Cyprus the leading EIB beneficiary

Minister of Finance Constantinos Petrides met with the vice president of the European Investment Bank (EIB) Liliana Pavlova on Friday, discussing the current state of the economy, as well as the bank’s involvement with Cyprus.

“We express our appreciation for the EIB’s valuable support and commitment in our efforts to achieve our goals of sustainable economic growth,” Petrides said.

Regarding the coronavirus pandemic, the Finance Minister said that the economy experienced a sharp decline, with the tourism industry suffering a major blow.

This resulted in the government implementing a number of support schemes, three of which were supported by the EIB.

The first initiative involved Cyprus’ participation in the Pan-European Guarantee Fund (EGF), which, through a combined investment of €38.1 billion, helped to mobilise a further €115 billion of financing for small-to-medium-sized enterprises (SMEs) across the European Union.

The second programme involved the use of €500 million to allow SMEs to receive loans under more lenient terms, bringing their total cost down from €1.5 billion to €1 billion.

The EIB also helped promote actions related to the Cyprus Entrepreneurship Fund (CYPEF), which was expanded from its original scope to also include support for midcap companies, rather than just SMEs.

The second iteration of the fund, dubbed CYPEF II, received €100 million in funding.

In 2021, new EIB financing for priority investment in Cyprus totalled €303, reflecting a 24 per cent increase over the previous year.

Cyprus is currently the largest recipient of EIB support, per capita, in Europe, with the bank having an outstanding exposure of €2.7 billion, 13 per cent of the country’s GDP.

The European Investment Bank Group is a key partner for Cyprus and the close cooperation between the EIB, EIF and Cypriot public and private sectors partners has once again enabled Cyprus to be the leading EU beneficiary of EIB engagement per capita,” Petrides said.

“New long-term and targeted EIB financing is ensuring that Cypriot business can overcome challenges unleashed by the Covid-19 pandemic and invest in innovation,” the minister added, who explained that Cyprus’ goal is to fully utilise all of the available development instruments, such as those provided by the EIB.

“I am optimistic, as well as certain, that this intense activity on the part of the Bank in Cyprus will continue in the coming years and I’m confident that the EIB will continue to act as a reliable partner for sound projects throughout the EU,” the Cypriot Finance Minister concluded.

Meanwhile, Pavlova said the EIB’s engagement in Cyprus represented one of the largest backings for public and private investment in 31 years of operations, reaffirming the bank’s commitment to supporting priority investment in Cyprus.

“Last year was a record for European Investment Fund backing for targeted business financing, enabled by Cyprus being the first country to join the EIB Group’s pandemic economic response initiative, the European Guarantee Fund,” Pavlova said.

“During this visit, I have seen how the EIB is helping to transform higher education in Cyprus and ensure that future engagement unlocks new opportunities for Cyprus in the years ahead,” she added.