EIB ready to offer funding to mitigate effects of Ukrainian war on Cyprus

New investment opportunities in Cyprus, as well as funding to mitigate the effects of the war in Ukraine, were discussed on Monday by President Nicos Anastasiadis, Finance Minister Constantinos Petridis and European Investment Bank (EIB) President Werner Hoyer. 

Mr Hoyer said the EIB supports countries affected by the war in Ukraine, such as Cyprus, and is working with national authorities and others to provide urgent financial and technical assistance to those countries and regions. 

"We are ready to support investments here in Cyprus in order to reduce the effects and economic shock caused by the war," he said. 

At the same time, he said that Cyprus could benefit from the € 4 billion package approved by the EIB for hosting refugees from Ukraine. 

He also noted that the war in Ukraine not only caused disasters in the country but also caused economic, energy, food and tourism shocks around the world. He added that thanks to the unanimous support of the 27 EIB member states, including Cyprus, the bank was able to immediately approve and disburse € 668 million in financial support to Ukraine and is ready to do more in that direction. 

24% increase in EIB funding in Cyprus

Regarding the Bank's investments in Cyprus, he stated that the new financing of the EIB Group for priority investments in Cyprus last year amounted to 303 million euros, an increase of 24% compared to 2020. 

Cyprus, he added, remains the largest recipient of EIB support per capita of any country in Europe, with a total EIB report of 2.7 billion euros, or 13% of the country's GDP. 

He also mentioned that in 2021, Cyprus recorded the largest participation of small and medium-sized companies in the European Investment Fund (EIF). This, he said, reflects the increased cooperation of the EIF with the Cypriot banks and it became possible for Cyprus to be the first country to join the bank's initiative called the European Guarantee Fund, which was a program created in response to the pandemic.

Last year, the EIB and the EIF provided, he said, 170m euros in targeted business financing to support investments by Cypriot companies in difficult times.

He added that this includes support of 100 million euros from the EIB for local SMEs and mid-cap companies (MidCaps), under the second Cyprus Business Program, which followed the successful implementation of the first package.

"The new long-term and targeted EIB funding ensures that Cypriot companies can overcome the challenges posed by the COVID-19 pandemic and invest in innovation," he said.

He added that the new EIB financing agreed upon last year included financial support for business investments, support for road safety improvements across the national road network and the largest EIB support for financial services in Cyprus.

Petridis: Opportunities for additional investments were discussed

For his part, Finance Minister Constantinos Petridis said that he had the opportunity to discuss with Mr. Hoyer new and additional investments that are under study in key sectors of the economy, including long-term financing to help SMEs and MidCaps overcome recent economic challenges, urban infrastructure projects, innovation projects and renewable energy projects.

Moreover, the Minister welcomed the recent agreement reached with the EIF on the Cyprus Equity Fund, the first publicly funded capital in the country. He added that the Government will continue to grow and strengthen this initiative for the challenges that Cyprus has to face in the near future, especially with regard to the green transition.

Mr. Pertridis said that the EIB's activity in Cyprus, according to the results of 2021, amounted to 303 million euros for investments in both the public and private sectors.

Of that, he said, 100m euros was donated under CYPEF II, a risk-sharing tool designed to support local SMEs and MidCaps in these difficult times.

Another 112m euros was given to support key transport infrastructure projects in the public sector. The amount was increased to include the investment for the installation of road safety cameras, a necessary project, he added, which was a requirement of society for more than a decade.

He added that 15 million euros was used in the financing of business debt with Hellas Direct, a private technology company that provides e-insurance services in Greece and Cyprus and was signed in June 2021.

Another € 6 million was given to Alpha Bank to support small-scale investments in renewable energy and energy efficiency, as well as small and medium-sized enterprises' investments leading to CO2 emissions reductions and energy savings under the Cyprus RE and EE Small Investments Finance Convention Contract.

He also said that the European Investment Fund signed 2 important guarantee agreements under the mandate of the European Guarantee Fund: 50 million euros with Hellenic Bank and 20 million euros with Eurobank.