This Decision is addressed to the Republic of Slovenia.

3.The release of instalments in accordance with the Loan 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 Slovenia has satisfactorily fulfilled the additional milestones and targets covered by the loan and identified in relation to the implementation of the recovery and resilience plan. To be eligible for payment, the additional milestones and targets covered by the loan shall be completed no later than 31 August 2026.

2.The loan support shall be made available by the Commission to Slovenia in instalments in accordance with the Annex to this Decision. The 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 Slovenia a loan amounting to a maximum of EUR 705 370 000.

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 Slovenia 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 Slovenia in instalments in accordance with the Annex to this Decision. An amount of EUR 231 000 547 shall be made available as a pre-financing payment, equal to 13 per cent 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 Slovenia a financial contribution in the form of non-repayable support amounting to EUR 1 776 927 281. An amount of EUR 1 280 114 102 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 Slovenia equal to or more than this amount, a further amount of EUR 496 813 179 shall be available to be legally committed from 1 January 2023 until 31 December 2023.

The assessment of the recovery and resilience plan of Slovenia 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 and the additional milestones and targets related to the payment of the loan, 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

(56)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,

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

(54)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 Slovenia has satisfactorily fulfilled the relevant milestones and targets identified in relation to the implementation of the recovery and resilience plan.

(53)Furthermore, in order to support additional reforms and investments, Slovenia has requested loan support. The maximum volume of the loan requested by Slovenia is less than 6,8 % of its 2019 Gross National Income in current prices. The amount of the estimated total costs of the recovery and resilience plan is higher than the combined financial contribution available for Slovenia and requested loan support.

(52)In accordance with Article 11(2) of Regulation (EU) 2021/241, the calculation of the maximum financial contribution for Slovenia is to be updated by 30 June 2022. As such, in accordance with Article 23(1) of that Regulation, an amount for Slovenia 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.

(51)The estimated total cost of the recovery and resilience plan of Slovenia is EUR 2 482 687 549. 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 Slovenia, the financial contribution allocated for Slovenia’s recovery and resilience plan should be equal to the total amount of the financial contribution available for Slovenia.

(50)Following the positive assessment of the Commission concerning the Slovenian 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 and loan support.

(49)For the implementation of the plan, further consultations with social partners or relevant stakeholders are envisaged on reforms related to the pension system, health system, flexible forms of work, public sector pay system, and renewable energy sources before the adoption of the relevant legislation. 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.

(48)For the preparation of the recovery and resilience plan, Slovenia carried out a consultation with local and regional authorities, social partners, civil society organisations and other relevant stakeholders.

(47)The recovery and resilience plan of Slovenia includes four multi-country projects. The European common data infrastructure and services and Low-Power Processors and Semiconductor Chips may take the form of planned Important Projects of Common European Interest (IPCEI). The objectives of the former project (Next Generation Cloud Infrastructure and Services) include the development of a new generation of energy-saving infrastructure and services from edge to cloud to ultimately equipping the Union with global, forward-looking, ultra-secure, green industrial data processing capabilities, while the latter project aims to strengthen planning capabilities and increase the innovativeness and resilience of semiconductor value chains in the Union. In addition, multi-country projects related to the European Blockchain Services Infrastructure and the European quantum communication infrastructure aim to integrate with a series of national infrastructures and to establish a national quantum communication infrastructure network connected to the national networks of neighbouring countries.

(46)In accordance with Article 18(4), point (g) to Regulation (EU) 2021/241, the plan includes a security-self assessment. As regards connectivity investments, where digital solutions are based on the use of new generation 5G networks, the 5G investments will be subject to the legislation implementing the European Commission Communication of 29 January 2020 Secure 5G deployment in the EU — Implementing the EU toolbox. Throughout the plan, several components include a section that explains the contribution of the measures to the Union’s open strategic autonomy and security issues.

(45)The plan contains measures that aim to ensure or promote gender equality and equal opportunities for all, such as investments in affordable housing and labour market measures for inclusion of disabled persons. Equality considerations are mainstreamed across the various components, such as in ensuring accessibility in renovated public buildings. In the plan, Slovenia commits to ensure that respect for gender equality and equality for all is safeguarded at all stages of preparation and implementation of the envisaged reforms and investments.

(44)The plan is structured around four coherent clusters, which are expected to contribute to the objectives of Regulation (EU) 2021/241. The wide range of measures ensures an appropriate balance between mutually reinforcing reforms and investments. In particular, the entry into force of reforms early in the timeline of the plan ensures a supportive environment for the realisation of investments, which in turn contribute to the objectives of the reform. The plan includes important reform elements to close the generational gap, ensure the accessibility, quality, and sustainability of healthcare, and further the green and digital transition, which are complemented by targeted investments that contribute towards achieving the reform objectives. Each cluster is built around components including consistent packages of both reforms and investments, pursuing complementary aims and mutually reinforcing measures. At the overall level of the plan, all clusters pursue complementary objectives and represent coherent actions.

(43)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.

(42)The establishment of the Coordinating Body, adoption of a National Decree and Guidelines of the Coordination Body laying out the procedures for carrying out audits and controls in compliance with applicable Union and national legislation and upgrade of the national IT system are included as a milestone that needs to be completed prior to the first disbursement of funding.

(41)The plan clearly identifies the responsible entities for its implementation and sets out their respective roles and responsibilities for the performance of the internal control tasks. The relevant functions are appropriately segregated. The control system and other relevant arrangements, including the collection and dissemination of data to the final recipients, are adequate in dealing with prevention, detection and dealing with corruption, fraud, conflict of interest and preventing double funding from the Facility and other Union programmes. The actors responsible for controls should have the necessary legal empowerment and administrative capacity to exercise their planned roles and tasks. Such commitments are part of a specific milestone on control and audit systems.

(40)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.

(39)Slovenia has provided individual cost estimates for all investments and reforms with an associated cost included in the recovery and resilience plan. The plan includes adequate descriptions of the methods used in calculating the costs and the relevant justifications. The calculations rely on generally reasonable unit costs or on the experience gathered in recent projects, although in some cases underlying assumptions could be better justified. They are usually supported by evidence of comparable costs, with the necessary adjustments, that allows plausibility assessment for the vast majority of measures. In some cases, while cost estimates remain plausible, they are in the higher range of other comparable costs. For a very limited number of measures, the link between provided documents and cost estimates is not sufficiently clear. A solid control and audit system to be put in place and the public procurement framework shall further ensure cost efficiency at the plan level. 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.

(38)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.

(37)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.

(36)Milestones, targets, and indicators for the implementation are of sufficient quality to ensure the effective monitoring of the recovery and resilience plan. The request for loans is accompanied by further milestones and targets to measure progress in the additional reforms and investments supported. Milestones and targets are sufficiently detailed and clear, focusing on output indicators and key steps in the reform or investment process. They strike an appropriate balance between realism and ambition within the timeline of the Recovery and Resilience Facility. The sequencing of milestones and targets is sufficiently regular to allow progress to be monitored and is commensurate with the importance of the given reform or investment. Arrangements and mechanisms to collect, store and report data on the milestones and targets are described and appear adequate. The Coordinating Authority should have the overall responsibility for monitoring and implementing the plan as a whole and should be responsible for drawing up and signing the management declaration.

(35)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.

(34)Lasting impact of the plan can also be enhanced through synergies between the plan and other programmes financed by the cohesion policy funds, notably by addressing in a substantive manner the deeply rooted territorial challenges and promoting a balanced development.

(33)In the area of investment, a lasting structural change is expected from the measures to boost productivity and investments of companies, including those in the tourism sector. Further investments should accelerate the digital transformation of the public sector and companies. The largest investment in the plan should contribute to climate change adaptation with a focus on civil protection and flood prevention, while many others should directly contribute to climate change mitigation. Investments in sustainable transport are expected to contribute to significant reductions in greenhouse gas emissions and air pollution from transport, thus ensuring a better living environment for the population and better operating conditions for economic operators. Further measures should support the energy efficiency of the economy. Measures increasing the conservation of forests should support a more resilient economy in rural areas. Key investments in healthcare should boost e-health and improve the infrastructure and treatment of infectious and communicable diseases, thus contributing to the health’s system preparedness and resilience.

