Friday 4 March 2022, 11:00
Meeting with the Minister of Finance, Mr. Constantinos Petrides
BRIEF STATUS OF CYPRUS ECONOMY
EIB RESPONSE IN CYPRUS RELATING TO THE COVID PANDEMIC
o Participation in the Pan-European Guarantee Fund (EGF). Cyprus was the first EIB shareholder to participate;
o Increase the State Guarantee towards the EIB by EUR 500m (from EUR 1 bn to EUR 1.5 bn) for EIB’s “Cyprus Banks Loan for SMEs and MidCaps” Scheme.
o Request from EIB to proceed with “CYPRUS ENTREPRENEURSHIP SCHEME (CYPEF) II” (Signed on 16/3/2021)
RoC -EIB COOPERATION:
o EUR 100m, under the CYPEF II, a risk sharing instrument, which aims to support local SMEs and MidCaps during these challenging times. This operation was a request by the Minister of Finance and follows the success of CYPEF I.
o EUR 112m, for supporting key public sector transport infrastructure projects. The amount was increased to include a much-needed investment in road safety cameras, demanded by society for more than a decade.
o EUR 15m, venture debt financing with Hellas Direct, a private tech company providing online insurance services in Greece and Cyprus, was signed in June 2021.
o EUR 6m to Alpha Bank for the support of small size renewable energy (“RE”) and energy efficiency (“EE”) investments as well as investments of small and medium-sized enterprises (“SMEs”) leading to CO2 emission reductions and energy savings in the framework of Cyprus RE and EE Small Investments Finance Contract.
o EUR 70m under European Guarantee Fund (EGF-EIF support): EIF signed 2 important guarantee agreements under the EGF Mandate: EUR 50m with Hellenic Bank and EUR 20m with Eurobank.
FUTURE EIB OPERATIONS:
o An additional EUR 100m for the Private Sector (SMEs and MidCaps) under the Cyprus Entrepreneurship Fund II (CYPEF II);
o Urban infrastructure promoted by municipalities: up to EUR 150m for supporting investments promoted by municipalities;
o Renewable Energy promoted by Private Sector: up to EUR 100m intermediated by local banks.
o The equity market in Cyprus is emerging with limited Venture Capital activity. The Republic of Cyprus is in advanced negotiations with the EIF for the signature of an equity instrument in Cyprus, the first private equity fund in the country supported by public resources. The main objective of the Cyprus Equity Fund (CEF) will be to enhance access to alternative sources of finance for start-ups and innovative companies.
o Republic contribution of EUR 30m and will be co-financed by RRF resources (for up to EUR 20m) and reflows from the old JEREMIE Cyprus programme (for up to EUR 10m).
o National Museum – Cyprus currently does not have an appropriate Museum to showcase its long history and culture.
o Affordable Housing and Student Residences - A new challenge is the significant increase in rents. EIB will support the 2 public Universities and the Ministry of Interior in building energy efficient constructions for students and low-income families
o Innovation and Research through operations with the State Laboratory.
o Continuous market screening to identify corporate loans/projects for direct lending
SUGGESTIONS: