This Decision is addressed to the Slovak Republic.

4.The release of instalments in accordance with the Financing Agreement shall be conditional on available funding and a decision by the Commission, taken in accordance with Article 24 of Regulation (EU) 2021/241, that Slovakia has satisfactorily fulfilled the relevant milestones and targets identified in relation to the implementation of the recovery and resilience plan. Subject to the entry into force of the legal commitments referred to in paragraph 1, to be eligible for payment, milestones and targets shall be completed no later than 31 August 2026.

3.The pre-financing shall be released subject to the entry into force and in accordance with the Financing Agreement provided for in Article 23(1) of Regulation (EU) 2021/241. Pre-financing shall be cleared by being proportionally deducted against the payment of the instalments.

2.The Union financial contribution shall be made available by the Commission to Slovakia in instalments in accordance with the Annex. An amount of EUR 822 716 227 shall be made available as a pre-financing payment, equal to 13 % of the financial contribution. The pre-financing and instalments may be disbursed by the Commission in one or several tranches. The size of the tranches shall be subject to the availability of funding.

1.The Union shall make available to Slovakia a financial contribution in the form of non-repayable support amounting to EUR 6 328 586 359. An amount of EUR 4 642 807 510 shall be available to be legally committed by 31 December 2022. Subject to the update provided for in Article 11(2) of Regulation (EU) 2021/241 calculating an amount for Slovakia equal to or more than this amount, a further amount of EUR 1 685 779 848 shall be available to be legally committed from 1 January 2023 until 31 December 2023.

The assessment of the recovery and resilience plan of Slovakia on the basis of the criteria provided for by Article 19(3) of Regulation (EU) 2021/241 is approved. The reforms and investment projects under the recovery and resilience plan, the arrangements and timetable for monitoring and implementation of the recovery and resilience plan, including the relevant milestones and targets, the relevant indicators relating to the fulfilment of the envisaged milestones and targets, and the arrangements for providing full access by the Commission to the underlying relevant data are set out in the Annex to this Decision.

Article 1 Approval of the assessment of the recovery and resilience plan

(53)This Decision should be without prejudice to the outcome of any procedures relating to the award of Union funds under any other Union programme than Regulation (EU) 2021/241 or to procedures relating to distortions of the operation of the internal market that may be undertaken, in particular under Articles 107 and 108 of the Treaty. It does not override the requirement for Member States to notify instances of potential State aid to the Commission under Article 108 of the Treaty,

(52)Slovakia has requested the pre-financing of 13% of the financial contribution. That amount should be made available to Slovakia subject to the entry into force and in accordance with the Financing Agreement provided for in Article 23(1) of Regulation (EU) 2021/241.

(51)The support to be provided is to be financed from the borrowing by the Commission on behalf of the Union on the basis of Article 5 of Council Decision (EU, Euratom) 2020/2053. The support should be paid in instalments once Slovakia has satisfactorily fulfilled the relevant milestones and targets identified in relation to the implementation of the recovery and resilience plan.

(50)In accordance with Article 11(2) of Regulation (EU) 2021/241, the calculation of the maximum financial contribution for Slovakia is to be updated by 30 June 2022. As such, in accordance with Article 23(1) of that Regulation, an amount for Slovakia should be made available now for a legal commitment by 31 December 2022. Where necessary following the updated maximum financial contribution, the Council, on a proposal from the Commission, should amend this Decision to include the updated maximum financial contribution without undue delay.

(49)The estimated total cost of the recovery and resilience plan of Slovakia is EUR 6 575 000 000. As the recovery and resilience plan satisfactorily complies with the criteria for assessment set out in Regulation (EU) 2021/241 and, furthermore, as the amount of the estimated total costs of the recovery and resilience plan is higher than the maximum financial contribution available for Slovakia, the financial contribution allocated for Slovakia’s recovery and resilience plan should be equal to the total amount of the financial contribution available for Slovakia.

(48)Following the positive assessment of the Commission concerning Slovakia’s recovery and resilience plan with the finding that the plan satisfactorily complies with the criteria for assessment set out in Regulation (EU) 2021/241, in accordance with Article 20(2) of that Regulation, this Decision should set out the reforms and investment projects necessary for the implementation of the plan, the relevant milestones, targets and indicators, and the amount made available from the Union for the implementation of the plan in the form of non-repayable financial support.

(47)For the implementation phase of the plan, a Government Council for the plan is expected to be set up as an advisory body to ensure a structured dialogue with key stakeholders. To ensure ownership by the relevant actors, it is crucial to involve all local authorities and stakeholders concerned, including social partners, throughout the implementation of the investments and reforms included in the plan.

(46)The plan includes a summary of the consultation process carried out for its preparation and implementation. The preparations started in summer 2020. The National Integrated Reform Plan, published in October 2020 and prepared with stakeholder involvement, provided an analytical basis for the plan. Since autumn 2020, the preparations reflected upon the consultations of a wider range of stakeholders and general public. The standardised inter-ministerial consultation procedure received nearly 2 500 comments. The authorities made efforts to reflect upon the proposals by the public and stakeholders that often targeted environmental and climate issues. Due to the COVID-19 pandemic, public events were largely organised online.

(45)The plan proposes several cross-border projects, mostly to facilitate the digital transition. It should allow small and medium enterprises to benefit from services of the network of European Digital Innovation Hubs. Other projects include inter alia the investment into a high performance computer, to be part of the European High Performance Computing (EuroHPC) project, and a possible contribution to EU quantum communication and blockchain infrastructure, preparing cross-border connections with all neighbouring Member States. The plan includes a measure strengthening the electricity connection with Hungary, allowing for connection of more domestic renewables to the domestic grid. The plan includes support to broader participation of Slovak entities in projects of the EU Framework Programme for Research and Innovation, which should encourage companies to deliver highly innovative projects, and researchers and firms to access international consortia, thereby promoting internationalisation.

(44)The recovery and resilience plan of Slovakia confirms that a security self-assessment of investments into digital capacities under Regulation (EU) 2021/241 is expected to be an integral part of the implementation stage, as part of the analysis and design in the development of new IT systems. Slovakia intends to fund digital connectivity investments from other sources.

(43)The plan contains a series of measures that are expected to address the country’s challenges in the area of gender equality and equal opportunities for all. As regards gender equality, the plan foresees an early warning system for the prevention of early school leaving, which disproportionately affects women from disadvantaged backgrounds. That system includes mentoring and tutoring opportunities. To address the low availability of kindergarten facilities and its impact on women’s participation in the labour market and on children’s later school performance, a legal entitlement to a place in pre-school education facility for children from the age of three should be introduced. The part of the plan dealing with the inclusiveness of education includes reforms and investments to establish a system of educational support measures for students with special educational needs, to modernise the teacher training programmes, to reduce segregation in education and to promote early care services in marginalised Roma communities, as well as to improve access to higher education for disadvantaged students. The situation and needs of people with disabilities are addressed in several parts of the plan, including in relation to the renovation of buildings and their improved accessibility, sustainable transport, digitalisation and social and mental health care. The challenges faced by older people are also addressed, in particular through supporting their digital skills development and improving the quality and accessibility of the long-term, social and healthcare systems. The plan also includes a horizontal mechanism to take gender equality and equal opportunities for all into account in the implementation phase.

(42)The Slovak recovery and resilience plan presents a comprehensive package of reforms and investments mutually reinforcing each other with a strong reform drive. The plan is centred on three interconnected pillars of an innovative, sustainable and healthy country and five key policy areas, which are implemented through 18 components. Synergies are ensured in thematic components, such as education components as well as horizontally across a number of components such as when applying energy efficiency requirements for public buildings renovations or digital transition of the public administration. Investments in new information systems and data tools are systematically included. There is an evident balance between reforms and investments in each component. Some reforms are expected to have a cross-cutting impact on the efficiency of spending, such as the revision of public procurement legislation, or improvements to the business environment and the justice system. Reforms are in general concentrated in the first years, such as optimisation of the hospital network and research, development and innovation governance reform, so as to create conditions for effective investment. Complementarities with support under Cohesion policy funds are evident and presented in the components and summarised at the level of the plan to the extent possible at this stage. Demarcation lines are not always fully clear, as both the Partnership Agreement and Programme are still pending finalisation.

(41)In accordance with Article 19(3), point (k) and section 2.11 of Annex V to Regulation (EU) 2021/241, the plan includes to a high extent (Rating A) measures for the implementation of reforms and public investment projects that represent coherent actions.

(40)Measures to detect and avoid double funding are comprehensively included. The National Implementation and Coordination Authority will work to coordinate actors involved in implementing the Facility. It is clear from the plan that the responsible coordinating bodies for the Facility and Cohesion Policy funds will liaise to avoid double funding at the programming and implementing stage. While the arrangements for the checks to avoid double funding at the implementation stage are not very detailed, Slovakia has committed to put in place strong safeguards to ensure that double funding is avoided, both at strategic and at project level. The plan provides extensive information on the administrative capacity of the administration to implement and audit the RRF in Slovakia. It also gives extensive information on the legal mandates of the various bodies carrying out controls on the implementation of the plan. However, much of the legal basis rests on the “Recovery and Resilience Facility Act” which is still a draft. This means that the exact mandate and competence of the coordination body and all other implementing bodies will likely only be known after the adoption of the plan. Recovery and Resilience Facility Act will have entered into force by the time of the first payment request and at that moment not depart in any material way from the description provided in the plan. A milestone is to be included to this end. The fulfilment of this milestone, as well as the milestone referred to in the recital above, is a precondition for any disbursement under the Facility (except for pre-financing).