(32)The implementation of the reforms envisaged in the recovery and resilience plan is expected to bring about significant structural changes to public administration, improving its effectiveness and efficiency. The adoption of a civil service management strategy, the establishment of a competence centre, and the reform of the civil service legislation are foreseen to modernise the human resources management system in the Slovenian public administration. Furthermore, the plan aims at upgrading skills, including digital, of civil servants while the introduction of a new public sector wage system is expected to improve incentives and performance. Further measures aimed at simplifying existing laws and regulations are set to be adopted as part of the legislative packages on aimed at reducing bureaucracy. Reform efforts should also focus on establishing a more efficient management of national and municipal spatial planning and on modernising the public procurement system in Slovenia in compliance with respective EU requirements. Moreover, the provision of public e-services for citizens and businesses should be upgraded and its governance strengthened with the establishment of the Informatics Development Council, which should ensure the coherence and cost-efficiency of IT development activities in the public administration. Importantly, the plan also aims to increase the level of cybersecurity, making the country’s digital infrastructure more resilient.

(31)The envisaged reforms of the healthcare, long-term care and pension systems are expected to lastingly improve the social security system in Slovenia, in terms of service provision to all citizens, efficiency, adequacy, and financial sustainability. Those reforms are expected to make a lasting contribution in addressing the key socio-economic challenges of a rapidly aging society. The long-term care reform is expected to establish a new comprehensive regime integrating both healthcare and social care services. The healthcare reform should contribute to the accessibility, quality, and financial sustainability of the system. Related investments should improve the capacity and quality of long-term care and healthcare services in Slovenia, including the accessibility and responsiveness of the health system. Reforms to the pension system and labour market regulations, together with more effective active labour market policy and targeted investments in trainings, should promote longer working lives and ensure the medium and long term sustainability and adequacy of the pension system, thus raising long-term growth.

(30)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 Slovenia to a large extent (Rating A).

(29)The plan adopts a holistic approach as the reforms and investments proposed for the digitalisation are supported by two key structural elements: providing better connectivity for households and schools and increasing the digital skills of workers, civil servants, teachers and students. Large-scale trainings and a competence centre should support improvement of digital skills in the public sector. Basic computing and digital competences should be integrated in the schools’ curricula and investments in educational institutions should adapt the learning process in view of the digital transition. The effects of those measures are expected to increase Slovenia’s competitiveness, lower the administrative burdens and facilitate market access, simplify the procedures and interaction with public services, provide access to connectivity for more households and education establishments, and contribute to maximising for Slovenia the potential of the digital sector.

(28)The plan has a strong focus on the digitalisation of the public administration, proposing a comprehensive package of reforms and investments to accelerate the country’s digital transformation and to provide user-centric, interoperable and secure services. The plan includes the adoption of a Broadband Plan with the objective to ensure coverage across Slovenia by 2025, improvements in the capacity to respond to cybersecurity incidents, the introduction of a national e-identity and the simplification of user registration for the use of public e-services. The plan supports the development of digital infrastructure and advanced and user-friendly digital solutions and services in various areas of the public administration, such as internal security, education, science and sport, spatial planning and environment, agriculture, food and forestry, culture, justice, and e-health. As regards the private sector, the plan includes a strategy for the digital transformation of companies, the introduction of a single digital identity card for companies, and the adoption of guidelines for innovative procurement to enhance high-tech innovation potential of small and medium enterprises. Such measures are underpinned by investments aimed at transforming business processes and closing the digital gap for more traditional companies.

(27)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 21,4 % of the plan’s total allocation calculated in accordance with the methodology of Annex VI to Regulation (EU) 2021/241.

(26)The plan also contributes to the Union’s further environmental policy objectives. The plan is expected to increase the efficiency of the water management system and accelerate the transition to a circular economy, in particular by integrating circular public procurement principles and introducing green budgetary planning. The plan contains no measures having biodiversity as their objective. However, some of the measures for climate mitigation and adaptation may also be beneficial to the preservation of biodiversity, as climate change is one of the main threats to biodiversity. The plan is expected to support indirectly biodiversity with a key reform on forest conservation and development, by promoting nature-based solutions for climate change adaptation measures, and by prioritising wastewater systems upgrades with positive impacts on Natura 2000 areas. Slovenia has carried out a systematic do-no-significant-harm assessment indicating that none of the proposed measures generates harm to biodiversity.

(25)In terms of contribution to the Union 2030-2050 climate and energy-related targets and the objective of EU Union climate neutrality by 2050, the plan addresses some of the key policy challenges identified in the Commission’s recommendations to the Slovenian National Climate and Energy Plan. The plan includes key reforms and investments to promote renewable energy by removing regulatory obstacles and developing new renewable capacity and upgrading the electricity distribution grid, while taking into account nature protection needs. The plan also foresees energy efficiency investments with a focus on public buildings and promotes energy efficiency investments in the industry. The plan further promotes the use of public transport, rail passenger and freight transport, the use of alternative fuels in transport, and the digital transformation of rail and road transport. The plan aims to increase resilience towards climate change, with a specific focus on flood risks. The combined effect of those measures is expected to contribute to significant reductions in greenhouse gas emissions, to stimulate new green jobs, and to reduce energy bills, thus ensuring a better living environment for the population and better operating conditions for economic actors.

(24)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 42,4 % 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 of Regulation (EU) 2021/241, the recovery and resilience plan is consistent with the information included in the National Energy and Climate Plan 2030.

(23)Slovenia has provided a detailed assessment for each measure included in its recovery and resilience plan in accordance with the “do no significant harm” technical guidance of the European Commission (2021/C 58/01). The recovery and resilience plan of Slovenia is expected to ensure that no significant harm is done to environmental objectives by selecting measures that either contribute substantially to an environmental objective, or have no or an insignificant foreseeable impact on environmental objectives. Other measures, including broad support schemes, are designed to ensure compliance with the principle across all stages of implementation, including during the tendering process where applicable, and in all cases in the final outputs. For measures requiring a substantive assessment in accordance with Commission guidance, such as renewables power production and district heating, water management, sustainable mobility, digitalisation, investments in tourism, and new building constructions, Slovenia has committed through its plan and specific milestones and targets to not do significant harm to any of the six environmental objectives. As such, ‘do no significant harm’ criteria are integrated in the milestones related to the selection process for relevant projects and, where applicable, references to an exclusion list in the relevant milestones.

(22)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) No 2020/852 of the European Parliament and of the Council (the principle of ‘do no significant harm’).

(21)The recovery and resilience plan of Slovenia addresses employment and social challenges relevant for the implementation of the European Pillar of Social Rights. A scheme supporting young people in their transition to the labour market should foster equal opportunities and labour market access. Adapting working environments to the needs of persons with disabilities should promote inclusion. Several elements of the long-term care and the healthcare reform should improve accessibility and resilience. Investments and reforms in affordable housing should also contribute to social inclusion and poverty reduction. The plan provides for investments in skills and human capital, in promoting life-long training, and in equipping students with the skills for the future, for example those required for the green and digital transitions.

(20)The recovery and resilience plan of Slovenia is expected to improve the country’s macroeconomic performance, in particular through increasing the productivity of the economy and long-term growth, and the creation of innovative ecosystems of economic and business infrastructure. It further includes measures to improve access to capital for new and innovative companies, to support investment in research and innovation and to improve coordination between research institutes and companies and among researchers. With the creation of a market for alternative investment funds, Slovenia aims to channel more resources into research and innovation by start-ups and small and mid-sized companies. Further measures are expected to raise productivity across the economy through the provision of a more efficient digital and physical infrastructure and investing in human capital, including in specific sectors such as the circular economy, sustainable food systems, tourism, and culture.

