Source: EURLEX
Language: en
Format: md

![european flag](./../../../images/eclogo.jpg)EUROPEAN COMMISSION

Brussels, 13.12.2024

COM(2024) 587 final

2024/0325(NLE)

Proposal for a

COUNCIL IMPLEMENTING DECISION

amending Implementing Decision (EU) (ST 10686/21 INIT; ST 10686/21 ADD 1) of 28 July 2021 on the approval of the assessment of the recovery and resilience plan for Cyprus

2024/0325 (NLE)

Proposal for a

COUNCIL IMPLEMENTING DECISION

amending Implementing Decision (EU) (ST 10686/21 INIT; ST 10686/21 ADD 1) of 28 July 2021 on the approval of the assessment of the recovery and resilience plan for Cyprus

THE COUNCIL OF THE EUROPEAN UNION,

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

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
[1](#footnote2)
, and in particular Article 20(1) thereof,

Having regard to the proposal from the European Commission,

Whereas:

(1)Following the submission of the national recovery and resilience plan (‘RRP’) by Cyprus on 17 May 2021, the Commission has proposed its positive assessment to the Council. The Council approved the positive assessment by means of the Council Implementing Decision of 28 July 2021
[2](#footnote3)
. That CID was amended on 8 December 2023 and 16 July 2024
[3](#footnote4)
.

(2)On 25 October 2024, Cyprus made a reasoned request to the Commission to make a proposal to amend the Council Implementing Decision of 28 July 2021 in accordance with Article 21(1) of Regulation (EU) 2021/241 on the grounds that the RRP is partially no longer achievable because of objective circumstances. On that basis, Cyprus has submitted an amended RRP.

Amendments based on Article 21 of Regulation (EU) 2021/241

(3)The amendments to the RRP submitted by Cyprus because of objective circumstances concern two measures.

(4)Cyprus has explained that two measures have been amended to implement better alternatives in order to achieve the original ambition of the measure. This concerns milestone 48 of measure C2.1I10, Market Management System to facilitate the opening of the electricity market to competition under component C2.1, Climate neutrality, energy efficiency and renewable energy and milestone 140 of measure C3.3R4, Design and establish a National Promotional Agency under component C3.3, Business support for competetiveness. Cyprus has explained that the proposed amendment for measure C2.1I10 is due to market participants' lack of preparedness and due to the need to reflect the findings of the ex-ante assessment analysis for measure C3.3R4. On this basis, Cyprus has requested to amend the aforementioned milestones and the description of the measures. Furthermore, Cyprus has requested to add milestone 48a under measure C2.1I10, Market Management System to facilitate the opening of the electricity market to competition under component C2.1, Climate neutrality, energy efficiency and renewable energy. Cyprus has explained that the proposed amendments will ensure that the participants are prepared to participate in the market as well as that the regulator can declare commercial Market Operation with the first financial transaction as completed. The Council Implementing Decision of 28 July 2021 should be amended accordingly.

(5)The Commission considers that the reasons put forward by Cyprus justify the amendment(s) pursuant to Article 21(2) of Regulation (EU) 2021/241, and the Council Implementing Decision of 28 July 2021 should be amended accordingly.

Commission’s assessment

(6)The Commission has assessed the amended RRP against the assessment criteria laid down in Article 19(3) of Regulation (EU) 2021/241.

(7)The Commission considers that the amendments put forward by Cyprus do not affect the positive assessment of the RRP set out in the Council Implementing Decision  ST 10686/21 INIT of 28 July 2021 on the approval of the assessment of the RRP for Cyprus regarding the relevance, effectiveness, efficiency and coherence of the RRP against the assessment criteria laid down in Article 19(3), points (a), (b), (c), (d),(da), (db), (e), (f), (g), (h), (i), (j) and (k).

Positive assessment

(8)Following the positive assessment by the Commission of the amended RRP with the finding that the RRP satisfactorily complies with the criteria for assessment set out in Regulation (EU) 2021/241, in accordance with Article 20(2) of and Annex V to that Regulation, the reforms and investment projects necessary for the implementation of the amended RRP, the relevant milestones, targets and indicators, and the amount made available from the Union for the implementation of the amended RRP in the form of non-repayable financial support should be set out.

Financial contribution

(9)The estimated total costs of Cyprus’s amended RRP is EUR  1 220 971 974. As the amount of the estimated total costs of the amended RRP is higher than the updated maximum financial contribution available for Cyprus, the financial contribution determined in accordance with Article 20(4) allocated for Cyprus amended RRP should be equal to EUR 1 020 223 681. 

(10)The loan support made available to Cyprus amounting to EUR 200 320 000 remains unchanged.

(11)Council Implementing Decision ST 10686/21 INIT of 28 July 2021 on the approval of the assessment of the RRP for Cyprus should therefore be amended accordingly. For the sake of clarity, the Annex to that Council Implementing Decision should be replaced entirely,

HAS ADOPTED THIS DECISION:

Article 1

The Council Implementing Decision of 28 July 2021 on the approval of the assessment of the recovery and resilience plan for Cyprus is amended as follows:

(1) Article 1 is replaced by the following:

“Article 1

Approval of the assessment of the RRP

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

(2) the Annex is replaced by the text in the Annex to this Decision.

Article 2
  
Addressee

This Decision is addressed to the Republic of Cyprus.

Done at Brussels,

For the Council

   The President

:   [(1)](#footnoteref2)
       OJ L 57, 18.2.2021, p. 17
:   [(2)](#footnoteref3)
       ST 10686/21 INIT; ST 10686/21 ADD 1
:   [(3)](#footnoteref4)
       ST 15571/23 INIT + ST 15571/23 ADD 1 + ST 15571/23 ADD 1 COR 1; ST 11806/24 INIT + ST 11806/24 ADD 1

[Top](#document1)

![european flag](./../../../images/eclogo.jpg)EUROPEAN COMMISSION

Brussels, 13.12.2024

COM(2024) 587 final

ANNEX

to the

Proposal for a COUNCIL IMPLEMENTING DECISION

amending Implementing Decision (EU) (ST 10686/21 INIT; ST 10686/21 ADD 1) of 28 July 2021 on the approval of the assessment of the recovery and resilience plan for Cyprus

ANNEX

SECTION 1: REFORMS AND INVESTMENTS UNDER THE RECOVERY AND RESILIENCE PLAN

1.Description of Reforms and Investments

A. COMPONENT 1.1: Resilient and effective health system, enhanced civil protection

This component of the Cypriot Recovery and Resilience plan addresses the challenge of universal access to high-quality healthcare in Cyprus as well as civil protection’s overall emergency preparedness and response. The objective of this component is to strengthen the effectiveness, accessibility and overall resilience of the healthcare sector supporting the recently introduced National Health System through various interventions. These include the (i) modernisation and digitalisation of health care infrastructure and equipment, (ii) stepping-up of e-health services, (iii) accreditation of provided health care services and introduction of evidence-based clinical protocols and quality monitoring systems, as well as (iv) upskilling opportunities for health workers. It further aims at enhancing Cyprus’ civil protection system by establishing a modern Public Warning System.

The component addresses the country-specific recommendations on health (country-specific recommendation 1 of 2020 and country-specific recommendation 3 of 2019).

A.1. 
   Description of the reforms and investments for non-repayable financial support

Reform 1 (C1.1R1): National Centre for Clinical Evidence and Quality Improvement

The objective of the reform is to enhance the quality and sustainability of the healthcare system.

For this purpose, a National Centre for Clinical Evidence and Quality Improvement shall be established. A team of experts in collaboration with the Ministry of Health and the Coordinating Committee for the National Centre for Clinical Evidence and Quality Improvement will develop evidence-based medicine (EBM) clinical guidelines, protocols and pathways for all levels of care (primary, secondary and tertiary healthcare) in close cooperation with healthcare professionals and patients. Monitoring and evaluation processes such as clinical audits, peer reviews and inspections shall also be developed. Furthermore, an IT system enabling implementation and monitoring of the clinical standards and protocols and including an e-learning platform shall be developed.

The implementation of the reform shall be completed by 31 December 2025.

Reform 2 (C1.1R2): Design of an Electronic platform for the surveillance of Nosocomial Antibiotic Consumption and Healthcare – Associated Infections

The aim of the reform is to support the digital transition of the healthcare sector and strengthen the health system’s effectiveness and resilience.

It shall consist of the development of an electronic platform to process data from hospital pharmacies (nosocomial antibiotic consumption), microbiology laboratories (antimicrobial resistance), and hospitals (healthcare-associated infections (HAIs)).

The implementation of the reform shall be completed by 31 December 2025.

Investment 1 (C1.1I1): New facilities for the Cyprus Blood Establishment and procurement of the latest technology attendant equipment

The objective of the investment is to enhance central Blood Establishment operations in Cyprus.

This measure shall entail the construction of new facilities for the Cyprus Blood Establishment and the procurement of the latest technology attendant equipment. About 80 000 blood products (such as red blood cells, platelets and fresh frozen plasma) shall be able to be distributed for clinical use across the whole country. The new facilities shall have a primary energy demand that is at least 20% lower than defined in the nearly zero-energy building (NZEB) requirement.

The implementation of the investment shall be completed by 30 June 2025.

Investment 2 (C1.1I2): Cyprus Innovative Public Health information and communications technology (ICT) System

The aim of the measure is to establish the Influenza Sentinel Surveillance module of the Cyprus Innovative Public Health information and communications technology (ICT) System to support public health sector bodies in making evidence-based decisions.

It shall include both the development of the necessary digital tools (such as software and ICT infrastructure) as well as the upskilling of health workers and Ministry of Health personnel to use the system for data collection and information extraction. Following the European Centre for Disease Prevention and Control (ECDC) and World Health Organisation (WHO) guidelines, the Influenza Sentinel Surveillance (ISS) module of the Cyprus Innovative Public Health ICT System shall record epidemiological data informing the Ministry of Health of potential epidemiological outbursts. The Ministry of Health shall assign 30 doctors as sentinels who shall enter data in the Influenza Sentinel Surveillance (ISS) module of the Cyprus Innovative Public Health ICT System. 

The implementation of the investment shall be completed by 31 December 2025.

Investment 3 (C1.1I3): Purchase/replacement of medical equipment in hospitals

The investment aims at enabling private hospitals to invest within a short timeframe in the modernisation of their medical equipment increasing the quality of health services provided.

The measure shall comprise a support scheme for private hospitals supporting the upgrade or replacement of medical equipment. Applications for funding shall be assessed based on transparent selection criteria by a special Assessment Committee, which shall be appointed by the Minister of Health.

The implementation of the investment shall be completed by 31 December 2025.

Investment 4 (C1.1I4): Accreditation of public and private hospitals

The objective of this investment is to support the accreditation of hospitals, enabling their registration within the National Health System (NHS) and enhancing the quality assurance of health care services provided.

It shall consist in a sponsorship scheme facilitating the accreditation of hospitals by covering part of (i) the costs incurred by private and public hospitals related to accreditation advisory services from external experts (on how to make the necessary preparations for the accreditation) and (ii) accreditation fees charged by internationally recognised bodies.

The implementation of the investment shall be completed by 30 June 2026.

Investment 6 (C1.1I6): Deployment of generic cross border e-health services in Cyprus

The measure aims at extending e-health services to allow cross-border exchange of patient health information (in particular patient summaries and e-prescriptions), to become part of a secure peer-to-peer e-health network within the EU.

It shall consist in putting in operation a cross-border data exchange between Cyprus and Union Member States with operational National Contact Points for eHealth (NCPeH), such as e-prescriptions, e-dispensations, patient summaries, and additional data sets (amongst others discharge forms, laboratory results and imaging) as agreed with the eHealth Digital Service Infrastructure (eHDSI).

The implementation of the investment shall be completed by 30 June 2025.

Investment 7 (C1.1I7): Public warning system for supporting emergency operations through SMS

The objective of the investment is to enhance Cyprus’ civil protection system by establishing a modern public warning system targeting the whole population through a mobile application to increase public safety, preparedness and resilience.

The measure shall consist in putting in operation a public warning system reaching the whole population through a mobile application or SMS for alerting on imminent or developing emergencies.

The implementation of the investment shall be completed by 31 December 2025.

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 | C1.1R1  National Centre for Clinical Evidence and Quality Improvement | Target | Clinical protocols prepared, audited and peer reviewed | - | Number | 0 | 50 | Q4 | 2024 | At least 50 clinical protocols for all levels of care hall be prepared, audited and peer reviewed by a team of experts, with key characteristics of protocols being:  • evidence-based medicine (EBM) clinical practice recommendations,  • implementation guide,  • audit plan. |
| 2a | C1.1R1  National Centre for Clinical Evidence and Quality Improvement | Target | Clinical protocols prepared, audited and peer reviewed | - | Number | 50 | 90 | Q4 | 2025 | At least 90 clinical protocols for all levels of care, shall be prepared, audited and peer reviewed by team of experts, with key characteristics of protocols being:  • evidence-based medicine (EBM) clinical practice recommendations,  • implementation guide,  • audit plan. |
| 2b | C1.1R1  National Centre for Clinical Evidence and Quality Improvement | Milestone | Development of IT system including an e-learning platform completed and system is operational | completion of the installation of the IT system and of operation | - | - | - | Q4 | 2025 | An IT system enabling implementation and monitoring of clinical standards and protocols and e-learning platform is developed and is operational. |
| 3 | C1.1R2  Design of an Electronic platform for the surveillance of Nosocomial Antibiotic Consumption and Healthcare – Associated Infections | Milestone | Adoption of the list of health care facilities | Adoption of the list of health care facilities | - | - | - | Q1 | 2023 | Adoption of the list of healthcare facilities  Timeline: Q1 2023  Description: Adoption of the list of health care facilities that shall be providing information to the Ministry of Health on antibiotic consumption and healthcare-associated infections that shall be monitored by the Ministry of Health. |
| 4 | C1.1R2  Design of an Electronic platform for the surveillance of Nosocomial Antibiotic Consumption and Healthcare – Associated Infections | Milestone | Electronic platform including monitoring system is fully operational | Electronic platform up and running | - | - | - | Q4 | 2025 | Electronic platform to process data from hospital pharmacies (nosocomial antibiotic consumption), microbiology laboratories (antimicrobial resistance), and hospitals (healthcare-associated infections (HAIs)) shall be fully operational (Installed at all points of use and real data are being entered) and a system monitoring its effectiveness shall be in place. |
| 5 | C1.1I1  New facilities for the Cyprus Blood Establishment and procurement of the latest technology attendant equipment | Milestone | Contract signature for the construction of the Cyprus Blood Establishment | Signature of the contract | - | - | - | Q3 | 2022 | Signature of the contract with the selected tenderer(s) (contractor(s)) selected under a competitive call for tenders for the construction of the Cyprus Blood Establishment. |
| 6 | C1.1I1  New facilities for the Cyprus Blood Establishment and procurement of the latest technology attendant equipment | Milestone | New blood establishment facilities including all equipment are fully operational | Completion of the construction and start of operations | - | - | - | Q2 | 2025 | The new blood establishment facilities shall be constructed and fully operational housing the Cyprus Blood Establishment. The new facilities shall have a primary energy demand that is at least 20% lower than defined in the nearly zero-energy building (NZEB) requirement. New relevant equipment shall be operational and the transfer of the existing equipment from the present Blood Establishment premises to the new facilities shall be complete. |
| 7 | C1.1I2  Cyprus Innovative Public Health information and communications technology (ICT) System | Milestone | Influenza Sentinel Surveillance (ISS)System | Fully operational system | - | - |  | Q2 | 2022 | The Influenza Sentinel Surveillance System module of the Cyprus Innovative Public Health information and communications technology (ICT) System shall be operational and a system monitoring its effectiveness shall be in place. |
| 8 | C1.1I2  Cyprus Innovative Public Health information and communications technology (ICT) System | Target | Sentinels entering data in the Influenza Sentinel Surveillance System module | - | Number | 0 | 30 | Q4 | 2025 | Following the European Centre for Disease Prevention and Control (ECDC) and World Health Organisation (WHO) guidelines, the Influenza Sentinel Surveillance System (ISS) module of the Cyprus Innovative Public Health ICT System shall record epidemiological data entered in the online digital platform by general practitioners (GPs) to inform the Ministry of Health of potential outbursts. The Ministry of Health shall assign at least 30 doctors as sentinels that shall enter data in the ISS module of the Cyprus Innovative Public Health ICT System. |
| 9 | C1.1I3  Purchase/replacement of medical equipment in hospitals | Target | Health institutions having benefitted from the financial support scheme | - | Number | 0 | 10 | Q4 | 2023 | At least ten of the applicant health institutions of various categories have received financial support from the scheme for medical equipment acquisition. |
| 10 | C1.1I3  Purchase/replacement of medical equipment in hospitals | Target | Health institutions having benefitted from the financial support scheme | - | Number | 10 | 23 | Q4 | 2025 | At least 23 of the applicant health institutions of various categories have received financial support from the scheme for medical equipment acquisition. |
| 11 | C1.1I4  Accreditation of public and private hospitals | Target | Health institutions having benefitted from the scheme covering accreditation related costs | - | Number | 0 | 20 | Q2 | 2025 | At least 20 of the applicant health institutions of various categories have been supported from the scheme for gaining accreditation. |
| 12 | C1.1I4  Accreditation of public and private hospitals | Target | Health institutions having benefitted from the scheme covering accreditation related costs | - | Number | 20 | 45 | Q2 | 2026 | At least 45 of the applicant health institutions of various categories have been supported from the scheme for gaining accreditation. |
| 13 | C1.1I6  Deployment of generic cross border e-health services in Cyprus | Milestone | Completion of the analysis, design and development phase of the IT System for cross-border e-health services | Completion of the analysis, design and development phase of the IT System, as provided in a dedicated report by the deliverables acceptance team in the contracting authority | - | - | - | Q4 | 2023 | The analysis, design and development of the IT System phase shall be completed.  Specifications shall include:     a) Service Location and capability lookup Profile / the Cross-Community Patient Discovery Profile (to locate communities that hold patient relevant health data and the translation of patient identifiers across communities holding the same patient’s data).  b) open source National Contact Point (OpenNCP) update that supports the eHDSI Automatic Data Collection (eADC).  c) Update Patient Summary (PS-A), e-Prescription (eP), e-Dispencing (eD), unstructured clinical documents, and patient access to cross border data services, based on Wave 6 Clinical Document Architecture (W6 CDA) Implementation Guidelines by the e-Health network.  d) A new service shall also be created to enable the exchange of structured and coded clinical documents that may include medical images/imaging reports, discharge reports, laboratory results. |
| 14 | C1.1I6  Deployment of generic cross border e-health services in Cyprus | Milestone | Full operation of cross-border healthcare data exchange | Approval of the system by the National eHealth Authority | - | - | - | Q2 | 2025 | Full operation of cross-border data exchange between Cyprus and countries with Operational National Contact Points for eHealth (such as e-prescriptions, e-dispensations, patient summaries exchanged with Cyprus) and additional data sets (such as discharge forms, laboratory results and imaging) as agreed with eHealth Digital Service Infrastructure. |
| 15 | C1.1I7  Public warning system for supporting emergency operations through SMS | Milestone | Newly established public warning system and its monitoring system are fully operational | The Technical Committee signs off final Systems Acceptance and go-live Report  for the public warning system | - | - | - | Q4 | 2025 | The public warning system shall be operational and a monitoring system shall be in place reaching the whole population through a mobile application and/or SMS.  The terminal points machines for SMS sending shall be fully operational. |