(39)In general, identification of the actors responsible for controls and audit in Slovakia is well explained and the independence and segregation of functions of the audit authority clearly set out, including how it is enshrined in Slovak legislation. The National Implementation and Coordination Authority is responsible for the preparation and transmission of applications for payment of financial support, the management declaration and the summary of audits. The audit actors, their relationships and their administrative capacity are also explained. Comprehensive information has been made available on measures taken to tackle serious irregularities and who is responsible for those measures. Those responsible will be trained and whistle-blower protection is enshrined in legislation, with the whistle-blowing office expected to be fully operational by September 2021. Management verifications by implementing Ministries/bodies will not only check the absence of serious irregularities but also the fulfilment of milestones and targets. Arrangements and mechanisms to collect, store and make available data on final recipients are explained and the recordkeeping obligation required by Art. 22(2), point (d) of Regulation (EU) 2021/241 is bestowed on implementing bodies and beneficiaries. A repository system for monitoring the implementation of the Facility should be put in place and operational by the time of the first payment request. The system should include, as a minimum, the following functionalities: (a) ensure the collection of data and monitoring of the achievement of milestones and targets; and (b) collect, store and ensure access to the data required by Article 22(2) point (d)(i) to (iii) of the Regulation. A milestone is to be included to this end.

(38)In accordance with Article 19(3), point (j) and section 2.10 of Annex V to Regulation (EU) 2021/241, the arrangements proposed in the recovery and resilience plan and the additional measures contained in this Decision are adequate (Rating A) to prevent, detect and correct corruption, fraud and conflicts of interests when using the funds provided under that Regulation, and the arrangements are expected to effectively avoid double funding from that Regulation and other Union programmes. This is without prejudice to the application of other instruments and tools to promote and enforce compliance with EU law, including for preventing, detecting and correcting corruption, fraud and conflicts of interests, and for protecting the Union finances in line with Regulation (EU, Euratom) 2020/2092 of the European Parliament and of the Council.

Protection of financial interests of the Union

(37)Pending finalisation of the Partnership Agreement and Programme for the Cohesion Policy programming period 2021-2027, the demarcation with other financing sources for projects in similar areas is not always clearly indicated. However, Slovakia has committed to put in place strong safeguards to ensure that double funding is avoided, both at strategic and at project level, for instance for the financing of different costs under the same measure. Finally, the estimated total cost of the recovery and resilience plan is in line with the principle of cost-efficiency and is commensurate to the expected national economic and social impact.

(36)For a limited number of measures, the targets or cost benchmarks are less clear, described in a relatively general manner, or based on little comparable information, or on information the reliability of which is harder to verify. Some cost estimates, often due to the unprecedented nature of the investments (such as in the areas of renewable energy, research, development and innovation, and digitalisation), lack comparable costing benchmarks. At the same time, in view of the lack of comparable precedents and the fact that bottom-up methodologies are explained to a large extent, Slovakia has provided explanations and justifications to a sufficient degree for those measures.

(35)Slovakia has provided robust justification, evidence and methodology for most costs that it should incur under the plan. Cost estimates, information and supporting documents have been provided to a relatively high extent. The methodologies used often refer to comparable projects undertaken in Slovakia in the recent past, including under Union funding. Where this was not possible, with a few limited exceptions, reasonable and plausible estimates have often been made with reliable calculations on the basis of information from other Member States or from certified and independent institutions. For various cost estimates, benchmarks are based on available market prices. Slovakia has provided validation of the cost estimates by independent bodies only to a limited extent, although the Value for Money Unit (an integrated part of the Ministry of Finance) has been indicated as independent validating entity for various components. Safeguards to guarantee its independence have been justified.

(34)In accordance with Article 19(3), point (i) and section 2.9 of Annex V to Regulation (EU) 2021/241, the justification provided in the plan on the amount of the estimated total costs of the recovery and resilience plan is to a medium extent (Rating B) reasonable and plausible, is in line with the principle of cost efficiency and is commensurate to the expected national economic and social impact.

(33)Member States should ensure that financial support under the Facility is communicated and acknowledged in line with article 34 of Regulation (EU) 2021/241. Technical support may be requested under the Technical Support Instrument to assist Member States in the implementation of their plan.

(32)Slovakia is setting up a comprehensive implementation system with a leading role of the National Implementation and Coordination Authority responsible for meeting the milestones and targets and requesting payments. For this purpose, the National Implementation and Coordination Authority will be entitled to request information from all entities involved – implementers, intermediaries, beneficiaries and other persons concerned - on the status of implementation of reforms and investments, including the corresponding milestones and targets. The scope and nature of milestones and targets is generally comprehensive and coherent. The timeframe of milestones and targets is reasonable, with reforms frontloaded and providing the basis for investments. The milestones and targets are considered well-designed with robust indicators ensuring proper monitoring and evaluation during the implementation.

(31)In accordance with Article 19(3) point (h) and section 2.8 of Annex V to Regulation (EU) 2021/241, the arrangements proposed in the recovery and resilience plan are adequate (Rating A) to ensure effective monitoring and implementation of the recovery and resilience plan, including the envisaged timetable, milestones and targets, and the related indicators.

(30)Investment measures are expected to support and enhance the positive impact of structural reforms in Slovakia’s recovery and resilience plan. Sizeable investment to modernise the railway system should attract more passengers to this sustainable mode of transport, aiding the green transition and supporting regional cohesion. The green investments into industry, including in energy generation, should contribute to the decarbonisation of that sector and cleaner air across Slovakia. An ambitious energy efficiency programme, combined with a reform of construction waste management allows for renovating the building stock, with a lasting impact on lowering emissions of that key sector and improving its circularity. Healthcare reforms are supported by investment in hospitals and other care facilities. Investment also leverages educational reforms, for example by providing digital equipment, training teachers, making the secondary school and university buildings barrier-free, or by building new kindergartens. Scholarship and development programmes are aimed at improving the access to and internationalisation of higher education. A large investment programme should also inject funding into a reformed research and innovation system, raising Slovakia’s attractiveness for companies and skilled workers alike, and with significant potential to diversify the economy towards higher value-added activities. Lasting impact of the plan can also be enhanced through synergies between the plan and other programmes, including those financed by the Cohesion policy funds, notably by addressing in a substantive manner the deeply rooted territorial challenges and promoting a balanced development.

(29)Slovakia’s plan encompasses a large set of structural reforms that are expected to have a lasting impact in many policy areas as well as on public administration and institutions. Notably, justice reforms and reforms in the fight against corruption and money laundering are expected to have a lasting impact, and therefore it is important that these reforms and their implementation are in line with EU law requirements on judicial independence. An appropriate involvement of the judiciary, stakeholders and civil society throughout the reform process is particularly important. In addition, digitalisation efforts across a wide range of institutions and public administration will structurally enhance efficiency and improve the quality of public services. A comprehensive reform package across all levels of education should improve the skills base of the population. Reforms in health and social care are expected to improve the effectiveness and efficiency of the health care system, which should in turn improve the population’s health status and alleviate disparities in health outcomes across socio-economic groups.

(28)In accordance with Article 19(3), point (g) and section 2.7 of Annex V to Regulation (EU) 2021/241, the recovery and resilience plan is expected to have a lasting impact on Slovakia to a large extent (Rating A).

(27)The quality and accessibility of e-government solutions should improve thanks to a new digital platform for providing user-centred public services, together with more efficient management of IT resources in the public administration. To complement this development of digital public services, Slovakia aims to strengthen and standardise cybersecurity across all sectors of public administration. Participation in four multi-country digital projects, including the deployment of Digital Innovation Hubs and joining the European High Performance Computing project, also strengthens the digital contribution of the plan.

(26)The plan puts forward an ambitious package of measures embracing the digital transformation of the Slovak economy and society. The measures in education put digital skills at their core, combining revised curricula, training of teachers and investments in digital equipment of schools together with digitalisation in higher education. In parallel, the plan includes the development of a digital skills strategy for adults at all ages to ensure their inclusion in the changing society as a result of digitalisation. The plan also introduces measures to create an effective governance model for the digital transformation. This should favour the development of a digital ecosystem and should ultimately benefit the economy at large. Support to digitalisation of companies, with a particular focus on SMEs, should allow them to remain competitive by streamlining production processes and using innovative technologies.

(25)In accordance with Article 19(3), point (f) and section 2.6 of Annex V to Regulation (EU) 2021/241, the recovery and resilience plan contains measures that contribute to a large extent (Rating A) to the digital transition or to addressing the challenges resulting from it. The measures supporting digital objectives account for an amount which represents 21% of the plan’s total allocation calculated in accordance with the methodology of Annex VII to Regulation (EU) 2021/241.

(24)Reforms and investments related to landscape planning, nature protection and water management are expected to help address the challenges Slovakia faces with respect to climate adaptation and protection of water sources, nature and biodiversity.