(19)Simulations by the Commission services show that the plan has the potential to increase the GDP of Slovenia by between 1,1 % and 1,7 % by 2026. After 20 years, GDP could be 0,5 % higher. The economic boost provided by the plan is also expected to support the public finances.

(18)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 the Member State, 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.

(17)The recommendations related to the immediate fiscal policy response to the pandemic can be considered as falling outside the scope of Slovenia’s the recovery and resilience plan notwithstanding the fact that Slovenia 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.

(16)The plan is expected to contribute to front-loading mature public investment projects and promoting private investment to support the economic recovery. It focuses investment on the green and digital transition, in particular renewables, energy efficiency in public buildings, flood protection, rail transport, broadband and digital skills and on research, development and innovation. The plan also contributes to promoting digital capacities of businesses, e-commerce and e-health.

(15)The plan also includes structural reforms aimed at strengthening the national institutional framework. It features reforms to improve competition and professionalisation in public procurement. It further contains reforms that improve access to finance and business environment, notably by strengthening capital markets, reducing the administrative burden, and improving digital public services.

(14)The plan is expected to contribute to mitigating the social and employment impact of the crisis, including through a reform of short-time work schemes, promotion of more flexible working arrangements, and measures on expanding affordable housing. Moreover, labour market and education measures included in the plan should increase the employability of low-skilled and older workers, improve the labour market relevance of education and training, and promote lifelong learning and activation measures, including through better digital literacy.

(13)The plan includes key structural reforms of the long-term care, healthcare, and pension systems in line with longstanding recommendations. Once implemented, such reforms are expected to (i) significantly enhance the resilience of Slovenia’s social security system; (ii) improve quality and access of long-term care and healthcare and adequacy of pensions; and (iii) contribute to long-term fiscal sustainability in the face of important demographic challenges. The envisaged long-term care act, the first comprehensive legislation in this area in Slovenia, has been under discussion for more than a decade. The reform will establish a new social security pillar focused on the specific needs of those requiring long-term care, ensuring equal access regardless of socio-economic status. A special law is expected to ensure more diversified financing sources, notably with the introduction of compulsory long-term care insurance. For healthcare, the reform is expected to ensure a broad basket of rights under the compulsory health insurance scheme, ensure the financial sustainability of the healthcare system, and improve its management and performance, including through the establishment of an independent body monitoring quality and safety aspects. As regards the labour market, the reforms will increase labour participation and facilitate labour reallocation – especially through training and active labour market policies – which is key in periods of economic transformation. The pension reform will address the fiscal sustainability of the system while ensuring intergenerational fairness and pension adequacy.

(12)The plan includes an extensive set of mutually reinforcing reforms and investments that contributes to effectively addressing all or a significant subset of the economic and social challenges outlined in the country-specific recommendations addressed to Slovenia by the Council in the European Semester in 2019 and in 2020, notably in the areas of long-term care, healthcare, pensions and labour market, education and skills, research and development, and innovation, green and digital transition, business environment, and public procurement.

(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 measures that contribute primarily to the pillar of health, and economic, social and institutional resilience include reforms and investments that aim to strengthen the accessibility, effectiveness and financial sustainability of the health and long-term care systems. They are expected to provide the definition of statutory health insurance rights, restructure the complementary health insurance system, reform the remuneration system for health professions, and ensure its financial sustainability. Investments in the skills of primary care staff, upgrading infrastructure for emergency care and for treatment of infectious diseases are expected to increase the accessibility, resilience and preparedness of the health system. The adoption of a comprehensive legislation regulating long-term care system should integrate both healthcare and social care services, while investments in care homes are expected to improve access and quality of care. The plan also includes important measures to improve the efficiency and effectiveness of public administration, including through its digital transformation. The recovery and resilience plan of Slovenia also includes policies for the next generation such as reforms and investments to improve the quality of education, to equip schools with key infrastructure and competences for the digital and green transition, and to support youth employment.

(9)The measures that primarily address the pillar of smart, sustainable and inclusive growth include labour market and pension reforms should contribute to raising the employment rate for older workers and potential GDP growth, and address the long-term fiscal sustainability and adequacy of the pension system. Legislation introducing a short-time work scheme is expected to increase the resilience of the labour market to shocks. Dedicated reforms and investments should jointly boost productivity and environmental sustainability in companies, including in the tourism and culture sectors, while reforms of public institutions are expected to contribute to lowering administrative burdens. Smart, sustainable and inclusive growth is supported by further measures, in particular in the field of research,development, and innovation, education, and investments in support of green and digital transitions. To support social and territorial cohesion in Slovenia the plan includes measures to offer affordable housing to mitigate the impact of the crisis on young families and marginalised people, measures to bridge the digital divide between rural and urban areas, reforms of the labour market, reforms of the healthcare and long-term care systems and investments in lifelong learning.

(8)The plan contributes to tackling key structural challenges and paves the way for the twin transition to a green and digital economy. It is structured around four clusters on “green transition”, “digital transformation”, “smart, sustainable, and inclusive growth”, and “health and welfare”. Comprehensive reforms in the areas of long-term care, healthcare, labour market and pensions are envisaged and expected to have a long lasting impact, making the country’s social security system more resilient and sustainable. Green and digital measures are also at the core of the recovery and resilience plan of Slovenia. Concerning the green transition, the plan includes measures that aim to unlock the potential of renewable energy sources while ensuring nature protection, to support the energy renovation of buildings, to mitigate climate change risks, to improve water management, to promote sustainable mobility, and to adopt green budgetary planning and foster circular economy. Significant investments to promote the green transition are also planned throughout the entire plan, including on sustainable tourism accommodations, the promotion of green public procurement and green skills. Concerning the digital transformation, targeted measures are expected to contribute to the digitalisation of both the public and the private sector. Those include the further digitalisation of the public sector, in particular justice and e-health, and measures fostering digital literacy in the education system, the introduction of electronic identification documents for citizens and companies, and some investments in connectivity and digital skills, which aim to reduce the digital divide.

(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 should 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 should 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 should come from spillovers from other 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. They should 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 30 April 2021, Slovenia 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, please remove the recital]

(2)On 9 July 2019 and on 20 July 2020, the Council addressed recommendations to Slovenia in the context of the European Semester. In particular, the Council recommended to take all necessary measures to effectively address the pandemic, sustain the economy and support the ensuing recovery, and to mitigate the social and employment impact of the COVID-19 crisis. It further recommended to improve the resilience of the healthcare and long-term care systems and implement reforms that ensure their quality, accessibility and long-term fiscal sustainability. It recommended to ensure the long-term sustainability and adequacy of the pension system and increase employability of low-skilled and older workers and to improve labour market relevance of education and training. Lastly, it recommended to provide liquidity and financing to businesses and households, to improve the business environment, as well as to invest in research and development, the green transition and the digital transition. 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 the recommendation regarding necessary measures to effectively address the COVID-19 pandemic, sustain the economy and support the ensuing recovery has been addressed.

(1)The COVID-19 outbreak has had a disruptive impact on the economy of Slovenia. In 2019, the gross domestic product per capita (GDP per capita) of Slovenia was 74 % of the EU average. According to the Commission’s Spring 2021 forecast, real GDP of Slovenia declined by 5,5 % in 2020 and is expected to decline by 0,9 % cumulatively in 2020 and 2021. Longer-standing aspects with an impact on medium-term economic performance include in particular low investment-to-GDP ratio and relatively low level of productivity, as well as challenges linked to a fast ageing society and long-term sustainability of the pension and health systems.

