Cyprus embraces European Investment Bank financial tools, minister says

Cyprus Finance Minister Makis Keravnos on Friday stated that the utilisation of the available financial instruments of the European Investment Bank (EIB) has long been a target of the government, especially during a time marked by numerous challenges.

Keravnos’ remarks came during the signing ceremony of two loan agreements totalling €230 million with the EIB. The first agreement involves a loan of up to €130 million to the Republic of Cyprus, covering part of the national contribution within the framework of the Thalia programme for 2021-2207.

The second agreement concerns loans of €100 million to the Nicosia, Larnaca, and Limassol Amathus Sewerage Boards to fund significant infrastructure projects ensuring compliance with the European directive regarding the treatment of urban wastewater.

The ceremony was attended by Agriculture, Rural Development, and Environment Minister Petros Xenophontos, EIB Vice President Kyriakos Kakouris, and representatives from the affected sewerage boards.

In his address, Keravnos highlighted that the favourable financing terms provided by the EIB, as well as its increased long-term lending capacity, lead to lower financing costs and improved conditions for the final beneficiaries.

“As such, our enduring goal is to harness the available financial tools offered by the EIB for the implementation of major projects, such as those for which agreements have been signed today, especially at this stage when we are experiencing an era characterised by continuous and unpredictable challenges, both globally and at the national level,” the minister said.

Regarding the €130 million financing agreement for the partial funding of projects and programmes co-financed by the European Union Cohesion Funds under the Thalia 2021-2027 programme, Keravnos stated that the wider financing agreement, as approved by the Council of Ministers, encompasses the conclusion of a loan with the EIB of up to €369 million.

He explained that the Thalia programme includes projects totalling €1.81 billion during the 2021-2027 period, with the national contribution estimated at €842 million and EU Cohesion Policy Funds financing at €968 million.

Moreover, he noted that the agreement with the EIB aims to finance part of the national contribution of the Republic of Cyprus.

On his part, EIB Vice President Kyriakos Kakouris emphasised that this represents the first tranche of financing.

“This means that if the programmes are executed before the end of the programming period, then there is the possibility of additional EIB financing if there is satisfactory absorption of the funds,” he stated.

Regarding the €100 million loan agreement with the sewerage boards, aimed at ensuring compliance with EU directives and boosting environmental protection, Keravnos said that these projects stand as a top priority for the state.

“The implementation of these projects is of utmost importance as it guarantees the country’s compliance with its European obligations,” Keravnos said.

“Furthermore, the completion of these partially funded projects will bring significant environmental benefits and positive impacts on the lives of the residents in these areas, ultimately safeguarding public health,” he added.

To support these projects, the government plans to provide state guarantees for the aforementioned loans, a move welcomed by Agriculture Minister Petros Xenophontos.

Xenophontos labelled these projects as “of paramount importance” as they align with the directive on wastewater treatment in communities and municipalities with a population exceeding 2,000 people.

“These projects will not only meet the requirements of the European directive but will also provide significant environmental protection for groundwater resources,” he said.

“Additionally, they will positively impact the lives of the residents in these areas,” Xenophontos added.

Kyriakos Kakouris, Vice President of the EIB, reiterated the long-standing and vital support provided by the bank in sewage infrastructure construction. He highlighted that all sewage projects in the free areas of Cyprus have been funded by the bank.

Meanwhile, the affected boards welcomed the agreements for wastewater treatment, acknowledging the importance of these significant infrastructure projects.

Larnaca mayor Andreas Vyras described the project as crucial for the affected citizens and the country itself, achieving compliance with the European directive on wastewater management.

“The phase four project will cover sewage systems in the residential areas of Aradippou and Livadia, as well as the communities of Oroklini and Pyla,” Vyras detailed.

Antonis Antoniou, Director of Financial Services at the Nicosia Sewerage Board, expressed enthusiasm for the financing agreement for sewage system construction in the Idalion Municipality and the Peran Chorio Nisou and Lymbia communities.

“The system will serve approximately 32,000 residents based on the latest census, with a projected population of nearly 50,000 by 2050,” Antoniou explained.

Finally, Yiannis Tsouloftas, General Director of the Limassol and Amathus Sewerage Board, outlined that the financing agreement involves two infrastructure projects.

The first involves the sewage network in Palodia, an area undergoing substantial development, while the second project involves the construction of a comprehensive sewage system in the Kourion complex, spanning the entire Akrotiri Peninsula.