(23)Reforms and investments in renewable energy sources, aimed notably at improving the access of renewables to the grid, along with an ambitious programme of building renovations based on high energy efficiency standards as well as the industry decarbonisation scheme, are expected to help Slovakia achieve its 2030 decarbonisation objectives and to support the transition to the circular economy. A comprehensive package of reforms and investments in transport should support electro-mobility, public transport of passengers and intermodal transport of goods. This is expected to boost the overall mobility ecosystem, which should benefit the Slovak economy.

(22)In accordance with Article 19(3), point (e) and section 2.5 of Annex V to Regulation (EU) 2021/241, the recovery and resilience plan contains measures that contribute to a large extent (Rating A) to the green transition, including biodiversity, or to addressing the challenges resulting therefrom. The measures supporting climate objectives account for an amount which represents 43% of the plan’s total allocation calculated in accordance with the methodology of Annex VI to Regulation (EU) 2021/241. In accordance with Article 17 Regulation (EU) 2021/241, the recovery and resilience plan is consistent with the information included in the National Energy and Climate Plan 2030.

(21)Slovakia has conducted a complete ‘do no significant harm’ assessment of all measures included in the plan following the “do no significant harm” technical guidance of the European Commission (2021/C 58/01). The potential harmful environmental impact of all relevant measures is addressed through appropriate assurances and mitigating measures ensured through the monitoring arrangements. These mitigating measures are reflected in milestones and targets applicable to industry decarbonisation, building renovations, including boiler replacement, hydropower, biomass use, RDI investment schemes and financial instruments to support innovation.

(20)In accordance with Article 19(3), point (d) and section 2.4 of Annex V to Regulation (EU) 2021/241, the recovery and resilience plan is expected to ensure that no measure (Rating A) for the implementation of reforms and investments projects included in the recovery and resilience plan does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852 of the European Parliament and of the Council (the principle of ‘do no significant harm’).

(19)The wider availability of mental health care is in line with the strategy of de-institutionalisation. In addition, the focus on home-based and community-based provision of the long-term care services, reinforcing of palliative care and addressing the fragmented governance of that sector are important steps on the way to promote access to affordable and quality long-term care services. The modernisation of the hospital network should help increase quality and cost-effectiveness of health services, while improving their accessibility in less developed regions as well. This should also be achieved through investments aimed at improving the accessibility of primary care services in underserved regions. Infrastructure investments related to green transition, in particular a buildings renovation programme, should create new job opportunities in the construction sector across Slovakia, including for low-skilled workers.

(18)The plan is expected to reduce social inequalities and territorial disparities within the country. Eastern and Central Slovakia tend to perform significantly worse than the western part of the country, in terms of various interconnected labour market and social indicators, such as the share of high skilled workers, long-term and youth unemployment, and enrolment rate of children in pre-school facilities. Challenges concerning inequalities in education are expected to be addressed by the reform of school curricula fostering key competences and digital skills, and establishing the system of educational supportive measures. As students’ educational outcomes are strongly determined by their socio-economic background, reforms targeted at improving the accessibility and quality of early childhood education and care, enhancing the consulting services, curbing segregation and eliminating the two-shift classes at schools are included in the plan. These reforms are expected to reduce early school leaving, in particular among the disadvantaged students, thereby contributing to enhancing social mobility and equality of opportunities. The comprehensive reforms and investments in higher education are expected to improve its quality and relevance by changing the governance, financing, accreditation and scientific evaluation systems. The development of formal long-term care services together with kindergartens should alleviate the disproportionate burden on families, especially on women caring for dependants and enable them to participate in the labour market. These policies are in line with the principles of the European Pillar of Social Rights.

(17)In the medium to long run, investments together with the planned reforms are expected to help addressing the current challenges to growth potential, and facilitate the country’s transition to a more diversified economic model with stronger focus on higher value-added activities. This should help the Slovak economy to remain competitive, resilient and adapt to the industrial trends of automation and digital change. Implementing the recovery and resilience plan is therefore expected to raise potential output and to have a lasting impact on the economic performance of Slovakia. Most of this long-run effect stems from measures encouraging research, development and innovation activities, such as the governance reform of research and development and innovation, improving both coordination and funding. It also stems from improving human capital and the size and skill composition of the labour force by extending pre-primary education, reforming the school curriculum, and improving the quality and relevance of higher education, aiming to raise productivity in Slovakia.

(16)Simulations by the Commission show that the plan has the potential to increase the GDP of Slovakia by between 1,3% and 1,8% on average during the period of 2021-2026. The implementation of the recovery and resilience plan is expected to contribute significantly to economic growth and job creation in Slovakia. The investments included in the plan should provide a boost to aggregate demand in the short to medium term, improving the cyclical position of the Slovak economy, and thereby mitigating the adverse economic effects of the COVID-19 crisis. The focus of investments on construction and renovation projects, in full compliance with the DNSH principle, is particularly beneficial in this respect, given how hard the Slovak construction sector has been hit by the pandemic.

(15)In accordance with Article 19(3), point (c) and section 2.3 of Annex V to Regulation (EU) 2021/241, the recovery and resilience plan is expected to have a high impact (Rating A) on strengthening the growth potential, job creation, and economic, social and institutional resilience of Slovakia, contributing to the implementation of the European Pillar of Social Rights, including through the promotion of policies for children and youth, and on mitigating the economic and social impact of the COVID-19 crisis, thereby enhancing the economic, social and territorial cohesion and convergence within the Union.

(14)The challenge of accelerating the green and digital transition is tackled adequately by the set of measures included in Slovakia’s recovery and resilience plan. Long-standing challenges in the area of education, childcare, health care, as well as research, development and innovation are also addressed with comprehensive measures that are expected to tackle the most serious shortcomings, such as the low quality and inclusiveness of education, fragmented research, development and innovation policy coordination, insufficient public-private cooperation, and weak research, development and innovation performance. Additional measures proposed in the plan to improve the justice system, public procurement and the fight against money laundering have the potential to contribute to effectively addressing many of the underlying challenges. Several reforms are moreover expected to improve the long-term sustainability of public finances.

(13)The plan includes an extensive set of mutually reinforcing reforms and investments that contribute to effectively addressing all or a significant subset of the economic and social challenges outlined in the country-specific recommendations addressed to Slovakia by the Council in the European Semester in 2019 and in 2020, notably on inclusive education, public governance and productivity-enhancing investment into the green and digital transition, as well as its contribution to decreasing regional divergences.

(12)The recommendations related to the immediate fiscal policy response to the pandemic can be considered as falling outside the scope of Slovakia’s RRP, notwithstanding the fact that Slovakia has generally responded adequately and sufficiently to the immediate need to support the economy through fiscal means in 2020 and 2021, in line with the provisions of the General Escape Clause. Moreover, the recommendation to achieve the medium-term budgetary objective in 2020 is no longer relevant, due both to the lapsing of the corresponding budgetary period and the activation in March 2020 of the General Escape Clause of the Stability and Growth Pact in the context of the pandemic crisis.

(11)In accordance with Article 19(3), point (b) and section 2.2 of Annex V to Regulation (EU) 2021/241, the recovery and resilience plan is expected to contribute to effectively addressing all or a significant subset of challenges (Rating A) identified in the relevant country-specific recommendations, including fiscal aspects thereof, addressed to the Member State concerned or challenges identified in other relevant documents officially adopted by the Commission in the context of the European Semester.

Addressing all or a significant subset of challenges identified in Country Specific Recommendations

(10)The plan presents well-targeted policy actions relevant for smart, sustainable and inclusive growth. Innovation potential and productivity growth are expected to be boosted through measures to improve the research, development and innovation ecosystem, business environment, the quality and relevance of higher education as well as educational outcomes, including the school curricular reform and better preparation of teachers. Small and medium-sized enterprises should benefit from the strong demand impulse triggered by the investments supported by the plan as well as from the targeted assistance to innovate and digitalise. The plan identifies the right socio-economic challenges for social and territorial cohesion, and includes relevant actions to address them. It aims particularly at strengthening the inclusion in education of children with special educational needs and children with disadvantaged socio-economic backgrounds, including the Roma population. Cohesion concerns and regional disparities are addressed through the ambitious reform of hospital care, as well as through digitalisation measures for public administration. The plan is also expected to improve health and economic, social and institutional resilience. In the area of healthcare, the plan presents a comprehensive set of reforms and investments aimed at improving the resilience, efficiency, accessibility and quality of the Slovak healthcare system. The investments primarily focus on hospital care, long-term care, mental health and primary care. Investments into early warning systems and infrastructure can be expected to improve crisis response capacity. The pension reform is expected to make Slovakia less vulnerable to sustainability risks. Policies for the next generation are in particular covered by the comprehensive package of measures aiming at improving education at all levels, from early childhood education and care to higher education.