A.3. 
   Description of the reforms and investments for the loan

Reform 3 (C1.1R3): Gradually shifting of the healthcare provision and reimbursement framework towards value-based models

The aim of the reform is to introduce and gradually move to value-based healthcare models to complement current volume-based healthcare models, to improve health outcomes and limit costs.

It shall consist in the development of appropriate value-based models and initiatives, with relevant monitoring mechanisms to measure and track the success of the reform, and the introduction of value-based models in the Reimbursement Decision for primary and in-patient care as per the General Health System Legislation.

The implementation of the reform shall be completed by 31 March 2023.

Investment 5 (C1.1I5): Enhancement, modernisation and upgrade of Cyprus State Hospitals

The objective of this investment is to enhance, modernise and/or upgrade the Cyprus State Hospitals to enable them to compete on an equal basis with the private sector whilst at the same time improving the quality of healthcare services as well as working conditions for health workers in public hospitals.

This measure shall consist in the following actions to enhance, modernise and/or upgrade the State Hospitals: (1) enhancement of the Makarios Hospital for Children to offer a complete treatment of cases to children; (2) construction and/or extension of Haemodyalisis Unit at Paphos and Limassol Hospitals; (3) construction of a Mental Health Hospital; (4) enhancement of the Limassol General Hospital; (5) enhancement of the Paphos General Hospital; (6) extension of Invasive Radiology Unit including medical equipment (such as Angiography Unit); and (7) construction of a COVID-19 Unit at the Famagusta Hospital. The Haemodyalisis unit at Paphos Hospital, the new Mental Health Hospital and the new building of Makarios Hospital for Children shall have a primary energy demand that is at least 20% lower than defined by the nearly zero-energy building (NZEB) requirement.

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 |  |
| 16 | C1.1R3  Gradually shifting the healthcare provision and reimbursement framework towards value-based models. | Milestone | Value-based reimbursement to be reflected for primary and in-patient care | Value-based reimbursement to be reflected in the Reimbursement Decision | - | - | - | Q1 | 2023 | Annual reimbursement decisions in the general health system shall be adjusted to include value-based reimbursement for primary and in-patient care. |
| 17 | C1.1I5 Enhancement, modernisation and upgrade of Cyprus State Hospitals | Target | Actions to enhance, construct and/or upgrade State hospitals | - | Number | 0 | 4 | Q2 | 2024 | At least four actions to enhance, construct and/or upgrade State hospitals shall be implemented. The Haemodyalisis unit at Paphos Hospital, the new Mental Health Hospital and the new building of Makarios Hospital for children shall have a primary energy demand that is at least 20% lower than defined by the nearly zero-energy building (NZEB) requirement. The end of works shall be attested by taking over issued certificates, of the completed works. |
| 18 | C1.1I5 Enhancement, modernisation and upgrade of Cyprus State Hospitals | Target | Actions to enhance, construct and/or upgrade State hospitals | - | Number | 4 | 7 | Q2 | 2026 | Seven actions to enhance, construct and/or upgrade State hospitals shall be implemented. The Haemodyalisis unit at Paphos Hospital, the new Mental Health Hospital and the new building of the Makarios Hospital for children shall have a primary energy demand that is at least 20% lower than defined by the nearly zero-energy building (NZEB) requirement. The end of works shall be attested by taking over issued certificates of the completed works. |

B. COMPONENT 2.1: Climate neutrality, Energy efficiency and Renewable Energy

This component of the Cypriot Recovery and Resilience Plan aims to address the challenge of climate change mitigation by contributing to the country’s transition to climate neutrality.

The objectives of the component are to improve the environment policy through measures relating to green taxation, the opening up of the electricity market and the facilitation of licensing of renewable energy and renovation projects. The component aims to improve the energy efficiency of the building stock and other infrastructure and to support green investments for SMEs, households, the wider public sector and NGOs. The component also targets the alleviation of energy poverty and aims to address Cyprus’ energy isolation.

The component supports addressing the Country Specific Recommendations for the years 2019 and 2020 that recommend focusing investment and investment-related policies on energy efficiency and renewable energy (Country-Specific Recommendation 4 of 2019 and Country-Specific Recommendation 3 of 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 1 (C2.1R1): Green Taxation

The objectives of the measure are to promote a shift towards a more efficient use of environmental resources, reduce greenhouse gas emissions and to increase the penetration of renewable energy.

The reform shall consist in legislative changes introducing a carbon tax for fuels used in the sectors of the economy that do not fall under the EU greenhouse gas Emissions Trading System. The reform shall also entail the gradual introduction of a levy on water, as well as the introduction of a charge on household/landfill waste. The reform shall aim at making a tangible contribution to reaching the 2030 climate and energy targets to reduce greenhouse gas emissions and increase the share of renewable energy. The legislative changes shall be based on the findings of an independent study to be undertaken.

The implementation of the reform shall be completed by 30 June 2026.

Reform 2 (C2.1R2): Independence of Cyprus Transmission System Operator (TSOC) from the incumbent Electricity Authority of Cyprus

The objective of the measure is to enhance competition in the electricity market by creating conditions for new investors to participate in the generation, storage, aggregation, demand response and supply of electricity.

The reform shall consist in ensuring the independence of the Cyprus Transmission System Operator (TSOC) from the incumbent Electricity Authority of Cyprus (EAC) in terms of governance, financial and personnel management. The measure shall also facilitate supplier switching, which is expected to reduce the cost of electricity for domestic and commercial/industrial customers.

The implementation of the reform shall be completed by 31 December 2021.