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 Slovenia

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

EUROPEAN COMMISSION Brussels, 1.7.2021 COM(2021) 384 final ANNEX

to the Proposal for a Council Implementing Decision on the approval of the assessment of the recovery and resilience plan for Slovenia {SWD(2021) 184 final}



ANNEX SECTION 1: REFORMS AND INVESTMENTS UNDER THE RECOVERY AND RESILIENCE PLAN 1.Description of Reforms and Investments A. COMPONENT 1: RENEWABLE ENERGY AND ENERGY EFFICIENCY This component of the Slovenian recovery and resilience plan addresses several challenges faced by the producers and the consumers of renewable energy in Slovenia, as well as old and inefficient district heating systems, losses in the electricity distribution system, and the limited use of energy management systems. The objectives of the component are to increase the use of renewable energy sources, improve energy efficiency, and reduce greenhouse gas emissions. The reforms supporting the investments include regulatory changes to unlock the production potential of renewable energy, strengthen the electricity grid, and improve energy efficiency in the economy. The investments supported by these reforms relate to increasing the share of electricity from renewable energy sources, reducing losses on the electricity grid, and promoting energy efficiency measures in industry. These investments and reforms shall contribute to the Country Specific Recommendations addressed to Slovenia in the past two years to “focus investment-related economic policy on […] low carbon and energy transition (Country Specific Recommendation 3, 2019) and to “focus on investments for the green […] transition, in particular on clean and efficient energy production and use, environmental infrastructure” (Country Specific Recommendation 3, 2020). 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). A.1. Description of the reforms and investments for non-repayable financial support Reform A: Reform of the promotion of renewable energy sources in Slovenia The objective of the reform is accelerating the roll-out of renewable technologies in the electricity sector. The reform shall also support the national contribution to the Union renewables target. The reform shall be implemented through the entry into force of the Law on the Promotion of the Use of Energy from Renewable Energy Sources. The Law shall support the acceleration and emergence of additional renewables projects by lifting certain legal and administrative barriers, in the area of spatial planning, and by establishing a single point of contact to assist customers in all procedures for the installation and operation of renewable energy sources. The reform shall also take into account the results of a biodiversity mapping of the potential of renewable energy sources across the entire territory of the Republic of Slovenia. The milestones and targets related to the implementation of the reform shall be completed by 31 December 2024. Reform C: Energy efficiency in the economy The objective of the reform is to increase the energy efficiency potential of industry in Slovenia. The reform shall promote industrial energy efficiency investments through the adoption of Rules of Procedure establishing the conditions for large undertakings to obtain exemptions from charges levied to finance renewables and combined heat and power charges. Such conditions shall include, inter alia, the implementation of energy management systems or of certain recommendations of energy efficiency audits. An Action Plan setting out a new governance model for renewable energy producers shall be adopted, with the objective to facilitate market access and exchanges with industrial consumers through a digital platform. At least 20 companies shall obtain an e-card for the tracking of energy or resource efficiency. The reform shall also pay particular attention to the energy efficiency potential of the construction sector with the adoption of a Building Information Modelling Strategy to promote the use of building information models both in the building construction and in the management phase.

The milestones and targets related to the implementation of the reform shall be completed by 31 December 2024. Investment D: Energy efficient restructuring of district heating systems with the use of renewable sources The objective of this investment is to increase the energy efficiency of district heating and cooling systems. An assessment made in 2017 concluded that only around two-thirds of the district heating and cooling systems qualified as energy efficient systems. This investment shall increase the energy efficiency of three district heating and cooling systems. The investment shall be implemented through a competitive tender procedures launched in 2022 and shall exclude the use of biomass in breach of the requirements of Directive (EU) 2018/2001. It is expected that this measure does not do significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measure and the mitigating steps set out in the recovery and resilience plan in accordance with the DNSH Technical Guidance (2021/C58/01). In particular, the upgrading of the efficient district heating system shall not use fossil fuels as a heat source but rely solely on renewable sources The milestones and targets related to the implementation of the investment shall be completed by 31 December 2025. Investment F: Strengthening the electricity distribution network (transformer stations) The objective of the investment is to modernise the electricity distribution network in line with the increasing amount of renewables electricity consumption and to enable the connection of renewables generating installations, heat pumps and recharging points for electric vehicles. The investment consists in the construction and entry into operation of 980 new transformer stations. The milestones and targets related to the implementation of the investment shall be completed by 30 June 2026. Investment G: Investments to increase energy efficiency in the economy The objective of the investment is to facilitate exchanges between renewable producers and industrial consumers and support the development of innovative energy efficiency solutions. The investment consists in the set-up and operationalisation of a digital platform for the renewable electricity market. The platform is expected to increase the level of demand-response services and other possible green solutions. The investment shall also improve the functioning of the national emissions trading system registry through the implementation of advanced technologies, with the aim of increasing transparency and reducing fraud risks. In addition, a regulatory sandbox for the promotion of demand-response technologies shall be established and made operational. The regulatory sandbox aims to support three pilot projects for innovative technology services that shall contribute to the upgrade of the regulatory framework. The milestones and targets related to the implementation of the investment shall be completed by 31 December 2022. A.2. Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support Sequential Number Related Measure (Reform or Investment) Milestone / Target Name Qualitative indicators (for milestones) Quantitative indicators (for targets) Indicative timeline for completion Description of each milestone and target Unit of measure Baseline Goal Quarter Year 1 A: Reform of the promotion of renewable energy sources in Slovenia Milestone Entry into force of the Act on the Promotion of the Use of Energy from Renewable Energy Sources Provision in the law indicating the entry into force of the Act on the Promotion of the Use of Energy from Renewable Energy Sources Q2 2022 The Act shall regulate the use of renewable energy sources by the state and municipalities and set a binding target for the share of energy from renewable sources in gross final consumption in the Republic of Slovenia. It shall specify measures to achieve this target and the methods of financing them, including the shortening of permit and authorisation procedures for the installation, connection and operation of renewables generating installations (solar and wind) of all sizes. In particular, it shall implement the recommendations resulting from ongoing technical assistance on the revision of legislation for spatial planning of wind power plants, financed under the Technical Support Instrument. It shall further include guarantees of origin for energy from renewable sources in the heating and cooling and transport sector, administrative procedures and the information and training of installers. It shall establish a single point of contact for investors in generating installations. 2 A: Reform of the promotion of renewable energy sources in Slovenia Milestone A single point to support investors in obtaining approvals for the installation and connection of generating installations to renewable energy sources is operational Single point of contact is operational Q4 2022 The contact point guides investors through licence applications and other acts and assists the entire administrative process. At the request of the applicant, the contact point shall direct applications for authorisations and other acts and assist the applicant throughout the administrative procedure. 3 A: Reform of the promotion of renewable energy sources in Slovenia Target Shortening and simplifying connection of self-supply facilities up to 20 kW Number (days) 60 30 Q4 2024 The Act on the Promotion of the Use of Energy from Renewable Energy Sources shall provide for a maximum time for connection of installations of up to 20kW of 30 days. The authorities shall comply with the principles of proportionality, transparency, energy efficiency, and non-discrimination. 4 D: Energy efficient restructuring of district heating systems with the use of renewable sources Milestone Opening of a call for tender for renewable energy sources in district heating systems Publication of the tender specifications Q4 2022 Call for tender opened for investments increasing the share of renewable energy sources in district heating systems. The call shall be open until the budgetary envelope is exhausted. The selection/ eligibility criteria shall ensure compliance with the ‘do no significant harm’ Technical Guidance (2021/C58/01) and in particular that the restructured district heating and cooling systems shall comply with Directive 2012/27/EU; and that, in the case of biomass utilisation, the biomass shall be in line with Directive (EU) 2018/2001. 5 D: Energy efficient restructuring of district heating systems with the use of renewable sources Target Additional capacity of renewable energy sources in district heating systems Number (MW) 0 26 Q4 2025 Completed projects for additional capacity of renewable energy sources in district heating systems in accordance with the selection criteria in milestone 4. 6 F: Strengthening the electricity distribution network (transformer stations) Milestone Opening of a call for tender for electricity transformer stations Publication of the tender specifications Q4 2022 Call for tender opened for the construction of transformer stations. The call shall be open until the budgetary envelope is exhausted. Tender conditions shall ensure in particular criteria for the effective integration of renewable energy production and storage facilities, including recharging points for electric vehicles. In addition to all mandatory national and European rules laying down requirements for construction and environmental interventions, selection/eligibility criteria shall ensure compliance with the ‘do no significant harm’ Technical Guidance (2021/C58/01). 7 F: Strengthening the electricity distribution network (transformer stations) Target Number of new electricity transformer stations in operation Number 0 980 Q2 2026 980 new electricity transformer stations shall be operational, in compliance with requirements under milestone 6. 8 C: Energy efficiency in the economy Milestone Governance model to support renewable energy sources producers in market access and exchange of energy with industrial consumers Adoption of an action plan for establishing a governance model for renewable energy sources electricity producers Q2 2022 The governance model for energy efficiency in enterprises shall be adopted by the Government of the Republic of Slovenia as part of an Action Plan. It shall enable producers of electricity from renewable energy sources to be integrated into the digital platform (stock exchange/market), with the aim of improving the efficiency of the supply of renewable energy srouces and improving market access for these producers. 9 C: Energy efficiency in the economy Target Number of enterprises with acquired e-cards on energy and material efficiency Number 0 20 Q2 2022 At least 20 companies shall have obtained an e-card for support the tracking of energy or resource efficiency. 10 C: Energy efficiency in the economy Target Increased implementation of recommendations from energy audits % (Percen tage) 0 10 Q4 2024 An average increase of at least 10% of the recommendations made to companies implemented as compared to the latest audit. On the basis of e-cards, companies are expected to monitor and record compliance with the recommendations of energy audits in companies on the basis of pre-defined categories, such as establishment of energy management, appointment of a person to monitor the implementation of the recommendations, and electricity savings due to improvements introduced. 11 G: Investments to increase energy efficiency in the economy Milestone Award of contract for the participation of business consortia in pilot projects in the regulatory sandbox Communication of awards Q2 2022 Award of contract for pilot projects to develop technological solutions to increase energy efficiency in companies supported by the regulatory sandbox. Selection/eligibility criteria shall ensure compliance with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), including for any projects that are covered by the EU Emissions Trading System, to ensure that the supported installations achieve greenhouse gas emissions significantly below the benchmark established for free allocation as set out in the Commission Implementing Regulation (EU) 2021/447 . 12 G: Investments to increase energy efficiency in the economy Target Successfully completed pilot projects Number 0 3 Q4 2022 Pilot projects completed in the regulatory sandbox (for regulatory areas or for a technological transition). The pilot projects financed in connection to the regulatory sandbox shall develop technological solutions to increase energy efficiency in companies. A.3. Description of the reforms and investments for the loan Reform B: Reform of electricity supply to promote renewable energy sources