(9)The green transition and digital transformation of the economy are at the core of the plan’s design. The green reforms and investments included in the plan aim at increasing renewable energy sources and their integration into the grid, improving energy and green performance of buildings, increasing the share of sustainable transport modes and decarbonising industrial processes, thus contributing to the objectives of climate change mitigation and reduction of air pollution. Important reforms and investments are envisaged to increase the resilience of the landscape and ecosystems to climate change with an emphasis on revitalisation of water courses. Digital reforms and investments should help to modernise Slovakia, supporting areas with the largest investment gaps. Those include, in particular, digitalisation of public services and schools, development of digital skills and support to innovation.

(8)The plan puts forward a balanced set of reforms and investments addressing both the consequences of the COVID-19 pandemic and the main structural socio-economic and environmental challenges affecting Slovakia, pursuing cohesion objectives and contributing towards all of the six pillars referred to in Article 3 of Regulation (EU) 2021/241. It presents a wide set of measures for an innovative economy, supporting economic growth notably through investing in the twin green and digital transitions, including by investing in education and skills. The overarching objective is to achieve sustainable growth and a forward-looking transformation of the Slovak economy and society, thereby increasing the quality of life. The plan focuses on five key policy areas: green economy, education, science and innovation, health, and public administration and digitalisation. For all five key areas, the plan makes an explicit and coherent explanation of how they contribute to the six pillars. Such an approach contributes to ensuring that each pillar is comprehensively addressed.

(7)In accordance with Article 19(3), point (a) and section 2.1 of Annex V to Regulation (EU) 2021/241, the recovery and resilience plan represents to a large extent (Rating A) a comprehensive and adequately balanced response to the economic and social situation, thereby contributing appropriately to all six pillars referred to in Article 3 of Regulation (EU) 2021/241, taking the specific challenges and the financial allocation of the Member State concerned into account.

(6)The implementation of the Member States’ recovery and resilience plans will constitute a coordinated effort of investment and reforms across the Union. Through the coordinated and simultaneous implementation of these reforms and investments and the implementation of cross-border projects, these reforms and investments will mutually reinforce each other and generate positive spillovers across the whole Union. Therefore, about one third of the impact of the Facility on Member States’ growth and job creation will come from spillovers from others Member States.

(5)The recovery and resilience plans should pursue the general objectives of the Recovery and Resilience Facility established by Regulation (EU) 2021/241 and of the EU Recovery Instrument set up by Council Regulation (EU) 2020/2094 in order to support the recovery in the aftermath of the COVID-19 crisis, as well as to promote the Union´s economic, social and territorial cohesion by contributing to the six pillars referred to in Article 3 of Regulation (EU) 2021/241.

(4)On 29 April 2021, Slovakia submitted its national recovery and resilience plan to the Commission, in accordance with Article 18(1) of Regulation (EU) 2021/241. That submission followed a consultation process, conducted in accordance with the national legal framework, of local and regional authorities, social partners, civil society organisations, youth organisations and other relevant stakeholders. The national ownership of the recovery and resilience plans is underpinning their successful implementation and lasting impact at national level and credibility at European level. Pursuant to Article 19 of that Regulation, the Commission has assessed the relevance, effectiveness, efficiency and coherence of recovery and resilience plan, in accordance with the assessment guidelines of Annex V to that Regulation.

(3)[The Council recommendation on the economic policy of the euro area recommended to euro area Member States to take action, including through their recovery and resilience plans, to, inter alia, ensure a policy stance which supports the recovery and to further improve convergence, resilience and sustainable and inclusive growth. The Council recommendation also recommended to strengthen national institutional frameworks, to ensure macro-financial stability and to complete EMU and strengthen the international role of the euro.] [If the Council recommendation is not adopted by the time of the CID adoption, the recital will be removed].

(2)On 9 July 2019 and on 20 July 2020, the Council addressed recommendations to Slovakia in the context of the European Semester. In particular, the Council recommended to take measures to support the economic recovery while safeguarding long-term fiscal sustainability; to strengthen the resilience of the healthcare system; to improve the quality and inclusiveness of education at all levels and foster skills; to focus economic policy on investment into the digital and green transition and other areas, taking into account regional disparities; to improve the effectiveness and integrity of the justice system, fighting corruption and money laundering, and to ensure quality public services and a favourable business environment. Having assessed progress in the implementation of these country-specific recommendations at the time of submission of the recovery and resilience plan, the Commission finds that substantial progress has been achieved with respect to the recommendations on taking all necessary measures to effectively address the pandemic and on providing adequate income replacement.

(1)The COVID-19 outbreak has had a disruptive impact on the economy of Slovakia. In 2019, the gross domestic product per capita (GDP per capita) of Slovakia was 55% of the EU average. According to the Commission’s 2021 Spring forecast, the real GDP of Slovakia declined by 4,8% in 2020 and is expected to decline by 0,2% cumulatively in 2020 and 2021. Longer-standing aspects with an impact on medium-term economic performance include in particular the concentration of economic activity in traditional manufacturing with low rates of innovation and value added amid skill gaps; moreover, a high regulatory burden and shortcomings in public administration and the justice system hamper private investments.

Having regard to the proposal from the European Commission,

Having regard to Regulation (EU) 2021/241 of the European Parliament and of the Council of 12 February 2021 establishing the Recovery and Resilience Facility and in particular Article 20 thereof,

Having regard to the Treaty on the Functioning of the European Union,

on the approval of the assessment of the recovery and resilience plan for Slovakia

on the approval of the assessment of the recovery and resilience plan for Slovakia

EUROPEAN COMMISSION Brussels, 21.6.2021 COM(2021) 339 final ANNEX

to the Proposal for a Council Implementing Decision on the approval of the assessment of the recovery and resilience plan for Slovakia {SWD(2021) 161 final}



ANNEX SECTION 1: REFORMS AND INVESTMENTS UNDER THE RECOVERY AND RESILIENCE PLAN 1. Description of Reforms and Investments COMPONENT 1: Renewable energy sources and energy infrastructure The purpose of the ‘renewable energy sources and energy infrastructure’ component of the Slovak recovery and resilience plan is to contribute directly to attaining the 2030 climate change targets. According to the Slovak National Energy and Climate Plan, achieving the climate objectives shall require a significant shift towards renewable energy sources in the Slovak energy mix. In this context, this component of the Slovak recovery and resilience plan aims at supporting faster roll-out of renewable investments. In view of this goal, the reforms shall modernise the Slovak electricity market and create an appropriate legislative environment. The law amendments shall particularly improve the access for new market participants, increase certainty and confidence in the state support measures and improve integration of renewables to the Slovak electricity grid. The investment support shall be channelled to increasing the capacities of new renewable sources as well as to the repowering of existing renewable installations, including modernisation of biogas and hydropower-stations. The investments into increasing flexibility of the electricity grid shall include support to new battery storages, including hydrogen-based solutions, as well as to increasing the electricity balancing capacity of hydropower installations. The component includes two reforms and three investments. These measures contribute to the green transition and climate neutrality objective, as well as to meeting Slovakia’s National Energy and Climate Plan commitments. The component strengthens the strategic autonomy and security of Slovakia through increasing the share of domestic energy sources, as imports from third countries account for a significant part of its consumption. The investments shall add to the job creation at local level, including for SME sector. It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01). The investments and reforms shall contribute to addressing the Country Specific Recommendation conveyed to Slovakia in 2020, on the need to “focus investment on the green digital transitions, in particular on clean and efficient production and use of energy and resources” (Country Specific Recommendation 3/2020). A.1. Description of the reforms and investments for non-repayable financial support Reform 1: Adapting of the electricity legal framework The purpose of the reform is to improve the legal framework of the Slovak electricity market by amending Act 251/2012 Coll. on energy and Act 250/2012 Coll. on regulation in network industries in accordance with the requirements of Directive 2019/944. Furthermore, the adapted legal structure shall facilitate the new activities and access of participants to the electricity market (energy communities, aggregator, self-consumer, electricity storage), while increasing overall flexibility of electricity system and improving the possibilities for connecting of new renewables to the Slovak grid. This reform also foresees (under Milestone 2) a measure aiming at releasing the technical capacities for electricity transmission within the domestic electricity system, facilitated through the increase in capacity of the electricity interconnection profile between Slovakia and Hungary. The implementation of the reform shall be completed by 31 December 2022. Reform 2: The legal framework for the promotion of renewable energy sources The purpose of the reform is to promote the roll-out of new renewable energy sources. The new law amendments shall create efficient support mechanisms for increasing the share of renewables in transport, electricity and heating sector. The legal framework shall be modified by amending the Acts 309/2009 Coll. on promotion of renewable energy sources and high-efficiency cogeneration and the Act 657/2004 Coll. on thermal energy. The reform shall also include the adoption of a long-term auctioning plan for new renewable sources. This measure shall contribute to better predictability of the overall installed renewable capacity, creating more favourable investment environment for private investors. Furthermore, the reform shall incorporate the adoption of investment schemes for support of the renewable electricity sources. The Ministry of Economy shall adopt an auction scheme for new renewable energy sources (link to Investment 1, Component 1) and support schemes for investments on repowering (link to Investment 2, Component 1) and increasing flexibility of the electricity system (link to Investment 3, Component 1). The investment policies of the schemes shall strictly adhere to both EU and national environmental legislation as well as to the Do-Not-Significant-Harm Technical Guidance (2021/C58/01) of supported activities and companies. Only investments into hydropower that are in line with the EU acquis shall be supported by the Slovak recovery and resilience plan.