Reform 3 (C2.1R3): Digital One-Stop Shops to streamline RES projects permitting and to facilitate Energy Renovation in Buildings

The objective of the measure is to promote the implementation of RES projects by streamlining the RES projects permitting process. The reform shall also aim at accelerating the energy renovation of buildings.

The reform shall consist in digitalising the licensing permitting process for RES projects and establishing a single point of contact for technical and financial support for the purposes of energy renovation of buildings.

The implementation of the reform shall be completed by 31 December 2022.

Reform 4 (C2.1R4): Energy Storage Regulatory Framework

The objective of the measure is to establish a regulatory framework for promoting the participation of storage facilities in the electricity market.

The reform shall consist in amending the Transmission and Distribution Rules (TDRs) and the Trading and Settlement Rules (TSRs) to allow storage facilities to participate in the wholesale electricity market. This is expected to promote the generation of electricity from renewable energy systems and to contribute to the efficiency and economic viability of the electricity market as a whole.

The implementation of the reform shall be completed by 31 December 2021.

Investment 1 (C2.1I1): Promoting energy efficiency investments in SMEs and non-profit organisations

The objective of the measure is to reduce the primary and final energy consumption and the CO2 emissions in buildings and/or facilities owned or operated by SMEs and non-profit organisations.

The investment shall consist in providing support for building renovation and for making production processes more efficient through the implementation of at least 275 energy efficiency projects. The grant scheme shall also promote the execution of energy audits, as well as the adoption of digital technologies and the integration of renewables. The investment shall aim at achieving on average at least a 30% primary energy demand reduction.

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 call for proposals for this measure shall reflect that the purchasing of biomass boilers shall comply with the provisions of the Directive 2008/50/EC on ambient air quality and cleaner air for Europe, the Renewable Energy Directive 2018/2001/EU and relevant national legislation on air pollutant emissions.

The implementation of the investment shall be completed by 31 December 2025.

Investment 2 (C2.1I2): Promoting renewables and individual energy efficiency measures in dwellings and tackling energy poverty, including in households with vulnerable electricity consumers

The objective of the measure is to encourage the use of renewable energy sources and energy savings by the large stock of old dwellings, as well as to subsidise the implementation of small-scale energy renovations in households with vulnerable electricity consumers including energy-poor households and people with disabilities.

The investment is composed of two sub-measures: (i) a support scheme for promoting renewables and individual energy efficiency measures in dwellings and (ii) a support scheme for addressing energy poverty in households with vulnerable electricity consumers, including people with disabilities.

Sub-measure 1: promoting renewables and energy efficiency measures in dwellings

The investment shall consist in providing grants to at least 16 200 dwellings (including households of vulnerable electricity consumers) for thermal insulation of roofs and/or for the installation of a photovoltaic system and/or for the installation or replacement of Solar Water Heating (SWH) Systems of an existing dwelling.

The investment shall achieve on average at least a 30% primary energy demand reduction.

Sub-measure 2: addressing energy poverty in households with people with disabilities

The investment shall consist in providing technical support in at least 270 households with people with disabilities with the objective of facilitating their  participation in the aid scheme of sub-measure 1 and to effectively implement the supported small-scale energy renovations. The implementation of the investment shall be completed by 30 June 2026.

Investment 3 (C2.1I3): Encouraging the use of renewables and energy savings by local/wider public authorities and facilitating the transition of local communities towards climate mitigation & adaptation

The objective of the measure is to promote the use of RES and energy savings by the large stock of old infrastructure used by local authorities, as well as to build a pipeline of sustainable energy and climate adaptation investment projects across rural communities in Cyprus.

The investment is composed of two sub-measures: (i) encouraging the use of renewables and energy savings by local/wider public authorities; and (ii) facilitating the transition of local communities towards climate mitigation and adaptation.

Sub-measure 1: Encouraging the use of renewables and energy savings by local/wider public authorities

The sub-measure shall consist in setting up a grant scheme for providing support for large-scale energy efficiency and RES measures in buildings, infrastructure, and social housing targeting local and wider public authorities.

The sub-measure shall lead to a reduction of at least 45% in primary energy consumption per year (11 250 MWh/y) of local and wider public authorities.

Sub-measure 2: Facilitating the transition of local communities towards climate mitigation and adaptation

The sub-measure shall consist in providing technical support to Local (Community) Councils in developing Sustainable Energy and Climate Plans and implementing energy and climate investments, as well as in setting up a grant scheme to support sustainable climate adaptation investments.

The implementation of the investment shall be completed by 30 June 2026.

Investment 4 (C2.1I4): Encourage the reduction of CO2 emissions in businesses

The objective of the measure is to encourage businesses to engage in transformations targeting decarbonisation, starting with the measurement of their greenhouse gas emissions (GHG) and the formulation of action plans to reduce (GHG) emissions in their operations and/ or supply chains (roadmaps to decarbonisation).

The investment consists in setting up a support scheme providing financing for businesses to produce their decarbonisation roadmap to 2030. The scheme aims to support the businesses to measure, verify and monitor their GHG emissions resulting from the activities of their undertaking/s, and set up a GHG emissions reduction action plan containing certain investments/actions towards their decarbonisation until 2030. In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the investments/actions to be included in the supported action plans shall exclude the following list of activities: (i) activities related to fossil fuels, including downstream use; (ii) activities under the EU Emission Trading System (ETS) achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks; (iii) activities related to waste landfills, incinerators and mechanical biological treatment plants; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant EU and national environmental legislation may be selected.

The implementation of the investment shall be completed by 31 December 2024.

Investment 5 (C2.1I5): Energy Efficiency Upgrading of public buildings

The objective of the measure is to facilitate the energy upgrading and increased energy efficiency of selected public buildings, i.e. fire service properties, schools, the Nicosia General Hospital, water treatment plants and water pumping stations.

The investment is composed of three sub-measures: (i) Fire Service Properties and Schools; (ii) Nicosia General Hospital; and (iii) Installation of Grid connected Photovoltaic Energy Systems in Water Treatment Plants and water pumping stations.

Sub-measure 1: Fire Service Properties and Schools

The sub-measure consists in the implementation of energy upgrades in 17 urban and rural fire stations in Cyprus including the Fire Brigade Headquarters. The sub-measure shall also cover the installation of thermal insulation and photovoltaic systems in at least 405 schools.

The investment shall aim at achieving on average at least a 30% primary energy demand reduction.

Sub-measure 2: Nicosia General Hospital

The sub-measure shall consist in the setting up and installation of photovoltaics system at the Nicosia General Hospital of a total capacity of 943 KW.

Sub-measure 3: Water Treatment Plants and water pumping stations

The sub-measure shall consist in the installation of grid connected photovoltaic energy systems of total power of 2 MWp in water treatment plants and water pumping stations.

The implementation of the investment shall be completed by 31 December 2025.

Investment 6 (C2.1I6): Upgrading renewable energy and smart grids testing infrastructure at the University of Cyprus

The objective of the measure is to upgrade the renewable energy and smart grids testing infrastructure at the University of Cyprus and to integrate this infrastructure in the future smart grid.

The investment shall consist in delivery, installation, testing, calibration, commissioning and acceptance of smart grids equipment, followed by final infrastructure integration. The measure shall also include personnel orientation and training.

The implementation of the investment shall be completed by 31 December 2024.

Investment 7 (C2.1I7): Mass installation and operation by the Distribution System Operator (DSO) of Smart Metering Infrastructure (Advanced Metering Infrastructure)

The objective of the measure is to facilitate the mass roll-out of smart meters in Cyprus.

The investment shall consist in the delivery of 400 000 smart meters to the EAC and installation of 250 000 of these to final electricity customers, including natural and legal persons.

The implementation of the investment shall be completed by 30 June 2026.

Investment 8 (C2.1I8): Monitoring and reduction of GHG emissions in agriculture

The objective of the measure is to enhance the monitoring for greenhouse gas emissions from agriculture in Cyprus and contribute to their reduction.

The investment shall consist in the establishment of a GHG monitoring system for agriculture, which shall provide data for the implementation of more efficient mitigation practices and contribute to achieving a 10% reduction of GHG emissions from agriculture by end 2025.

The implementation of the investment shall be completed by 31 December 2025.

Investment 9 (C2.1I9): Forests fire protection

The objective of the measure is to upgrade the capabilities of relevant authorities in Cyprus to cope with fire hazards and to strengthen the protection against the risks faced by citizens, infrastructure and forests.

