The European Investment Bank (EIB) reported on Wednesday on its strong engagement in Cyprus for 2022, with new financing signed reaching a total of €250 million, all of which was invested in 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.
In EIB's report it is also added that Cyprus' Minister of Finance, Constantinos Petrides noted the EIB’s continuous strong partnership with Cyprus. This partnership, he said, has been instrumental in Cyprus' 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 Petrides.
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.
Lilyana Pavlova, EIB Vice President responsible for lending in Cyprus, said that “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".
She noted that, 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.
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.
The European Investment Fund (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 venture capital or private equity 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).