The implementation of reform shall be completed by 31 December 2022. Investment 1: Construction of the new renewable electricity sources The purpose of the measure is to support the roll out of investments into the new renewable sources of electricity. Of the overall objective to increase the new renewable electricity capacity by 122.4 MW, the support scheme shall deliver at least 120 MW of new capacity induced by the new renewable sources under the measure connected to the grid. The competitive auction mechanism shall be open to a wide range of renewable technologies, with clear project delivery deadlines and rules. No investments to hydropower shall be eligible under Investment 1 (Component 1). The Ministry of Economy shall be responsible for the implementation of the scheme and collecting the information on realised capacity from project promoters. The auction support scheme shall respect the investment policies as set out under the milestone 3 of the Component 1 (Reform 2: Legal framework for the promotion of renewable energy sources’). The implementation of the investment is expected to start by 30 June 2021 and shall be completed by 30 June 2026. Investment 2: Modernising the existing renewable electricity sources (repowering) The objective of the measure is to extend the technological lifetime, upgrade and increase the efficiency of existing renewable energy source capacities. The modernization shall concern the transformation of biogas stations and of hydropower plants. The scheme shall deliver at least 100 MW of modernised renewable capacity for electricity generation (repowering) connected to the grid, supported under the measure. The Ministry of Economy shall be responsible for the implementation of the investment and collecting the information on realised capacity from project promoters. The support for the different types of modernized renewable equipment shall be assessed separately, taking into account the principle of cost-effectiveness. The support schemes shall respect the investment policies as set out under the milestone 3 of the Component 1 (Reform 2: Legal framework for the promotion of renewable energy sources’). The implementation of the investment is expected to start by 1 January 2022 and shall be completed by 30 June 2026. Investment 3: Increasing the flexibility of electricity systems for greater integration of renewables The purpose of the investment is to increase the flexibility of Slovak electricity network. The phasing out of the flexible fossil electricity sources causes a loss of balancing performance, with a negative impact on the system’s ability to integrate variable renewable energy sources. The investment shall target the support to electricity storages facilities, including hydrogen-based solutions, and to increasing the electricity balancing capacity in hydro-power plants. The support scheme shall deliver at least 68 MW cumulative increase of balancing capacity, induced by the new storage capacities and increase of balancing capacity of existing hydropower plants, connected to the grid. The exact breakdown of 68 MW target shall depend on demand of relevant subjects. The investments into the balancing capacity of the hydropower plants shall not exceed EUR 12 000 000 under the measure. The investments shall be highly complementary to other actions in the component, as it contributes to increasing the free grid capacity for integrating the renewable energy sources. The support shall be granted under the technologically specific schemes, taking into account the principle of cost-effectiveness. The schemes shall respect the conditions on investment policies as specified under the milestone 3 of the Component 1 (Reform 2: Legal framework for the promotion of renewable energy sources’). The implementation of the investment is expected to start by 1 January 2022 and shall be completed by 30 June 2026. A.2. Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support. Seq. Num. Related measure (Reform or Investment) Milestone / Target Name Qualitative indicators (for milestones) Quantitative indicators (for targets) Indicative timeline for completion Description and clear definition of each milestone and target Unit of measure Baseline Goal Quarter Year 1 1 – Renewable energy sources and energy infrastructure – Reform 1: Adapting the electricity legal framework Milestone Reform of electricity market Entry into force of legislative amendments to the Act on energy and Act on regulation in network industries Q4 2022 The legal framework shall be modified by amending Act 251/2012 Coll. on energy and Act 250/2012 Coll. on regulation in network industries to transpose the Directive 2019/944. Furthermore, the updated legal framework shall facilitate the new activities and access of participants to the electricity market (energy communities, aggregator, self-consumer, electricity storage), while increasing overall flexibility of the electricity system and improving the possibilities for connecting of new renewable sources to the Slovak grid. 2 1 – Renewable energy sources and energy infrastructure – Reform 1: Adapting the electricity legal framework Milestone Release of restrictions on technical capacities for electricity transmission within the Slovak electricity system Joint public declaration by the Ministry of Economy and the Slovak transmission system operator Slovenská elektrizačná prenosová sústava, a.s. Q2 2021 The Slovak Ministry of Economy and the Slovak electricity transmission system operator Slovenská elektrizačná prenosová sústava, a.s. shall declare the release of restrictions on technical capacities for electricity transmission within the Slovak electricity system and an increase of capacity for connecting renewable sources to the grid. The measure shall be facilitated through the increase in net transfer capacity of transmission interconnections with the Republic of Hungary. 3 1 – Renewable energy sources and energy infrastructure – Reform 2: The legal framework for promotion of renewable energy sources Milestone Framework for supporting the investments into new renewable sources Entry into force of legislative amendments to the Act on the promotion of renewable energy sources and high-efficiency cogeneration and to the Act on thermal energy. Adoption of a long-term auctioning plan by the Ministry of Economy Adoption of investment schemes by the Ministry of Economy for the promotion of new sources of electricity from renewable energy sources (defined in Investment 1), investments to repowering (defined in Investment 2) and investments increasing flexibility of the electricity system (defined in Investment 3) Q4 2022 The legislative amendments shall create support mechanisms for increasing the share of renewable energy sources in transport, electricity and heating sector. The legal framework shall be modified by amending the Acts 309/2009 Coll. on promotion of renewable energy sources and high-efficiency cogeneration and the Act 657/2004 Coll. on thermal energy. The Ministry of Economy shall adopt a long-term auctioning plan for new renewable sources, contributing to better predictability of the increase in capacity of new renewable capacity. The Ministry of Economy shall adopt the new auction scheme for new sources of electricity from renewable energy sources (defined in Investment 1), the support schemes to investments on repowering (defined in Investment 2) and increasing flexibility of the electricity system (defined in Investment 3). The schemes shall detail the eligibility criteria for supported companies, ensuring compliance with the EU and national environmental acquis as well as the DNSH Technical Guidance (2021/C58/01) of supported activities and/or companies, while increasing the new RES capacities as detailed in corresponding targets (for Investments 1, 2 and 3). The biomass projects shall achieve at least 80% GHG emissions saving according to the GHG saving methodology and the relative fossil fuel comparator set out in Annex VI to Directive (EU) 2018/2001. Only investments into hydro-power that are in line with the EU acquis shall be supported. 4 1 – Renewable energy sources and energy infrastructure – Investment 1: Construction of the new renewable electricity sources Target New renewable energy source capacity MW 0 120 Q2 2026 Of the overall objective to increase the new renewable electricity capacity by 122.4 MW, the support scheme shall under the measure deliver at least 120 MW of new renewable electricity sources capacity connected to the grid. The support mechanism shall take the form of auctions for investment support for new sources of electricity from renewable energy sources. The support scheme shall respect the conditions on investment policies as specified under the milestone 3 (‘1 – Renewable energy sources and energy infrastructure - Reform 2: Legal framework for the promotion of renewable energy sources’). 5 1 – Renewable energy sources and energy infrastructure – Investment 2: Modernising the existing renewable electricity sources (repowering) Target Reconstructed renewable energy source capacity MW 0 100 Q2 2026 At least of 100 MW increase in modernised renewable capacity for electricity generation (repowering), induced by connection to the grid of the modernized renewable electricity sources under the measure. The support for the different types of modernized equipment shall be assessed separately, taking into account the principle of cost-effectiveness. The modernization shall concern the transformation of biogas stations and of hydropower plants. The support schemes shall respect the conditions on investment policies as specified under the milestone 3 (‘1 – Renewable energy sources and energy infrastructure - Reform 2: Legal framework for the promotion of renewable energy sources’). 6 1 – Renewable energy sources and energy infrastructure – Investment 3: Increasing flexibility of electricity systems for greater renewables integration Target Cumulative increase in capacity of installations increasing the flexibility of energy systems MW 0 68 Q2 2026 At least 68 MW increase of new electricity storage facilities, induced by the entry into operation of the new storage capacities under the measure. The scheme shall support the installation of new capacity of battery systems, installation of new capacity of hydrogen cells and an increase in the balancing capacity of the hydropower plants. The exact breakdown of 68 MW target will depend on demand of relevant subjects. The investments into the balancing capacity of the hydropower plants shall not exceed EUR 12 000 000 under the measure. The support shall be granted under the technologically specific schemes, taking into account the principle of cost-effectiveness. The support schemes shall respect the conditions on investment policies as specified under the milestone 3 (‘1 – Renewable energy sources and energy infrastructure - Reform 2: Legal framework for the promotion of renewable energy sources’). COMPONENT 2: Renovation of buildings According to the Slovak National Energy and Climate Plan and the Long-term renovation Strategy for Buildings, reaching the 2030 and 2050 EU emission reduction objectives requires a significant shift from the implementation of partial to medium (30-60% primary energy savings) and deep (over 60%) renovation of buildings.