The investment shall consist in the purchasing of firefighting aircraft, vehicles, equipment and related training and servicing for the period of implementation of the measure. This shall include the supply of the following vehicles, machinery and equipment: 75 transport vehicles for patrol purposes for forest protection and transfer of staff in fire incidents; 12 large fire trucks; 25 emergency firefighting vehicles; four bulldozers for the construction of fire protection works with the possibility of transport by truck for rapid transport to fires; four ground bulldozers for the construction of fire protection works; six agricultural tractors equipped with the necessary tools for the implementation of fire prevention measures; four-wheel excavators / loaders; six branch shredders; four loaders (trucks) and six water tank (trucks) for fire protection purposes; one firefighting aircraft.

The implementation of the investment shall be completed by 30 June 2026.

Investment 10 (C2.1I10): Market Management System (MMS) to facilitate the opening of the electricity market to competition

The objective of the measure is to introduce a Market Management System (MMS) by the Cyprus Transmission System Operator as a tool for facilitating the opening of the electricity market to competition.

The investment shall consist in the installation and finalisation of the MMS, the opening of the competitive Cyprus electricity market with accessibility of the platform granted to target users in full functionality (go-live) and the related training of 100% of the personnel of the Transmission System Operator that shall operate the MMS.

The implementation of the investment shall be completed by 30 September 2025.