The objectives of the reform are to improve the network integration of renewable energy installations and demand response. The reform consists in the entry into force of the Electricity Supply Act, which shall provide for measures to ensure a secure operation of the grids, including the deployment of smart network services, as well as measures to connect new capacity, including demand response and energy storage facilities. The milestones and targets related to the implementation of the reform shall be completed by 31 December 2025. Investment E: Production of electricity from renewable energy sources The objective of the investment is the installation of new renewable power production capacity through a technologically neutral competitive public tender between different technologies (geothermal and hydropower), and solar technology for public buildings. The projects shall comply with the relevant annexes of the Commission Delegated Regulation (EU) (C(2021) 2800 final) supplementing the Taxonomy Regulation (EU) 2020/852. The investment shall consist in grants for the construction of the selected installations, with the objective of installing 35 MW of renewables power production capacity, or the maximum volume compatible with the tender being held in competitive conditions. It is expected that this measure does not do significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measure and the milestones and targets to be fulfilled by Slovenia. In particular, full and substantive compliance shall be demonstrated with the legal provisions that apply. The milestones and targets related to the implementation of the investment shall be completed by 30 June 2026. Investment F: Strengthening the electricity distribution network (low-voltage network) The objective of the investment is to modernise the electricity distribution network in line with the increasing amount of renewables electricity consumption, and to enable the connection of renewables generating installations, heat pumps and recharging points for electric vehicles. The investment consists in the construction and entry into operation of a new low-voltage network of at least 1520 kilometres long. The milestones and targets related to the implementation of the investment shall be completed by 30 June 2026. A.4. Milestones, targets, indicators, and timetable for monitoring and implementation for the loan Sequential Number Related Measure (Reform or Investment) Milestone / Target Name Qualitative indicators (for milestones) Quantitative indicators (for targets) Indicative timeline for completion Description of each milestone and target Unit of measure Baseline Goal Quarter Year 13 B: Reform of electricity supply to promote renewable energy sources Milestone Entry into force of the Electricity Supply Act Provision in the law indicating the entry into force of the Act on the Supply of Electricity Q2 2022 The new Electricity Supply Act shall lay down the rules for the functioning of the electricity market, production, transmission, distribution, storage and supply of electricity, together with provisions for the protection of final customers, the modalities and forms of provision of utilities in electricity transmission and distribution and the electricity market, principles and measures to achieve security of electricity supply, measures to prevent energy poverty and other issues of electricity supply. 14 B: Reform of electricity supply to promote renewable energy sources Target Additional power of new renewable self-supply power plants connected and operating Number (MW) 0 55 Q4 2025 This is the additional capacity of new, connected, and operational generation plants for self-supply. Their construction, connection and entry into operation is expected to be promoted by the entry into force of the Electricity Supply Act. 15 E: Production of electricity from renewable energy sources Milestone Award of contracts for new renewable energy sources generating installations Communication of awards Q4 2023 Communication of awards to co-finance the construction of new renewable energy sources generating installations (hydropower, geothermal, or solar technology for public buildings). The tender specifications shall ensure compliance with the “do no significant harm” technical guidance (2021/C58/01) for selected projects by requiring compliance with relevant EU and national environmental legislation and with Chapter 4.5 ‘Manufacture of hydropower electricity’ (Annex I Delegated Commission Regulation (EU) (C(2021) 2800 final) supplementing the Taxonomy Regulation (EU) 2020/852). 16 E: Production of electricity from renewable energy sources Target Additional power from new renewable electricity generation installations Number (MW) 0 35 Q2 2026 35 MW of renewable energy sources electricity capacity in operation, or the maximum volume compatible with the tender under milestone 15. The total amount of funding shall be at least EUR 50 000 000. 17 F: Further strengthening the electricity distribution network Milestone Opening of a call for tender for a new low-voltage distribution network Publication of tender specifications Q4 2022 Call for tender opened for the construction of a new low-voltage distribution network. The call shall be open until the budgetary envelope is exhausted. The projects shall aim at the effective integration of renewable energy production and storage facilities to the electricity distribution network, including recharging points for electric vehicles. In addition to all mandatory national and European rules laying down requirements for construction and environmental interventions, selection/eligibility criteria shall ensure compliance with the ‘do no significant harm’ Technical Guidance (2021/C58/01). Investments shall strengthen the distribution network, improve its capacity and adaptability, as well as the integration of databases and real-time surveillance. 18 F: Further strengthening the electricity distribution network Target Length of new operational distribution network Number (km) 0 1520 Q2 2026 At least 1520 km of new low voltage distribution network operational, in line with the tender criteria under milestone 17. B: COMPONENT 2: SUSTAINABLE RENOVATION OF BUILDINGS In its National Energy and Climate Plan Slovenia estimates around EUR 9 500 000 000 of investment needs for the renovation of buildings in the period 2021-2030 in order to reduce final energy consumption in buildings by 20 % and greenhouse gas emissions from buildings by at least 70 % by 2030 compared with 2005. The objective of this component of the Slovenian recovery and resilience plan is to promote in-depth renovation of buildings, with a focus on the public building stock, to obtain a reduction of energy consumption of at least 30 % compared to ex ante emissions. These investments and reforms shall contribute to the Country Specific Recommendations addressed to Slovenia in the past two years to “focus investment-related economic policy on […] low carbon and energy transition” (Country Specific Recommendation 3, 2019) and to “focus on investments for the green […] transition, in particular on clean and efficient energy production and use, environmental infrastructure” (Country Specific Recommendation 3, 2020). 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). B.1. Description of the reforms and investments for non-repayable financial support Reform A: Reform of the planning and financing of the energy renovation of buildings in the public sector