This component of the Slovak recovery and resilience plan aims at reduction of energy consumption by pursuing a comprehensive renovation of family houses, public historic and listed buildings. It combines measures to improve energy performance of buildings by achieving at least 30% of primary energy savings with measures to foster climate adaptation (such as installing green roofs, water retention system). The component contributes to the climate and environmental objectives, while boosting the recovery and competitiveness of the construction sector by creating more jobs, in particular for SMEs at local level. It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01). The component includes 3 reforms and 2 investments. These investments and reforms shall contribute to addressing the Country Specific Recommendations addressed to Slovakia in the past two years, on the need to “focus investment-related policy on energy efficiency” (Country Specific Recommendation 3/2019) and to “focus investment on the green transition” (Country Specific Recommendation 3/2020). A.1. Description of the reforms and investments for non-repayable financial support .Reform 1: The harmonisation of support mechanisms for the renovation of family houses. The objective of the reform is to map, align and bring together different support schemes, to uniform and streamline the renovation process, and to provide incentives to owners for implementing a wider range of renovation measures. Design of the support schemes, criteria and conditions as well as implementation steps shall be outlined in the implementation plan to be published by Slovak Environmental Agency by 30 September 2022. To ensure effective and timely implementation, capacities of the Slovak Environmental Agency shall be strengthened. In the implementation phase, house owners shall be reached out to through a communication campaign and to-be-established regional offices as well as by providing a technical assistance and consultation. The implementation of the reform shall be completed by 30 September 2022. Investment 1: Improving energy efficiency of family houses. The objective of the investment is to complete the renovation of at least 30 000 single family houses, while achieving on average at least 30% primary energy savings. The investment is targeted to the owners of older family houses. In addition to traditional energy savings measures such as thermal insulation, window replacement, the mechanism shall enable replacing inefficient heat and hot water sources with high efficiency installations or installing new renewable energy devices. Where possible, measures to increase climate resilience of buildings (such as vegetation roofs, rainwater capture) shall apply. To mobilise the comprehensive and green renovation, support schemes shall include a combination of mandatory and optional part. A financial contribution of owners is expected. Energy savings shall be verified primarily through energy performance certificates or other corresponding documents. Investment measures linked to renovation of buildings shall comply with DNSH requirements, including, the prevention and recycling of construction and demolition waste and the boiler replacement scheme, which shall be a small part of the overall renovation programme. The implementation of the investment is expected to start at the latest by 30 September 2022 and shall be completed by 30 June 2026. Reform 2: Increasing transparency and streamlining decisions of the Monuments Board of the Slovak Republic.

The reform aims at improving quality and efficiency of the decision-making process of the Monuments Board of the Slovak Republic by developing three methodologies to: -classify the monuments endowment, -set objective criteria by which Monuments Board makes decisions and -quantify the costs associated with the interventions of the Monuments Board In addition, the objective is to reform the mapping of state-owned monuments by assessing their technical, construction and energy-related aspects. The mapping shall result in issuing at least 1000 construction passports of relevant state-owned monument buildings. The reform shall facilitate investment decisions on renovation with a view to preserving the monumental value as well as improving energy efficiency, where applicable. The implementation of the reform shall be completed by 31 December 2023. Investment 2: Renovation of historical and listed public buildings. Historical and listed public buildings are among the worst energy performing buildings and require a tailored-made approach to preserve and protect their cultural value and heritage. The objective of the investment is to improve the energy performance and structural conditions of the historical and listed public buildings while protecting its historical and cultural values and improving accessibility of the buildings. Of the overall objective is to renovate 130 000 m2, at least 117 000 m2 floor areas of historical and listed public buildings are renovated, while achieving on average at least 30% of primary energy savings. The investment is expected to result in renovation of around 100 buildings and shall be accompanied by an information campaign. Energy savings shall be monitored and verified through energy performance certificates. Investment measures linked to renovation of buildings shall comply with DNSH requirements, including the prevention and recycling of construction and demolition waste and the boiler replacement scheme, which shall be a small part of the overall renovation programme. The implementation of the investment shall be completed by 30 June 2026. Reform 3: The management of construction and demolition waste. The reform addresses the very low recycling rate of Slovakia and is centred on the revision of waste management legislation to increase the potential of the circular economy in the construction and demolition waste. The Ministry of Environment of the Slovak Republic shall table the waste legislation amendment, which shall require that at least 70% of non-hazardous construction and demolition waste generated on construction is prepared for re-use or sent for recycling. In addition, the reform shall introduce a mandatory selective demolition, quality standards for recycling from construction and demolition waste, mandatory green public procurement for the contracting of construction works, simplify the rules and improve data collection systems for construction waste. Once in force, the legislation shall ensure “do-no-significant harm” compliance with the requirement of the 70% recycling and reusing of non- hazardous demolition and construction waste to apply to renovation and construction of buildings financed under the Recovery and Resilience Facility. . The implementation of the reform shall be completed by 30 June 2022.

A.2. Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support. Seq. Num. Related measure (Reform or Investment) Milestone / Target Name Qualitative indicators (for milestones) Quantitative indicators (for targets) Indicative timeline for completion Description and clear definition of each milestone and target Unit of measure Baseline Goal Quarter Year 1 2 – Renovation of buildings – Reform 1: The harmonisation of support mechanisms for the renovation of family houses Milestone Implementation plan to mobilize green renovation of family houses Adoption of the implementation plan by the Ministry of Environment Q3 2022 The implementation plan shall map different support schemes and harmonise them. It shall detail preparation for the start-up of the scheme, timetable and its administration as well as the monitoring of the reconstruction and verification of energy savings primarily by energy performance certificates, or other corresponding documents. The schemes shall be designed to incentivize on an average at least 30% primary energy savings and comply with “Do no significant harm” Technical Guidance (2021/C58/01) requirements. 2 2 – Renovation of buildings – Reform 1: Improving the energy efficiency of family houses Milestone Launch of the support schemes to mobilise energy savings and green renovation Launch of the support schemes to mobilise energy savings and green renovation Q3 2022 The schemes to mobilise energy savings and green renovation shall be designed and launched in line with the measures and schedule adopted by implementation plan. Respective calls will be published by the Slovak Environmental Agency at a website. 3 2 – Renovation of buildings – Investment 1: Improving the energy efficiency of family houses Target Number of renovated family houses achieving on average at least 30 % primary energy savings Number 0 18000 Q4 2024 18 000 single family houses shall be renovated in line with the requirements of the support schemes including the compliance with the DNSH principle and to provide incentives for achieving on an average at least 30% primary energy savings and additional complementary measures. A list of possible measures includes: insulation, replacement of windows, restoration of roof, rainwater retention, boiler replacement or removal of asbestos cover, or other measures in line with the text of the component. Energy savings of the renovated houses shall be verified primarily through the energy performance certificate, or other corresponding documents. RRF financed investments shall not provide the support of biomass boilers. 4 2 – Renovation of buildings – Investment 1: Improving the energy efficiency of family houses Target Number of renovated family houses achieving on average at least 30 % primary energy savings Number 18 000 30 0000 Q2 2026 In total 30 000 single family houses shall be renovated in line with the requirements of the schemes including the compliance with the DNSH principle and to provide incentives for achieving o an average at least 30% primary energy savings and additional complementary measures. A list of possible measures includes: as insulation, replacement of windows, restoration of roof, rainwater retention, boiler replacement or removal of asbestos cover, or other measures in line with the text of the component and the costing provided. Energy savings of the renovated houses shall be verified primarily through the energy performance certificate, or other corresponding documents. RRF financed investments shall not provide the support of biomass boilers. 5 2. Renovation of buildings – Reform 2: Increasing transparency and streamlining decisions of the Monuments Board of the Slovak Republic Milestone Methodologies for the decision-making process of the Monuments Board of the Slovak Republic Publication of methodologies by the Monuments Board 3 Q4 2023 Development and adoption of the three methodologies to classify monument buildings in order to increase the transparency, public acceptance and speed up the decision-making processes of the Monuments Board of the Slovak Republic. Based on standardised methodologies, at least 1000 construction passports shall be issued by the Monument Board to provide diagnoses of the technical as well as energy aspects of the relevant state-owned monuments to facilitate renovation decisions. 6 2- Renovation of buildings – Investment 2: Renovation of public historical and listed buildings Target Overall area (m2) of renovated public historical and listed buildings achieving at least 30 % of the primary energy savings Area (m2) 0 60 000 Q4 2024 Of the overall objective is to renovate 66 000m2, at least 60 000 m2 of historic and listed public buildings, are renovated in line with the requirements of the open call, which shall define conditions to achieve on an average at least 30% primary energy savings, compliance with DNSH principles and incentivize implementation of other complementary measures (such as rainwater retention, removal of asbestos, accessibility of buildings).. Energy savings shall be monitored and verified for renovated buildings through energy performance certificates. 7 2- Renovation of buildings – Investment 2: Renovation of public historical and listed buildings Target Overall area (m2) of renovated public historical and listed buildings achieving at least 30 % of the primary energy savings Area (m2) 60 000 117000 Q2 2026 Of the overall objective is to renovate 130 000m2, at least 117 000 m2 of historic and listed public buildings, are renovated in line with the requirements of the open call, which shall define conditions to achieve on average at least 30% primary energy savings, compliance with DNSH principles and incentivize implementation of other complementary measures (such as rainwater retention, removal of asbestos, accessibility of buildings). Energy savings shall be monitored and verified for renovated buildings through energy performance certificates. 8 2 – Renovation of building – Reform 3: The management of construction and demolition waste Milestone The amendment to the Waste Act Entry into force of the legislative amendment to the Waste Act 0 1 Q2 2022 The revised waste legislation by the Ministry of Environment shall increase the potential of the circular economy in the construction and demolition waste and construction sector, leading to at least 70% of the non-hazardous construction and demolition waste to be recycled and reused. It shall include mandatory green public procurement for construction investments within the state administration, increase the statutory fees for the landfilling and simplify the rules for the use of construction and demolition waste. COMPONENT 3: Sustainable transport The component of the Slovak recovery and resilience plan aims at increasing the share of environmentally friendly forms of transport, through measures and smart solutions based on data analysis, to increase the number of passengers travelling by rail and public passenger transport, the volume of goods transported in environmentally friendly intermodal transport, as well as to support the development of alternative propulsion infrastructure, thereby reducing CO2 emissions in transport and improving air quality. Smart and digital investments shall support faster, more reliable and more efficient rail and clean public passenger transport, motivating passengers to switch from cars and other carbon-based means of transport. The component shall allow a wider use of alternative propulsions for sustainable, environmentally friendly, affordable and smart transport, while also promoting the use of smart grids. It shall contribute to the competitiveness of the economy by creating need market conditions for the suppliers of transport machinery. The component includes four reforms and four investments. It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01). Reforms and investment under the component address directly the Council Recommendation on the 2020 National Reform Programme of Slovakia and the Council opinion on the 2020 Stability Programme of Slovakia, according to which Slovakia "shall implement ready public investment projects as soon as possible and support private sector investment to support economic recovery. Focus investment on the green and digital transitions, in particular on clean and efficient production and use of energy and resources, sustainable public transport and waste management.” The component includes four reforms and four investments. A.1. Description of the reforms and investments for non-repayable financial support Reform 1 on the preparation of transport investment projects. The reform aims at improving the management of investments and increasing their economic benefits. This shall be achieved through the following measures:

·the establishment by 30 June 2021 of an investment plan for railway infrastructure projects prioritising projects according to their value for money; ·amendments, by 31 March 2023 to the Railways Act and related legislation simplifying and streamlining the legislative and technical requirements for transport infrastructure parameters; ·the publication by 31 December 2021 of a methodology determining how to identify projects with the highest value for money possible and contribute to the objective of passenger modal shift from individual road transport to cycling. The implementation of the reform shall be completed by 31 March 2023. Reform 2 on public passenger transport. The reform aims at improving the provision of passenger transport. A new transport service plan, followed by the optimisation of rail passenger transport, shall form a major part of the comprehensive reform of public transport. The reform shall be supported by new legislation defining rules, responsibilities and obligations in the coordination, ordering and financing of regional bus and train services. The legislation shall define a national authority to coordinate, in cooperation with regional integrators, the creation of a national integrated transport system with a unified fare, as well as to coordinate the preparation and implementation of public procurement procedures for both public passenger rail services and vehicles purchased with the support of EU funds for the operation of these routes in previous periods. The frequency of rail transport on the lines with the highest potential for transferring traffic from cars to trains shall be increased, allowing for better coordination of regional public bus and train services. The following specific measures shall underpin this reform: ·By 31 March 2023 a new law shall create public passenger transport standards and streamline the public service order, which is currently fragmented and insufficiently coordinated between the State, counties, cities and municipalities. ·By 31 December 2023 optimised rail transport graphics shall be published; ·By 31 December 2026 an integrated transport system is created, allowing multi-modal public passenger transport to travel on a single ticket. It shall be operational in at least 6 counties. The last milestone related to the implementation of the reform shall be completed by 30 June 2026. Reform 3 on intermodal freight transport. The reform shall support increased inter-modality through procurement, the coordination of logistics and promoting the launch of new intermodal routes. The objective of this reform is to shift 30 % of road transport over 300 km to rail or waterborne by 2030 and over 50 % to 2050 (compared to 2005). It shall do so notably by promoting the interest of carriers in shifting road freight to rail/intermodal transport, as well as preventing further modal shift of rail transport. The preparation and approval of a Concept of intermodal transport development, including the proposal for necessary legislative changes, shall make it possible to adopt measures for the systemic development of environmentally friendly freight transport modes. Support shall be aimed at removing technical problems in the transition to intermodal transport and making it more attractive. The implementation of the reform is expected to start by 31 December 2021 and shall be completed by 31 December 2022. Reform 4 on the introduction of new policies for the long-term promotion of alternative fuels in the transport sector. The reform shall be supported through the entry into force, by 31 December 2022 of new legislative measures shall reform distribution tariffs, simplify and accelerate the process of constructing alternative propulsion infrastructure. They shall also introduce a ‘Recharging Point Rights’ and a stable, predictable multi-annual framework to support the construction of relevant alternative propulsion infrastructure.