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) | | | Indicative timeline for completion | | Description of each milestone and target |
|  |  |  |  |  | Unit of measure | Baseline | Goal | Quarter | Year |  |
| 19 | C2.1R1  Green Taxation | Milestone | Entry into force of a law introducing a carbon tax for fuels, a levy on water and a charge on household/ landfill waste | Provision in the law indicating the entry into force of a law introducing a carbon tax for fuels, a levy on water and a charge on household/ landfill waste | - | - | - | Q1 | 2024 | Entry into force of legislative changes that shall aim at making a tangible contribution to reaching the 2030 target for reducing greenhouse gas emissions. The amendments shall be based on the findings of an independent study to be undertaken. The law shall in particular (a) introduce a carbon tax for fuels used in the sectors of the economy that do not fall under the EU greenhouse gas Emissions Trading System, (b) introduce gradually a levy on water that shall reflect the scarcity of this natural resource and the cost to the environment of its use and (c) introduce of a country wide charge on household/ landfill waste. |
| 20 | C2.1R1  Green Taxation | Milestone | Impact assessment report measuring the reform’s effect on the environment and the economy | Publication of the impact assessment report measuring the reform’s effect on the environment and the economy | - | - | - | Q2 | 2026 | Impact assessment report measuring the reform’s effect on the environment and the economic effect on households and businesses, as well as recommending further tax amendments, as necessary. |
| 21 | C2.1R2  Independence of Cyprus Transmission System Operator (TSOC) from the incumbent Electricity Authority of Cyprus | Milestone | Law for the Regulation of the Electricity Market of 2021 | Provision in the law indicating the entry into force of the 2021 "Law for the Regulation of the Electricity Market" | - | - | - | Q4 | 2021 | Entry into force of the Law for the Regulation of the Electricity Market of 2021, which shall facilitate the opening of the electricity market to competition and boost the uptake of RES by: (a) achieving the independence of the Cyprus Transmission System Operator (TSOC) from the incumbent Electricity Authority of Cyprus (EAC) (autonomy in governance, financial autonomy and independence of TSOC personnel), (b) introducing the necessary steps for reducing the cost of electricity for domestic and commercial/industrial customers and (c) creating conditions of transparency and trust to motivate new investors in generation and supply of electricity. |
| 22 | C2.1R3  Digital One-Stop Shops to streamline RES projects permitting and to facilitate Energy Renovation in Buildings | Milestone | Fully operational IT platform | Fully operational IT platform accepted by the Ministry of Energy, Commerce and Industry | - | - | - | Q4 | 2022 | Fully operational IT platform for (1) guiding the applicant through the administrative permit application process in a transparent manner up to the delivery of one or several decisions by the responsible authorities, (2) providing the applicant with all necessary information and involve, where appropriate, other administrative authorities. |
| 23 | C2.1R4  Energy Storage Regulatory Framework | Milestone | Amendment of the Transmission and Distribution Rules (TDRs) and Trading and Settlement Rules (TSRs) | Publication on the website of the Cyprus Energy Regulatory Authority of Amendment of the Transmission and Distribution Rules (TDRs) and the Trading and Settlement Rules (TSRs) | - | - | - | Q4 | 2021 | Entry into force of an amendment to the Transmission and Distribution Rules (TDRs) and Trading and Settlement Rules (TSRs) which shall provide the necessary regulatory framework (market rules) and technical modalities that shall allow storage facilities to:  - participate in the wholesale electricity market,  - promote the development of an economically viable, efficient, safe and consumer-oriented electricity market that prioritises the generation of electricity from renewable energy systems. |
| 24 | C2.1I1  Promoting energy efficiency investments in SMEs and non-profit organisations | Milestone | Support scheme for Promoting energy efficiency investments in SMEs, municipalities, communities and the wider public sector | Publication of call for proposals for the support scheme for Promoting energy efficiency investments in SMEs, municipalities, communities and the wider public sector | - | - | - | Q4 | 2021 | Issue call for proposals for the support scheme for promoting energy efficiency investments in SMEs, municipalities, communities and the wider public sector, following verification of state aid regulation to be applied by Commissioner for State Aid Control and Council of Ministers’ decision approving the scheme’s objectives. The investment shall aim at achieving on average at least a 30% primary energy demand reduction. |
| 25 | C2.1I1  Promoting energy efficiency investments in SMEs, and non-profit organisations | Target | Entities (SMEs, non-profit organisations) having implemented energy efficiency interventions |  | Number | 0 | 125 | Q4 | 2024 | At least 125 projects (undertaken by SMEs or non-profit organisations) have been implemented through energy efficiency interventions (energy efficiency measures) in buildings or energy efficiency measures related to their production processes with an objective to achieve on average at least a 30% primary energy demand reduction. The projects selected shall be in compliance with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation. |
| 26 | C2.1I1  Promoting energy efficiency investments in SMEs, and non-profit organisations | Target | Entities (SMEs, non-profit organisations) having implemented energy efficiency interventions |  | Number | 125 | 275 | Q4 | 2025 | At least 275 projects (undertaken by SMEs or non-profit organisations) have been implemented through energy efficiency interventions (energy efficiency measures) in buildings or energy efficiency measures related to their production processes with an objective to achieve on average at least a 30% primary energy demand reduction. The projects selected shall be in compliance with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation. |
| 27 | C2.1I2  Promoting renewables and individual energy efficiency measures in dwellings and tackling energy poverty in households with vulnerable electricity consumers | Milestone | First call for proposals for Promoting renewables and individual energy efficiency measures in dwellings | First call for proposals published | - | - | - | Q2 | 2021 | The first call for proposals for promoting renewables and individual energy efficiency measures in dwellings has been published on the RES and Energy Conservation Fund website. The investment shall aim at achieving on average at least a 30% primary energy demand reduction. |
| 28a | C2.1I2  Promoting renewables and individual energy efficiency measures in dwellings and tackling energy poverty in households with vulnerable electricity consumers | Target | Dwellings and households with vulnerable electricity consumers (including people with disabilities) having improved their energy performance | - | Number | 0 | 8 500 | Q4 | 2023 | At least 8 500 dwellings and 600 households with vulnerable electricity consumers (including people with disabilities) have improved their energy performance due to the financial support provided, as well as tailored solutions (support services and energy guidance) for people with disabilities, with an objective to achieve on average at least a 30% primary energy demand reduction. |
| 29a | C2.1I2  Promoting renewables and individual energy efficiency measures in dwellings and tackling energy poverty in households with vulnerable electricity consumers | Target | Dwellings and households with vulnerable electricity consumers (including people with disabilities) having improved their energy performance | - | Number | 8 500 | 16 200 | Q2 | 2026 | At least 16 200 dwellings and 1 600 households with vulnerable electricity consumers (including people with disabilities) have improved their energy performance due to the financial support provided, as well as tailored solutions (support services and energy guidance), with an objective to achieve on average at least a 30% primary energy demand reduction. |
| 30 | C2.1I3  Encouraging the use of renewables and energy savings by local/wider public authorities and facilitating the transition of local communities towards climate mitigation & adaptation | Milestone | First call for proposals to support local authorities in energy efficiency measures | Publish first call for proposals | - | - | - | Q3 | 2021 | The first call for proposals to support local authorities in energy efficiency measures has been published on the RES and Energy Conservation Fund Website. The investment shall aim at achieving on average at least a 30% primary energy demand reduction. |
| 31a | C2.1I3  Encouraging the use of renewables and energy savings by local/wider public authorities and facilitating the transition of local communities towards climate mitigation & adaptation | Target | Investments undertaken by local and wider public authorities that have improved their energy performance | - | MWh per year | 0 | 3600 | Q4 | 2024 | Investments undertaken by local and wider public authorities have improved their energy performance due to the financial support provided and have achieved a primary energy consumption reduction of at least 3600 MWh per year |
| 32a | C2.1I3  Encouraging the use of renewables and energy savings by local/wider public authorities and facilitating the transition of local communities towards climate mitigation & adaptation | Target | Investments undertaken by local authorities that have improved their energy performance | - | MWh per year | 3600 | 11 250 | Q2 | 2026 | Investments undertaken by local and wider public authorities have improved their energy performance due to the financial support provided and have achieved a primary energy consumption reduction of at least 11 250 MWh per year. |
| 32c | C2.1I3  Encouraging the use of renewables and energy savings by local/wider public authorities and facilitating the transition of local communities towards climate mitigation & adaptation | Target | Grant scheme to support sustainable climate adaptation investments in local (Community) Councils | Number | - | 0 | 27 | Q2 | 2026 | At least 27 local communities have been supported to implement climate adaptation investments. |
| 33 | C2.1I4  Encourage the reduction of CO2 emissions in businesses | Target | Undertakings having developed their GHG emissions reduction action plans | - | Number | 0 | 300 | Q4 | 2024 | At least 300 undertakings have developed their GHG emissions reduction action plans, due to the support provided. The action plans formulated shall be in compliance with the ’Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the provision for compliance with the relevant EU and national environmental legislation. |
| 35 | C2.1I5  Energy Efficiency Upgrading of public buildings | Target | Thermal insulation and photovoltaic systems installed in schools | - | Number | 0 | 405 | Q1 | 2022 | Thermal insulation and photovoltaic systems installed in at least 405 schools with an objective to achieve on average at least a 30% primary energy demand reduction. |
| 36 | C2.1I5  Energy Efficiency Upgrading of public buildings | Target | Completion of set up and installation of photovoltaics system at the Nicosia General Hospital | - | Number | 0 | 943 | Q4 | 2023 | Completion of set up and installation of PV system at the Nicosia General Hospital of total capacity of 943 KW. |
| 37 | C2.1I5  Energy Efficiency Upgrading of public buildings | Target | Completion of installation of photovoltaic systems in water pump stations and fire stations | - | Number | 0 | 2 200 | Q4 | 2025 | Completion of installation of photovoltaic systems, of a total capacity of 2 200KW, in water pump stations and fire stations. |
| 38 | C2.1I6  Upgrading renewable energy and smart grids testing infrastructure at the University of Cyprus | Milestone | Signature of contracts for the installation of equipment to upgrade the electricity grid into a smart grid | Contracts Signature | - | - | - | Q4 | 2023 | Signature of contracts for the installation of equipment to upgrade the electricity grid into a smart grid following a successful public procurement procedure. |
| 39 | C2.1I6  Upgrading renewable energy and smart grids testing infrastructure at the University of Cyprus | Milestone | Delivery, successful installation and acceptance of the equipment for smart grids | Issued acceptance report | - | - | - | Q4 | 2024 | Delivery, successful installation, testing, calibration, commissioning and acceptance of the equipment for smart grids, followed by final infrastructure integration. |
| 40 | C2.1I7  Mass installation and operation by the Distribution System Operator (DSO) of Smart Metering Infrastructure (Advanced Metering Infrastructure) | Milestone | Contract Signature for smart electricity metering infrastructure | Contract Signature | - | - | - | Q1 | 2024 | Contract Signature for smart electricity metering infrastructure (Hardware, software and support & other services). |
| 41 | C2.1I7  Mass installation and operation by the Distribution System Operator (DSO) of Smart Metering Infrastructure (Advanced Metering Infrastructure) | Target | Delivery and installation of smart meters | - | Number | 0 | 50 000 delivered to EAC    15 000 installed to final electricity customers | Q3 | 2024 | Delivery and acceptance of at least 50 000 smart electricity meters to EAC and installation of 15 000 of these to final electricity customers, including natural and legal persons. |
| 42 | C2.1I7  Mass installation and operation by the Distribution System Operator (DSO) of Smart Metering Infrastructure (Advanced Metering Infrastructure) | Target | Delivery and installation of smart meters | - | Number | 50 000 delivered to EAC    15 000 installed to final electricity customers | 400 000 delivered to EAC    250 000 installed to final electricity customers | Q2 | 2026 | Delivery and acceptance of 400 000 smart electricity meters to EAC and installation of 250 000 of these to final electricity customers, including natural and legal persons. |
| 43 | C2.1I8  Monitoring and reduction of GHG emissions in agriculture | Milestone | Purchase and installation of monitoring units for measuring GHG emissions from agriculture | Approval of the equipment and installation by the receiving committee | - | - | - | Q2 | 2023 | Purchase and installation of automobile unit and permanent monitoring units, for measuring GHG emissions from agriculture with the objective of implementing adequate policies to mitigate GHG emissions. |
| 44 | C2.1I8  Monitoring and reduction of GHG emissions in agriculture | Target | Reduction of GHG emissions from agriculture | - | % (Percentage) | 0 | 10 | Q4 | 2025 | Achieve a 10% reduction of GHG emissions from agriculture through monitoring GHG emissions and calculation of National Emission Factors for GHG emissions and implementation of Emission Factors through the National Inventory for GHG emissions of the country. Reference total emissions from Agriculture soils based on the National Inventory Report of the country is 122,8 kt CO2 equivalent for 2019. |
| 45 | C2.1I9  Forests fire protection | Milestone | Signing of 8 Agreements/ Contract Signatures for the purchase of vehicles, equipment and provision of services and issue of call for tenders for the purchase of firefighting aircraft | Signing of 8 Agreements/ Contract Signatures | - | - | - | Q2 | 2022 | Signing of 8 Agreements/ Contracts Signatures with suppliers for the purchase of vehicles, equipment and provision of services and issue of call for tenders for the purchase of firefighting aircraft with the objective of contributing to climate change adaptation and to the reduction of the risk of explosion and expansion of forest fire and the strengthening protection against the risks faced by citizens, infrastructure and forests from a possible fire incident. |
| 46 | C2.1I9  Forests fire protection | Milestone | Delivery of firefighting aircraft, vehicles and equipment | Acceptance certificates issued for the delivery of firefighting aircraft, vehicles and equipment | - | - | - | Q4 | 2025 | Delivery and acceptance of firefighting aircraft, vehicles and equipment. |
| 47 | C2.1I9  Forests fire protection | Milestone | Completion of services | Acceptance certificates issued to confirm the acceptance of services | - | - | - | Q2 | 2026 | Completion of the following services: (1) firefighting operations and training of pilot type rating, (2) silvicultural practices and (3) services for 3 unmanned aerial vehicle (UAV) – drones. |
| 48 | C2.1I10  Market Management System (MMS) to facilitate the opening of the electricity market to competition | Milestone | Installation of the Market Management System | Issuing of Final Acceptance Certificate for the Market Management System. | - | - | - | Q1 | 2023 | Installation of the Market Management System (MMS) for the Cyprus Electricity Market. |
| 48a | C2.1I10  Market Management System (MMS) to facilitate the opening of the electricity market to competition | Milestone | Go-live of the MMS and related training of the personnel. | Certification of the MMS by an independent auditor with regards to compliance with the Electricity Market Trading and Settlement Rules (TSR) and evidence on the completion of the first electricity market financial transactions, as a result of the settlements conducted through the MMS. Proof of the training of the personnel on the certified version of the MMS. |  |  |  | Q3 | 2025 | The final trial phase of the MMS is completed, and the Regulator declares commercial market operation with the first financial transactions completed. Furthermore, 100% of the personnel operating the MMS has been trained on the certified version of the MMS. |

B.3. 
   Description of the reforms and investments for the loan

Investment 11 (C2.1I11) Ending energy isolation – Project of Common Interest "EuroAsia Interconnector"

The objective of the measure is to ensure security of supply and more competitive wholesale electricity prices, and to enable the increased use of electricity from cleaner sources, in particular renewables, by connecting the electricity network of Cyprus to the EU continental system.