The reform shall define cost-effective renovation approaches, policies and measures to promote deep renovations of buildings, including measures to guide investment decisions by individuals, the construction industry and financial institutions and an assessment of expected energy savings and wider benefits, as provided for in the new Long Term Renovation Strategy. In particular, the reform shall put in place a legal ban on the design and installation of heating oil, mazut (fuel oil) and coal boilers for heating in new buildings. This part of the reform shall be implemented through the entry into force of a law by 30 June 2023. The reform shall also establish a revolving fund for energy renovations in the public sector to be self-financed with energy savings by means of an inter-ministerial agreement establishing the legal, technical and economic aspects of the fund by 31 December 2023. Investment B: Sustainable renovation of buildings The objective of the investment is focused on the energy renovation of public buildings and also covers energy renovation of publicly-owned residential buildings. For all the investments, a minimum of 30 % energy savings overall, compared to ex ante emissions, shall be ensured. The investments shall cover costs for the thermal insulation of the building, energy-efficient equipment (windows, glazing, doors), cooling and ventilation systems, energy efficient lighting and control systems. The works shall also ensure high health and environmental standard, by addressing, inter alia, disaster prevention and protection against climate-related hazards, removal of and protection against harmful substances, fire and seismic safety. The renovation of public buildings is expected to include improvement of their accessibility for people with disabilities. Since Slovenia is one of the European countries most exposed to seismic risk, energy renovation shall be carried out in parallel with the seismic renovation to ensure a cost-efficient approach and a long lasting effect of the investment. The works shall also respect the aesthetics and architectural quality of the building, by taking into account the possible cultural protection requirements of renovation in the case of buildings belonging to cultural heritage. The following categories of buildings shall be eligible: ·Buildings of exceptional administrative importance due to the COVID-19 epidemic; ·Buildings of high social importance due to the COVID-19 epidemic; ·Buildings requiring individual upgrading of technical building systems; ·Publicly owned multi-apartment residential buildings. The investment shall also provide the financial allocation to initiate the energy renovation works under the revolving fund to be set-up under the reform. With this initial amount, the investment shall contribute to the energy renovation of other buildings in the public sector. Renovations shall be completed by 30 June 2026. B.2. Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support Sequential Number Related Measure (Reform or Investment) Milestone/ Target Name Qualitative indicators (for milestones) Quantitative indicators (for targets) Timeline for completion (indicate the quarter and the year) Description and clear definition of each milestone and target Unit of measure Baseline Goal Quarter Year 19 A: Reform of planning and financing of energy renovation of buildings in the public sector Milestone Entry into force of a ban on the use of fossil fuels for heating in new buildings Provision in the law indicating the entry into force of the relevant Act Q2 2023 A law shall establish a ban on the design and installation of heating oil, mazut (fuel oil), and coal boilers for heating buildings, as foreseen in the Long-term Strategy for Energy Renovation of Buildings 2050. 20 A: Reform of planning and financing of energy renovation of buildings in the public sector Milestone Establishment of a revolving fund for the energy renovation of buildings in the public sector Adopted decree to establish a systemic financial resource for the implementation of priority energy renovations Q4 2023 The reform shall establish a revolving fund for the implementation of energy renovations of public buildings. The fund shall be self-financed with the financial savings generated by the energy efficiency investments. 21 B: Sustainable renovation of buildings Milestone Opening of a call for tender for the implementation of individual upgrades of technical building systems Publication of tender specifications Q4 2022 Call for tender opened for the implementation of individual upgrades of technical building systems, such as air-conditioning and ventilation systems. The call shall be open until the budgetary envelope is exhausted. Selection/eligibility criteria shall ensure compliance with the ‘do no significant harm’ Technical Guidance (2021/C58/01). 22 B: Sustainable renovation of buildings Milestone Opening of a call for tender for energy and sustainable renovation of publicly owned buildings of high administrative and social importance Publication of tender specifications Q4 2022 Call for tender opened for energy and sustainable renovation of publicly owned buildings of high administrative and social importance. The call shall be open until the budgetary envelope is exhausted. Selection/eligibility criteria shall ensure: a) compliance with the ‘do no significant harm’ Technical Guidance (2021/C58/01); and b) at least a 30 % reduction of direct and indirect greenhouse gas emissions compared to the ex-ante emissions. 23 B: Sustainable renovation of buildings Milestone Opening of a call for tender for energy and sustainable renovation of publicly owned residential buildings. Publication of tender specifications Q4 2022 Call for tender opened for the energy and sustainable renovation of publicly owned residential buildings. The call shall be open until the budgetary envelope is exhausted Selection/eligibility criteria shall ensure: a) compliance with the ‘do no significant harm’ Technical Guidance (2021/C58/01); and b) at least a 30 % reduction of direct and indirect greenhouse gas emissions compared to the ex-ante emissions. 24 B: Sustainable renovation of buildings Target Completed energy and sustainable renovations of buildings of high administrative and social importance Number (m²) 0 29000 Q4 2024 The energy and sustainable renovation of public buildings of high administrative and social importance is completed, in accordance with the tender criteria in milestone 22. 25 B: Sustainable renovation of buildings Target Completed energy and sustainable renovations of buildings of high administrative and social importance Number (m²) 29000 89000 Q2 2026 The energy and sustainable renovation of public buildings of high administrative and social importance is completed, in accordance with the tender criteria in milestone 22. 26 B: Sustainable renovation of buildings Target Completed energy and sustainable renovation of buildings through individual upgrades of technical building systems Number (m²) 0 36000 Q4 2025 The energy and sustainable renovation of buildings through individual upgrades of technical building systems is completed, in accordance with the tender criteria in milestone 21. 27 B: Sustainable renovation of buildings Target Completed energy and sustainable renovation of publicly owned residential buildings implemented Number (m²) 0 20000 Q4 2025 The energy and sustainable renovation of publicly owned residential buildings is completed, in accordance with the tender criteria in milestone 23. 28 B: Sustainable renovation of buildings Target Completed energy and sustainable renovation of public buildings financed under the revolving fund for the energy renovation of public buildings Number (m²) 0 10000 Q2 2026 Completed energy renovation of public buildings in compliance with the ‘do no significant harm’ Technical Guidance (2021/C58/01) and achieving at least a 30 % reduction of direct and indirect greenhouse gas emissions compared to the ex-ante emissions.