Investment 1 on the development of low-carbon transport infrastructure. The investment shall support decarbonisation by electrification of railway lines, upgrading railway lines, by constructing or modernising tram and trolleybus lines, and constructing cycling infrastructure. A "redesign of the European Timetabling Process – TTR" shall take place and a new security system based on digital technologies shall be introduced to enable the automation of rail traffic management. The investment shall be based on Reform 1. The implementation of the investment shall be completed by 30 June 2026. Investment 2 promoting clean passenger transport. The investment shall do so by increasing the attractiveness of rail passenger transport and downstream suburban and urban transport. In densely populated peri-urban areas and on major transport corridors between major cities and metropolitan areas, the supply of connections shall be increased. New or upgraded rolling stock shall be put into operation. Investments shall be carried out in the form of dedicated subsidies on a non-discriminatory basis using tools for analysing traffic data and data. The investment is supported by Reform 2. The implementation of the investment shall be completed by 30 June 2025. Investment 3 on the development of intermodal freight transport. The investment shall support the purchase of intermodal transport units and loading facilities involving private capital and the launch of new intermodal routes on selected routes. In order to increase the volume of transport in more environmentally friendly intermodal transport, the State shall encourage the purchase of intermodal transport units and loading facilities involving private capital. At the same time, the State shall provide support for the launch of new intermodal routes on selected routes. The envisaged State aid schemes foresee (subject to their approval by the European Commission) only partial funding from the mechanism and the selection of companies that shall receive support following public calls with clearly defined non-discriminatory rules. The implementation of the investment shall be completed by 30 June 2026. Investment 4 on the support for the construction of alternative propulsion infrastructure. The investment shall focus on recharging points for electric cars and hydrogen refuelling points. A financial mechanism of aid schemes for the construction of recharging points for electric cars and hydrogen refuelling points shall be established. The system shall ensure the construction of the skeletal infrastructure of ultra-fast-absorbing points, the available charging infrastructure at the level of all districts of the Slovak Republic, thereby encouraging the faster development of alternative-fuel passenger and freight transport, leading to the modernisation of the vehicle fleet in order to reduce overall emissions in road transport. This investment is supported by Reform 3. The implementation of the investment shall be completed by 30 June 2026. A.2. Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support Seq. Num. Related measure (Reform or Investment) Milestone / Target Name Qualitative indicators (for milestones) Quantitative indicators (for targets) Indicative timeline for completion Description and clear definition of each milestone and target unit of measure Baseline Goal Quarter Year 1 3– Sustainable Transport – Reform 1: Reform of the preparation of transport investment projects Milestone Investment plan for railway infrastructure projects Publication of the implementation plan Q2 2021 The Ministry of Transport and Construction, in cooperation with the Ministry of Finance, shall prepare and publish an investment plan for railway infrastructure projects containing the methodology, priorities and timetable for the construction of the infrastructure. A published investment plan for railway infrastructure projects prioritising projects according to their value for money shall ensure the long-term stability of their preparation and implementation of railway infrastructure projects. 2 3 – Sustainable Transport – Reform 1: Reform of the preparation of transport investment projects Milestone Methodology for selecting, preparing and implementing projects for cycling Publication of the methodology Q4 2021 The methodology shall determine how to identify projects with the highest value for money possible and contribute to the objective of passenger modal shift from individual road transport to cycling. 3 3 – Sustainable Transport – Reform 1: Reform of the preparation of transport investment projects Milestone The amendment to the Railways Act and related legislation on transport infrastructure parameters Entry into force of an amendment to the Railway Act by the National Council of the SR and adoption of an amendment to the Decree No. 350/2010 Coll.. on the construction and technical order of railway lines by the Ministry of Transport and Construction] and entry into force of the legislation Q1 2023 The legislative amendments shall simplify and streamline the legislative and technical requirements for transport infrastructure parameters, in line with good practice in other EU countries and European legislation, which shall create conditions to accelerate the pace of preparation of railway infrastructure upgrades, reduce the cost per kilometre of modernised line and enable faster and safer railways to be built earlier. 4 3 – Sustainable Transport – Reform 2: Public passenger transport reform Milestone New law on public passenger transport Entry into force of the Act on Public Passenger Transport by the National Council of the Slovak Republic and entry into force of legislation to effectively coordinate, integrate and manage public transport Q1 2023 The law shall standardise public passenger transport standards and to streamline the public service order, which is currently fragmented and insufficiently coordinated between the State, counties, cities and municipalities. 5 3 – Sustainable Transport – Reform 2: Public passenger transport reform Milestone Implementation of optimised rail transport timetable Entry into force of an optimised rail transport timetable Q4 2023 The Ministry of Transport and Construction shall implement the ordering of rail passenger transport services according to the finalised Transport Service plan by 31 December 2023. 6 3– Sustainable Transport – Reform 2: Public passenger transport reform Target Number of counties in which tariff integration is in place allowing for travelling by multiple modes of public transport or by carriers per ticket Number 1 6 Q2 2026 The qualitative indicator refers to the number of counties in which an integrated transport system is created, allowing multi-modal public passenger transport to travel on a single ticket. 7 3 – Sustainable transport – Investment 1: Development of low-carbon transport infrastructure Target Length of new cycling infrastructure (km) Number 0 200 Q2 2026 The qualitative indicator refers to the length of newly built cycling infrastructure (in km). The target includes cycling paths and bicycle parking spaces. 8 3 – Sustainable transport – Investment 1: Development of low-carbon transport infrastructure Target Length of clean passenger rail infrastructure reconstructed or upgraded (in km weighted) Number 0 69 Q2 2026 The qualitative indicator refers to the length of the reconstructed or upgraded railway infrastructure from the sources of the recovery and resilience plan, using weighting factors for the different types and ranges of projects (not containing dispatching/security installations which are counted separately under Objective 3: length of sections of lines dispatched). Of the overall objective to reconstruct or upgrade 77 km of rail infrastructure, at least 69 km is upgraded or reconstructed. Investments shall include the following elements: fully upgraded double track on the rail corridor with an increase to 160 km/h; one or two track reconstructed line (renewal of upper/bottom or traction line/equipment; single track newly electrified and partially upgraded railway line; fully upgraded double track tram line including accessories; one-stop newly built trolleybus line including the power supply. 9 3 – Sustainable transport – Investment 1: Development of low-carbon transport infrastructure Target Length of sections of railway lines dispatched (km) Number 0 100 Q2 2026 The qualitative indicator refers to the length of railway lines (in km) on which dispatching/digital safety devices have entered into operation. . Of the overall objective to dispatch 111 km of railway lines, at least 100 are dispatched. 10 3 – Sustainable transport – Investment 2: Promoting clean passenger transport Target Number of clean passenger rolling stock procured (weighted) Number 0 5 Q2 2025 The qualitative indicator reflects the number of clean public passenger rolling stock procured. The rolling stock shall include closed electric or hydrogen train units; multi-system electric locomotives; trams. 11 3- Sustainable transport - reform 3: Intermodal freight transport reform Milestone Concept and calls for new support schemes Launch of calls for new support schemes on the basis of concept of intermodal transport development Q4 2022 A Concept of intermodal transport development shall be approved by the Slovak Government by 31 December of 2021 This shall include proposals for the legislative changes necessary to adopt measures for the systemic development of environmentally friendly freight transport modes. Support shall be aimed at removing technical problems in the transition to intermodal transport and making it more attractive. On that basis by 31 December 2022 calls for new support schemes shall be launched that shall help to improve the availability of intermodal transport on a non-discriminatory basis, paving the way for its development in all regions of Slovakia. The call shall be approved by the Ministry of Transport and Construction. 12 3 – Sustainable transport – Investment 3: Development of intermodal freight transport Target Number of intermodal transport units procured in Twenty-foot Equivalent Units Number 0 1000 Q2 2026 The number of intermodal transport units of IPUs (handling semi-trailers, swap bodies, containers) procured. Intermodal transport units shall be expressed in TEU (Twenty-foot Equivalent Unit 20' (6,1 m); Basic container size ISO 1C – 20' x 8' x 8' (mach). 13 3– Sustainable Transport – Reform 4: Introduction of new policies for the long-term promotion of alternative fuels in the transport sector Milestone a new package of measures to promote alternative propulsions Entry into force of resolution to promote alternative propulsions Q4 2022 The measures shall speed up the development of alternative propulsions in transport. These shall include a reform of distribution tariffs, measures to simplify and accelerate the process of constructing alternative propulsion infrastructure, the introduction of a ‘Recharging Point Rights’ and the introduction of a stable, predictable multi-annual framework to support the construction of relevant alternative propulsion infrastructure. 14 3 – Sustainable transport – Investment 4: Supporting the development of infrastructure for alternative fuel vehicles Target Number of recharging points or hydrogen refuelling points in operation. Number 0 3029 Q2 2026 Total number of public recharging points or hydrogen refuelling points in operation. Of the overall objective to put in operation 3332 of recharging points, at least 3029 are put in operation. COMPONENT 4: Decarbonisation of industry

Reducing the greenhouse gas emissions in Slovakia and the fulfilment of national targets, as set out in the 2021-2030 Integrated National Energy and Climate Plan, require also an accelerated action by the industry. Slovakia is a heavily industrialized economy, with energy and industrial processes contribution to overall greenhouse gas emissions of just above 70%. Slovakia ranks among the Member States with the highest average air concentrations of dust particles in the EU, largely due to aging industrial technologies and burning of solid fuels in households. In this context, the component 4 of the Slovak reform and resilience plan proposes the development and operation of a decarbonisation scheme for the industrial sector. The measures shall lead to lower greenhouse gas emissions in enterprises, reduced energy losses a higher uptake of innovative environmental technologies in industrial production. The component embeds the reform commitment by the Slovak government to transit away from coal in the Upper Nitra region. It also includes commitment to end support for the production of electricity from indigenous coal and the closure of Nováky lignite power plant. The investment in the equipment of the Slovak Environmental Inspectorate shall strengthen the monitoring capacity of decarbonisation efforts by this institution. The component includes two reforms and one principal and one complementary investment. These reforms and investments shall contribute to the green transition objective and to climate target. The decarbonisation shall have lasting impact on environment and air quality in Slovakia. The investments shall strengthen competitiveness of Slovak industry and securing jobs at the local level. The transformation of the Upper Nitra region boasts a strong cohesion element, particularly in supporting the region in its transition away from coal. It is expected that no measure in this component does significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measures and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01). The measures shall contribute to addressing the Country Specific Recommendation conveyed to Slovakia in 2020, on the need to “focus investment on the green digital transitions, in particular on clean and efficient production and use of energy and resources” (Country Specific Recommendation 3/2020). A.1. Description of the reforms and investments for non-repayable financial support Reform 1: The termination of coal-based electricity production at Nováky power plant and transformation of the Upper Nitra region This reform embeds the commitment of the Slovak government to progress with transition away from coal in the Upper Nitra region. The regional Nováky power plant has the third highest CO2 emissions among the Slovak EU’s Emission Trading Scheme installations. The purpose of this measure is, for the Nováky lignite power plant, to end the support for production of electricity and to terminate the electricity generation from lignite. This shall deliver positive effects on environment and a price reduction for final electricity consumers. The implementation of the reform shall be completed by 31 December 2023.

Reform 2: Adoption of the competitive scheme for reduction of greenhouse gas emissions in industry The Slovak authorities shall launch a competitive decarbonisation scheme open to all industrial sectors. The decarbonisation scheme shall support the uptake of the best currently available technologies in industrial processes. The support shall target low carbon processes and technologies in industry and the adoption of energy efficiency measures. Slovakia shall ensure that the strict requirements on compliance with environmental legislation, both at national and EU level, shall be ensured. This shall include the compliance of supported activities and companies with the DNSH Technical Guidance (2021/C58/01). The support to installations under the EU’s Emission Trading Scheme shall reduce their emissions substantially below the benchmark relevant to the project bid. The ‘substantially below benchmark’ condition shall be part of selection criteria for the procurement. The quantity of greenhouse gases emitted (in CO2 equivalent units, weighted average) of the enterprises supported by the scheme shall decrease by at least 30% as compared to the counterfactual scenario. The Slovak authorities shall provide either data on decarbonisation for projects under the scheme (to be made available by 30 June 2026 at the latest) or demonstrate that the greenhouse gas emission savings will be delivered based on assumed parameters of supported technologies under the measure (based on certificates by producers) or the combination of both approaches. The implementation of the reform shall be completed by 31 December 2022. Investment 1: The operation of the industry decarbonisation scheme

The purpose of the measure is to reduce the greenhouse gas emissions through project support to industrial enterprises. The auction scheme shall respect the conditions on investment policies as specified in the Reform 2 (‘Adoption of the competitive scheme for reduction of greenhouse gas emissions in industry’). Of the overall objective to reduce the greenhouse gas emissions by 1 369 917 tonnes of CO2 equivalent, the decarbonisation scheme shall deliver the reduction of at least 1 232 926 tonnes of CO2 equivalent, additional to the counterfactual scenario presented to the Commission. The emission reduction shall be observed either on the basis of data collection for projects under the decarbonisation scheme or demonstrated on the basis of parameters of supported technologies based on certificates by producers or the combination of both approaches. The Slovak authorities shall provide the data and the necessary technical documentation to the Commission on fulfilment of the decarbonisation target by 30 June 2026 at the latest. The implementation of the investment shall be completed by 30 June 2026. Investment 2: Su