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Bilateral Meeting of EIB Vice President, Dr. Lilyana Pavlova


Friday 4 March 2022, 11:00 

Meeting with the Minister of Finance, Mr. Constantinos Petrides


  • Warm welcome to Cyprus to VP Pavlova and her team who have been actively participating in EIB – Cyprus events and activities. This is the first visit of VP Pavlova in Cyprus. We express our appreciation regarding the Bank’s valuable support and commitment to Cyprus’ efforts towards growth.


  • Following a recession of the magnitude of 5.2% in 2020 due to the pandemic and its consequences on economic activity, the Cyprus economy exhibited strong recovery in 2021, recording economic growth of around 5.7%. The government’s response to the pandemic has been highly effective in containing the magnitude of the recession as exhibited by the fact that the unemployment rate increased only marginally in 2020.
  • Even though the economic outlook for 2022 is surrounded by uncertainty given geopolitical developments, the prospects remain positive, with the economy forecast to grow at around 4%.
  • On the fiscal front, as expected, the extraordinary fiscal support to the economy and the restrictive measures have had negative consequences on public finances. However, the budget position is expected to improve considerably as from 2022 onwards, reaching a surplus by 2024.


  • The economy experienced a deep recession due to the COVID-19 pandemic as its tourism industry is to receive a significant hit. In order to support the economy, the Government approved in 2020 a number of fiscal measures. Three of the measures relate to EIB support;

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) 


  • In 2021, EIB Group provided a total of EUR 303 million new financing for transformational new investments in Cyprus:

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. 

  • EIB’s outstanding exposure to the country’s GDP places Cyprus at the top of all EU countries in which the EIB is operating. 
  • Since its first operation in Cyprus in 1981, EIB signed loans for a total of EUR 5bn, of which EUR 2.2bn (almost half of its lending) has been signed after the financial crisis, which clearly shows the exceptional support that Cyprus has received from the EIB.


  • Expected Signatures 2022

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.

  • Cyprus Equity Fund

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). 

  • Pipeline Of Projects

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


  • Once again thank you VP President for this visit and express our appreciation for all the support and we really look forward to an even closer cooperation with the EIB.
  • 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).
  • Express our satisfaction with the proposed projects under appraisal as well as the future projects in the pipeline which touch upon important sectors of our economy.

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