C. COMPONENT 3: CLEAN AND SAFE ENVIRONMENT Slovenia faces substantial investment needs in terms of protection against climate-change driven disasters due to the increasing trend of extreme weather events and in particular floods. Such climate-change driven disasters endanger the high share of the Slovenian population living in areas of significant flood risks and cause significant economic damage. Furthermore, water losses remain above the EU average. Such leakages are a waste of surface and ground water, and result in higher energy use for water treatment and distribution purposes. They also bring increased risks of water contamination. The objective of this component of the Slovenian recovery and resilience plan is to implement a coordinated approach for prevention, preparedness, response and recovery in the event of natural climate-related disasters, in particular by improving the infrastructure and the related organisation, research, awareness raising and trainings. The component further aims to improve water management. These investments and reforms shall contribute to the Country Specific Recommendations addressed to Slovenia in the past two years to “focus investment-related economic policy on […] low carbon and energy transition (Country Specific Recommendation 3, 2019) and to “focus on investments for the green […] transition, in particular on clean and efficient energy production and use, environmental infrastructure” (Country Specific Recommendation 3, 2020). This component contributes to environmental preservation and climate adaptation, therefore strengthening ecological, social and economic resilience. 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). C.1. Description of the reforms and investments for non-repayable financial support Reform A. Strengthening preparedness and response in the event of climate-driven disasters The reform shall define the organisation and response to climate-driven disasters through the creation of modular response units specialised and trained to respond to climate-related disasters at national, regional and local level, while redefining the role of the existing units. The structure shall address the climate-related disasters representing the highest risk for Slovenia, such as floods and large wild fires. The reform shall be implemented through the entry into force of a new resolution on the national programme of protection against natural and other disasters by 31 December 2023. By 30 June 2026, the entire territory of Slovenia and all the population, with a particular focus on vulnerable groups, is expected to be covered by the new organisation structure. Reform C. Restoring and mitigating the effects of climate change and climate-related disasters on resilient forestbiodiversity The reform on the forest protection and restoration addresses the Commission recommendations for Slovenia’s Common Agricultural Policy strategic plan (SWD (2020) 394) by fostering sustainable forest management of forestry land, enhancing multifunctionality, forest protection and restoration of forests ecosystems, in particular after catastrophic events. The objective of the reform is to reach good condition of habitats and species linked to the forests in order to enhance ecological services and biodiversity, and to build resilience to threats such as climate change impacts on forests. The Rules on the Conditions for Entry in the Register of Suppliers and other relevant obligations of suppliers and requirements for the marketing of forest reproductive material shall be amended to ensure the appropriate quality of forest reproductive material. Rules on Certificates for Forest Reproductive Material shall be amended to improve tracking and expert supervision. The reform shall be implemented by the Ministry of Agriculture, Forestry and Food, by means of amendments to the Rules on the conditions for entry in the register of suppliers and other obligations of suppliers and requirements for the marketing of forest reproductive material by 31 December 2022. Investment E. Social and economic resilience to climate-related disasters in the Republic of Slovenia The investment shall establish dedicated centres for prevention, preparedness and response measures against climate-driven disasters, such as floods and large wild fires. It shall include trainings for the civil protection forces to ensure integrated actions, as well as awareness raising measures for the general public. It shall also cover the digitalisation of the constructed centre for coordinated response and upgrading of the emergency number 112. The construction of the necessary energy efficient infrastructures shall take into account the need to locate the premises in an adequate area exposed to the relevant climate-related risks. It shall be carried out by the Ministry of Defence by means of competitive public tenders taking into account green public procurement requirements. The investment shall also cover trainings courses to deal with specific risks, such as floods and large wild fires, in the period 2025-2026, as well as awareness-raising activities among the different target groups in the population in the period 2021-2026.

The targets related to the implementation of the investment shall be completed by 31 December 2025. Investment F. Reducing flood risks and reducing the risk to other climate-related disasters The investments to prevent flood risks shall include water retention systems and the expansion of existing spillage areas. Theyshall prioritise nature-based solutions and green infrastructures to the extent possible. In addition, specific investments shall target the risk of landslides. Nature-based solutions shall be included among the project selection criteria. The investment in reducing flood risks shall be implemented through dedicated agreements with municipalities. The projects shall comply with the relevant annexes of the Commission Delegated Regulation (EU) (C(2021) 2800 final) supplementing the Taxonomy Regulation (EU) 2020/852. It is expected that this measure does not do significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measure and the milestones and targets to be fulfilled by Slovenia. In particular, full and substantive compliance shall be demonstrated with the legal provisions that apply. The investment shall be completed by 30 June 2026. Investment G. Centre for seeds, nurseries and forest protection The objective of the investment is to increase the long-term quantity, quality and resilience of EU forests, notably against fires, pests and other threats that are likely to increase due to climate change. Biodiversity-friendly forest practices shall be further developed with a focus on genetic preservation and genetic diversity. The construction of the necessary energy efficient research infrastructures, including a forest seed department, a tree nursery department, and a forest protection department, shall take into account the need to concentrate the infrastructure and knowledge base for further innovation, development and research in this domain. It shall be implemented by the Slovenian Forestry Institute through public calls for tender taking into account green public procurement requirements. The investment shall be completed by 31 December 2024. Investment H. Urban waste water discharge and treatment projects The investment shall finance the construction of additional front-to-end waste water systems with a net zero energy use and the renewal of additional front-to-end waste water system to lead to a decreased average energy use by at least 10 % (solely by energy efficiency measures and not by material changes or changes in load). The investments shall focus on projects concerning waste water systems contributing to Natura 2000 sites and water protection areas. The investment shall be implemented through grants to municipalities for projects selected by the Ministry of Environment and Spatial Planning through a dedicated call for projects. The investment shall be completed by 30 June 2026. Investment I. Drinking water supply and savings projects The objective of the investment is to address water losses in Slovenia, which remain significant due to the age of the water infrastructure. The investment consists in building drinking water supply systems with an average energy consumption of ≤ 0,5 kWh or an Infrastructure Leakage Index (ILI) of ≤ 1,5, and in renovating existing drinking water supply systems to decrease the average energy consumption by more than 20 % or decrease leakage by more than 20 %.