The investment shall consist in the completion and commissioning of the PCI 3.10.2 Interconnection between Cyprus and Greece, which shall include a DC 1 000 MW converter station in Cyprus and related infrastructure in Cyprus and Crete, connected through 898 km of HVDC submarine cables with 1 000 MW capacity. This is expected to be part of a broader investment building a cross-border interconnector with a total length of 1 208 km between Crete, Cyprus and Israel. Different parts of the project are expected to receive funding from different sources, namely the Recovery and Resilience Facility, the Connecting Europe Facility, a loan from the European Investment Bank, commercial loans and equity.

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 mitigating measures targeting the conservation of the marine environment shall be duly respected during the implementation of the project as set out in the Environmental Impact Assessment and the building permit. Any measures identified in the framework of the EIA and the assessment under Directive 2000/60/EC as necessary to ensure compliance with the DNSH Technical Guidance (2021/C58/01) shall be integrated into the project and complied with at the stages of construction, operation and decommissioning of the infrastructure.

The implementation of the investment shall be completed by 31 December 2025.

B.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 |  |
| 49 | C2.1I11  Ending energy isolation - Project of Common Interest "EuroAsia Interconnector" | Milestone | Start of the construction works of the HVDC Converter Station in Kofinou and the onshore infrastructure in Cyprus | Signed agreement for the construction of Kofinou Converter Station | - | - | - | Q4 | 2022 | Start of the construction works of the HVDC Converter Station in Kofinou and the onshore infrastructure in Cyprus following the securing of relevant funding sources outside of the RRF. |
| 50 | C2.1I11  Ending energy isolation - Project of Common Interest "EuroAsia Interconnector" | Milestone | Completion of construction of converter station | Issuance of the taking over certificate for the construction of converter station | - | - | - | Q4 | 2024 | Completion of construction of converter station including installation of high-voltage and control-equipment |
| 51 | C2.1I11  Ending energy isolation - Project of Common Interest "EuroAsia Interconnector" | Milestone | Completed and fully operational facility of the electricity interconnection between Cyprus-Crete (Greece) | Deliverables acceptance team signs off the operational efficiency of the project;  public announcement of the start of operation of the interconnector | - | - | - | Q4 | 2025 | Completed and fully operational facility of the electricity interconnection between Cyprus-Crete (Greece) to: (1) end the energy isolation of Cyprus as an EU member state and (2) ensure the security of energy supply (3) achieve national climate targets as specified in the National Climate Plan |

C. COMPONENT 2.2: Sustainable Transport

This component of the Cyprus recovery and resilience plan aims at promoting cleaner, smarter, safer and fairer urban mobility by encouraging a modal shift from private cars to more sustainable modes of transport such as public transport, cycling, walking, and to promote the use of zero or low-emission vehicles (LEVs) as well as the use of digital systems in the transport sector.

The component addresses the country-specific recommendations on investment in sustainable transport (Country-Specific Recommendation 4 of 2019 and Country-Specific Recommendation 3 of 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).

C.1. 
   Description of the reforms and investments for non-repayable financial support

Reform 1 (C2.2R1): Establishment of an Intelligent Transport System using Digital Twin technologies

The objective of the measure is to enhance technological infrastructure, to enable better and more efficient monitoring of the infrastructure and to introduce smart features to it.

The reform consists in developing and implementing an Intelligent Transport System in order to improve the mobility management in urban areas and the Cyprus TEN-T network, also by improving the cooperation between various stakeholders. The reform shall include the delivery, installation and connection to the National Access Point of 300 sensors. This equipment is expected to constitute the basis for the digitalisation of the physical mobility networks in a geographical information system (GIS) database and the integration of mobility services.

The implementation of the reform shall be completed by 31 December 2025.

Reform 2 (C2.2R2): Provide the regulatory framework for an interoperable and effective electric vehicle (EV) recharging infrastructure and an efficient EV recharging market

The objective of the measure is to facilitate the creation of an efficient electro-mobility infrastructure for recharging EVs.

The reform consists in the entry into force of legislation on recharging infrastructure for EV. The reform aims at creating a mechanism for (i) implementation and monitoring of the recharging market for EV and (ii) coordinating data analysis allowing for the effective network monitoring as well as for ensuring compliance with national and EU law.

The implementation of the reform shall be completed by 31 December 2024.

Reform 3 (C2.2R3): Progressively phase out the most polluting vehicles, especially in polluted urban areas

The objective of the reform is to provide the regulatory framework to create impetus for replacing old and polluting rolling stock, and to provide incentives for using sustainable commuting and mobility solutions.

This reform shall set up the legal framework allowing the implementation of measures aiming at the exclusion of polluting vehicles from key areas, such as no-emission zones, levies for the circulation of vehicles in certain areas, and compulsory use of EV in certain transport operations. The reform is supported by Investment 3 (Promote widespread use of EV, LEVs and alternative means of transport).

The implementation of the reform shall be completed by 31 December 2025.

Investment 1 (C2.2I1): Implementation of Sustainable Urban Mobility Projects (SUMP) and accessibility-enhancing measures

The objectives of the measures are to create the necessary infrastructure to enhance urban mobility with more environmentally friendly options, improve the city environment and road safety in Limassol and Larnaca. The investment shall also include measures to enhance the accessibility and safe movement of pedestrians, cyclists and persons with disabilities in all urban centres.

More specifically, the investment consists in the introduction of cycle ways, bus lanes and the relevant ITS equipment (i.e. smart traffic light system with bus priority system), as well as the introduction of cycle stands, bus shelters and improvement of road safety conditions at selected junctions. It also includes the creation of Park & Ride stations and the relevant ITS equipment as well as upgrades on existing road network in the urban centres (such as walkways, crossings for pedestrians, cyclists and/or people with disabilities, warning systems for the visually impaired, bicycle parking hubs, walkway ramps).

The implementation of the investment shall be completed by 31 March 2026.

Investment 2 (C2.2I2): Creation of electro-mobility infrastructure

The objectives of the measures are to create the necessary infrastructure to facilitate the transition to electro-mobility and to contribute to the deployment of charging points.

The investment is composed of three sub-measures: (i) the installation of publicly accessible EV fast charging stations; (ii) a grant scheme for the installation of publicly accessible charging points on the premises of businesses and local authorities; and (iii) a grant scheme for charging EV from Renewable Energy Sources (RES).

Sub-measure 1: the installation of publicly accessible fast charging stations for EV

The investment consists in the installation of 10 fast charging stations as a demonstration project for the promotion of electro-mobility. It shall provide access to fast recharging infrastructure for EVs and therefore it is expected to contribute to removing consumer inhibitions concerning EV autonomy. The 10 fast charging stations shall be placed in publicly accessible areas such as hospitals, large publicly accessible parking places or outside public services buildings (such as Ministries or Courts).

Sub-measure 2: a grant scheme for the installation of publicly accessible charging points in the premises of businesses and local authorities

The scheme shall promote the installation of charging points in publicly accessible areas owned by businesses or local authorities.

Sub-measure 3: a grant scheme for charging EVs from RES

The scheme shall provide financial incentives to promote the development of the necessary infrastructure for electro-mobility especially through the charging of EVs from RES. The grant scheme shall include the installation of photovoltaic systems and charging equipment in dwellings for the charging of electric private vehicles and the financing of local/public authorities for the construction of public charging points for EVs. The electricity for the public charging points is expected to be generated in large part from RES.

The implementation of the investment shall be completed by 30 June 2026.

Investment 3 (C2.2I3): Promote widespread use of Electric Vehicles (EVs)

The objective of the measure is to promote the purchase of EVs, LEVs (i.e. a car emitting less than 50 g/km of CO2), electric bicycles and public or non-motorised modes of transport (such as bus, bicycle), while simultaneously gradually removing older polluting vehicles from circulation. The investment is expected to complement Reform 3 (Progressively phase out the most polluting vehicles, especially in polluted areas).

The investment is composed of three sub-measures: (i) kick-start the transition to electro-mobility in the government sector; (ii) a support scheme for the purchase of EV; and (iii) a scrapping scheme for the most polluting vehicles combined with incentives for non/low emission mobility options.

Sub-measure 1: kick-start the transition to electro-mobility in the government sector

The investment includes measures aiming to kick-start the gradual replacement of government conventional vehicle fleet with electric vehicles and promote the transition to electro-mobility. It shall include the purchase of 100 electric vehicles for the needs of the general government and the installation of the relevant charging points on government premises.

