience Facility (RRF) grant allocation, from €1.01 billion to €0.92 billion. The revision is part of the June 2022 update to the RRF grants allocation key and reflects Cyprus' comparatively better economic outcome in 2020 and 2021 than initially foreseen.

It is also noted that Cyprus has requested to transfer its share of the Brexit Adjustment Reserve, amounting to €52 million, to its recovery and resilience plan. Together with Cyprus' RRF and REPowerEU grants allocation (€0.92 billion and €52.5 million, respectively), and with the amount of its original RRF loans request of €0.2 billion, these funds make the submitted, modified plan worth €1.22 billion.

The Commission has now up to two months to assess whether the modified plan still fulfils all the assessment criteria in the RRF Regulation. If the Commission's assessment is positive, it will make a proposal for an amended Council Implementing Decision to reflect the changes to the Cypriot plan. Member States will then have up to four weeks to endorse the Commission's assessment, the press release concludes.