The investment shall be implemented through grants to municipalities for projects selected by the Ministry of Environment and Spatial Planning through a dedicated call for projects. The investment shall be completed by 30 June 2026. C.2. Milestones, targets, indicators, and timetable for monitoring and implementation for non-repayable financial support Sequential Number Related Measure (Reform or Investment) Milestone / Target Name Qualitative indicators (for milestones) Quantitative indicators (for targets) Indicative timeline for completion Description of each milestone and target Unit of measure Baseline Goal Quarter Year 29 A: Strengthening preparedness and response in the event of climate-driven disasters Milestone Entry into force of a resolution on the national programme of protection against natural and other disasters Provision in the resolution indicating the entry into force of a national programme of protection against natural and other disasters Q4 2023 The Resolution shall be adopted by the National Assembly of the Republic of Slovenia. It shall define the organisation and response to climate-driven disasters, the operation of newly established modular response units to climate-driven disasters, their training, and the functioning and role of existing units in response to climate-driven disasters. It shall aim at a faster, more coordinated and more effective response to climate-related disasters (floods, large-scale wild fires and other climate-related disasters). 30 E: Social and economic resilience to climate-related disasters in the Republic of Slovenia Target Newly established training and response facilities for climate-related operational disasters Number 0 3 Q4 2025 Entry into operation of the National Centre for Coordinated Response to Climate Conditional Disasters and 2 sub-centres for training modular flood response and large-scale wild fire response units. The centres shall have a primary energy demand of at least 20 % lower than that required for a nearly zero-energy building under the national rules on the construction of nearly zero energy buildings. 31 E: Social and economic resilience to climate-related disasters in the Republic of Slovenia Target Participants with completed trainings in responding to floods and large-scale wild fires Number 0 2000 Q4 2025 Development of adapted programmes and completed training for a total of 2000 individuals (1000 individuals for flood response and 1000 individuals to respond to large-scale wild fires). 32 F: Reducing flood risks and reducing the risk to other climate-related disasters Milestone Award of contracts for flood safety investments Communication of awards Q4 2022 Award of contracts for flood safety investments. Tender criteria shall give priority to nature based solution measures and green infrastructure. The contracts shall ensure that projects are implemented in accordance with the EU acquis and environmental regulations and the annexes to Commission Delegated Regulation (C(2021)2800 final) supplementing the Taxonomy Regulation (2020/852). 33 F: Reducing flood risks and reducing the risk to other climate-related disasters Target Rehabilitated sites threatened by landslides due to seismic risk Number 0 6 Q4 2025 Completed projects for reducing the impact of landslides due to seismic risks. The projects shall be in compliance with the ‘Do no significant harm’ Technical Guidance (2021/C58/01). 34 F: Reducing flood risks and reducing the risk to other climate-related disasters Target Population benefiting from flood protection projects Number 0 6000 Q2 2026 The target represents the size of the population in the area where flood-protection projects have been completed. 35 F: Reducing flood risks and reducing the risk to other climate-related disasters Target Number of completed flood protection projects supporting, as far as possible, ‘nature based solution’ and green measures Number 0 5 Q4 2025 The target is the concrete number of projects completed in the area of floods protection, in line with the agreements under milestone 32. Projects shall contribute to reducing flood risks in identified areas of significant flood impact in Slovenia in accordance with Article 5(1) of the Floods Directive. They shall include as far as possible nature based solution measures. 36 C: Restoring and mitigating the effects of climate change and climate-related disasters on resilient forest biodiversity Milestone Entry into force of amendments to rules on conditions for entry in the register of suppliers and other obligations of suppliers and on the requirements concerning the marketing of forest reproductive material Provision in the amendments indicating the entry into force of rules on conditions for entry in the register of suppliers and other obligations of suppliers and on the requirements concerning the marketing of forest reproductive material Q4 2022 The Ministry of Agriculture, Forestry, and Food shall adopt the following amendments: - The conditions for entry in the register of suppliers and other obligations of suppliers and on the requirements concerning the marketing of forest reproductive material shall ensure the quality of forest reproductive material. - The Certificates for Forest Reproductive Material shall allow tracking of forest reproductive material. 37 G: Centre for seeds, nurseries and forest protection centre Milestone Centre for seeds, nurseries and forest protection is operational Completion of construction works and operational licence obtained Q4 2024 The Centre shall include at least 3000 square metres of research areas. Research and development activities in the field of forest seed, nursery and forest protection shall be carried out at the Centre. The new building shall show a primary energy demand of at least 20 % lower than that required for a nearly zero-energy building under the national rules on the construction of nearly zero energy buildings. 38 H: Urban waste water discharge and treatment projects Milestone Award of contracts for urban waste water discharge and treatment projects Communication of awards Q4 2022 Award of contracts for 15 urban waste water discharge and treatment projects. Projects shall address the reconstruction of existing systems to increase energy efficiency and reduce the consumption of electricity by at least 10 %. Newly built systems shall have a net zero energy consumption. Projects shall focus on nature protection areas. 39 H: Urban waste water discharge and treatment projects Target Number of completed urban waste water discharge and treatment projects Number 0 5 Q4 2024 Projects on the reconstruction of existing systems to increase energy efficiency and reduce the consumption of electricity completed in accordance with requirements under milestone 38. 40 H: Urban waste water discharge and treatment projects Target Number of completed urban waste water discharge and treatment projects Number 5 12 Q4 2025 Projects on the reconstruction of existing systems to increase energy efficiency and reduce the consumption of electricity completed in accordance with requirements under milestone 38. 41 H: Urban waste water discharge and treatment projects Target Number of completed urban waste water discharge and treatment projects Number 12 15 Q2 2026 Projects on the reconstruction of existing systems to increase energy efficiency and reduce the consumption of electricity completed in accordance with requirements under milestone 38. 42 I: Drinking water supply and savings projects Milestone Award of contracts for drinking water supply projects Communication of awards Q4 2022 Award of contracts for drinking water supply projects. Projects shall address the reconstruction of existing systems to increase energy efficiency and reduce the consumption of the electricity by at least 10 %, and with the aim of ensuring that a newly built system has an average energy consumption of less than or equal to 0.5 kWh or an ILI of 1.5 or less. 43 I: Drinking water supply and savings projects Target Number of completed drinking water supply projects Number 0 5 Q4 2024 Projects for reconstruction of existing systems to increase energy efficiency and reduce the consumption of the electricity completed in accordance with requirements under milestone 42. 44 I: Drinking water supply and savings projects Target Number of completed drinking water supply projects Number 5 12 Q4 2025 Projects for reconstruction of existing systems to increase energy efficiency and reduce the consumption of the electricity completed in accordance with requirements under milestone 42. 45 I: Drinking water supply and savings projects Target Number of completed drinking water supply projects Number 12 15 Q2 2026 Projects for reconstruction of existing systems to increase energy efficiency and reduce the consumption of the electricity completed in accordance with requirements under milestone 42. C.3. Description of the reforms and investments for the loan Reform B. Strengthening prevention to increase flood safety The reform specifically addresses the risk of floods, which is among the most relevant climate-change-related risk for Slovenia. The entry into force of a new Flood Risk Management Plan shall accelerate the planning and implementation of measures and projects that contribute to the prevention of the consequences of floods and avalanches. Key elements of the reform shall be the establishment of a river control service and the introduction of automated solutions for control systems. The Water Directorate of the Republic of Slovenia shall be reorganised to achieve decentralisation and optimisation of the processes. A Flood Risk Management Plan for the period 2022-2026 shall enter into force by 31 December 2022 and shall ensure that flood and landslide risk management becomes a permanent task with dedicated resource from the national budget. The reform shall promote future investments through nature-based solutions and green infrastructures. Reform D. Increasing the efficiency of the operation of public environmental protection services The reform addresses the key challenge of losses in water management in Slovenia, by improving the organisation and control of the public service and by ensuring the sustainability of the financing of infrastructure upgrades. The reform shall upgrade the standard for the provision of the public service to increase efficiencies in water management and enabling reuse systems. The reform shall ensure long-term sustainability of the financing of infrastructure investments by reviewing the cost-effectiveness of the charges and levies on water use. Another key aim of the reform shall be the upgrade of the information system for monitoring and reporting of the activity of public service providers. The reform shall be implemented by means of amending the regulations for the implementation of public services and the entry into force of a new Utilities Act for Environmental Protection by 31 December 2022. Investment F. Further reducing flood risks and reducing the risk to other climate-related disasters Considering the large investment gap, the component includes additional investments to prevent flood risks. The investment includes water retention systems, the expansion of existing spillage areas and shall prioritise nature-based solutions and green infrastructures to the extent possible. For this purpose, nature-based solutions shall be included among the project selection criteria. The projects shall comply with the relevant annexes of the Commission Delegated Regulation (EU) (C(2021) 2800 final) supplementing the Taxonomy Regulation (EU) 2020/852. It is expected that this measure does not do significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) 2020/852, taking into account the description of the measure and the milestones and targets to be fulfilled by Slovenia. In particular, full and substantive compliance shall be demonstrated with the legal provisions that apply

The investment shall be implemented through dedicated agreements with the municipalities and shall be completed by 30 June 2026. Investment H. Further projects for the discharge, treatment and re-use of urban waste water The investment shall finance the construction of additional front-to-end waste water systems with a net zero energy use and the renewal of additional front-to-end waste water system to lead to a decreased average energy use by at least 10 % (solely by energy efficiency measures and not by material changes or changes in load). The investments shall focus on projects concerning waste water systems contributing to Natura 2000 sites and water protection areas. The investment shall be implemented through long-term loans at favourable interest rates to municipalities for projects selected by the Ministry of Environment and Spatial Planning through a dedicated call for projects. The investment shall be completed by 30 June 2026. Investment I. Further drinking water supply and savings projects The investment shall build additional drinking water supply systems with an average energy consumption of ≤ 0,5 kWh or an Infrastructure Leakage Index (ILI) of ≤ 1,5, and shall renovate existing drinking water supply systems to decrease the average energy consumption by more than 20 % or decrease leakage by more than 20 %. The investment shall be implemented by municipalities for projects selected by the Ministry of Environment and Spatial Planning through a dedicated call for projects. The investment shall be completed by 30 June 2026. C.4. Milestones, targets, indicators, and timetable for monitoring and implementation for the loan Sequential Number Related Measure (Reform or Investment) Milestone / Target Name Qualitative indicators (for milestones) Quantitative indicators (for targets) Indicative timeline for completion Description of each milestone and target Unit of measure