This is expected to serve as a demonstration project for the promotion of electro-mobility to the wider public.

Sub-measure 2: a support scheme for the purchase of EVs

The scheme shall provide incentives, by means of grant, for the purchase and registration of EVs and the purchase of electric bicycles. It is directly linked to Reform 3, “Progressively phase out the most polluting vehicles, especially in polluted urban areas”, as a parallel, supportive and complementary measure.

Sub-measure 3: a scrapping scheme for the most polluting vehicles combined with incentives for non/low emission mobility options

The scheme shall incentivise motorists to give up older and more pollutant vehicles in exchange for alternative mobility options, such as the purchase of a LEV or of an electric bicycle and/or free annual bus tickets. The removal of older vehicles is expected to contribute to the reduction of greenhouse gas (GHG) emission from transport, as well as to the mitigation of its impact on air, water, soil and noise pollution. The scrapped vehicles shall be recycled, by licensed recyclers. Priority shall be given to the oldest vehicles to be scrapped.

The implementation of 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 |  |
| 52 | C2.2R1  Establishment of an Intelligent Transport System using Digital Twin technologies | Target | Delivery and installation of at least 150 sensors | - | Number | 0 | 150 | Q1 | 2024 | Delivery, installation and connection to the National Access Point of at least 150 traffic sensors to digitalise the networks and support the development of an Intelligent Transportation System. |
| 53 | C2.2R1  Establishment of an Intelligent Transport System using Digital Twin technologies | Target | Delivery and installation of a total of 300 sensors | - | Number | 150 | 300 | Q4 | 2025 | Delivery, installation and connection to the National Access Point of a total of 300 traffic sensors to digitalise the networks and support the development of an Intelligent Transportation System. |
| 54 | C2.2R2  Provide the regulatory framework for an interoperable and effective electric vehicle (EV) recharging infrastructure and an efficient EV recharging market | Milestone | Entry into force of legislation related to electric vehicle charging points | Provision in the law indicating the entry into force of the legislation | - | - | - | Q4 | 2024 | Entry into force of legislation regarding electric vehicle (EV) recharging infrastructure and an efficient EV recharging market.  The regulatory framework shall promote: (1) a mechanism for implementation and monitoring of the recharging market of electric vehicles; and (2) a coordinated analysis of data allowing for effective network monitoring as well as for ensuring compliance with national and EU legislation. |
| 55 | C2.2R3  Progressively phase out the most polluting vehicles, especially in polluted urban areas | Milestone | Entry into force of the legislative/administrative acts related to the phasing out of the most polluting vehicles | Provision in the legislative/administrative acts indicating the entry into force of the legislation | - | - | - | Q4 | 2023 | Entry into force of legislative/administrative acts regarding the exclusion of polluting vehicles from key areas/operations.  The legislative/administrative acts shall create the legal basis to enforce the adoption of restrictive measures related to the circulation of motor vehicles, with the aim to progressively phase out the most polluting vehicles. |
| 56 | C2.2R3  Progressively phase out the most polluting vehicles, especially in polluted urban areas | Milestone | Implementation of at least two measures aiming at the exclusion of polluting vehicles | Implementation of two measures | - | - | - | Q4 | 2025 | At least two measures are effective aiming at the exclusion of polluting vehicles from key areas/operations, such as no-emission zones, applying levies for the circulation of vehicles in certain areas, applying compulsory measures for use of electric vehicles in certain transport operations, or equivalent measures. |
| 57 | C2.2I1  Implementation of Sustainable Urban Mobility Projects (SUMP) and accessibility enhancing measures | Milestone | Contracts signature for the construction work of sustainable transport infrastructure and ancillary installations | Signed contracts | - | - | - | Q2 | 2024 | Signature of contracts for (1) the construction of cycle ways, bus lanes and park & ride stations of the Sustainable Urban Mobility Projects (SUMP) and (2) the provision of ancillary installations related to sustainable transport, including bicycle-parking facilities and crossings for pedestrians, cyclists and/or people with disabilities. |
| 58 | C2.2I1  Implementation of Sustainable Urban Mobility Projects (SUMP) and accessibility enhancing measures | Target | Completion of construction work for at least 52km of sustainable transport routes | - | Number | 0 | 52 | Q1 | 2026 | Completion of construction work for at least 52km of sustainable transport routes, including at least 33km of cycle ways, at least 11km of bus lanes and at least 8km of walkways. |
| 59 | C2.2I1  Implementation of Sustainable Urban Mobility Projects (SUMP) and accessibility enhancing measures | Target | Completion of construction work for at least 644 ancillary installations related to sustainable transport | - | Number | 0 | 644 | Q1 | 2026 | Completion of construction work for at least 644 ancillary installations related to sustainable transport, including at least 4 park & ride stations, at least 40 crossings, at least 300 ramps, at least 300 bicycle-parking hubs. |
| 60 | C2.2I2  Creation of electro-mobility infrastructure | Target | Installation of at least 330 charging points, due to the support granted | - | Number | 0 | 330 | Q4 | 2024 | Due to the support granted by the support scheme, at least 330 charging points have been purchased and installed in public buildings, local authorities, businesses and/or private households. |
| 61 | C2.2I2  Creation of electro-mobility infrastructure | Target | Installation of at least 1 200 charging points, due to the support granted | - | Number | 330 | 1 200 | Q2 | 2026 | Due to the support granted by the support scheme, at least 1 200 charging points have been purchased and installed in public buildings, local authorities, businesses and/or private households. |
| 62a | C2.2I3  Promote widespread use of Electric Vehicles (EVs) | Target | Purchase of electric vehicles, electric bicycles, due to the support granted | - | Number | 0 | 1523 | Q4 | 2024 | Due to the support granted by the support scheme and the public procurement, at least 1523 electric vehicles of categories M1, M2-3, N, L1e-L7e and bicycles have been purchased. |
| 63a | C2.2I3  Promote widespread use of Electric Vehicles (EVs) | Target | Purchase of electric vehicles, electric bicycles, due to the support granted | - | Number | 1523 | 4335 | Q2 | 2026 | Due to the support granted by the support scheme and the public procurement, at least 4335 electric vehicles of categories M1, M2-3, N, L1e-L7e and bicycles have been purchased. |
| 64 | C2.2I3  Promote widespread use of Electric Vehicles (EVs) | Target | Scrapping of high emission vehicles, due to the support granted | - | Number | 0 | 1 000 | Q4 | 2024 | Due to the support granted by the support scheme, at least 1 000 high emission vehicles have been scrapped and replaced by electric bicycles, annual bus tickets and no- or low-emission or vehicles (below 50g CO2/km). |
| 65 | C2.2I3  Promote widespread use of Electric Vehicles (EVs) | Target | Scrapping of high emission vehicles, due to the support granted | - | Number | 1 000 | 1 950 | Q2 | 2026 | Due to the support granted by the support scheme, at least 1 950 high emission vehicles scrapped and replaced by electric bicycles, annual bus ticket(s) and low emission vehicles (below 50g CO2/km). |

D. COMPONENT 2.3: Smart and Sustainable Water Management

This component of the Cypriot recovery and resilience plan addresses inefficiencies in water management. The objectives of this component are to ensure adequate and uninterrupted supply of good quality drinking water, maximising the infrastructure for sewerage collection systems, sewerage treatment and reuse of treated effluent in agriculture; reducing water loss, non-revenue water and groundwater abstraction, improving anti-flood infrastructure, improving operational efficiency of the services being provided to the consumers through technological advances and establishing transparency in financial transactions.

The component addresses the Country Specific Recommendation on water management (Country-Specific Recommendation 3 of 2020 and Country-Specific Recommendation 4 of 2019).

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).

D.1. 
   Description of the reforms and investments for non-repayable financial support

Reform 1 (C2.3R1): Water Resource Management Reform

The objective of the measure is to define actions addressing structural weaknesses in the water resource management in Cyprus and improving its efficiency and sustainability.

The reform consists of the establishment of a high-level Working Party (the “Working Party”) led by the Ministry of Agriculture, Rural Development and Environment with participants from the Ministry of Interior, Ministry of Finance, Directorate General for European Programmes, Coordination and Development and all Water and Sewerage Boards as well as Local Administration coordinative bodies to represent all stakeholders in national water management. The Working Party shall serve as the body for cooperation between the various water management authorities and as a coordination and monitoring body for the implementation of the investments and actions to be proposed. The Working Party shall propose an action plan with the necessary regulatory and adaptation measures to be implemented within the next 10 to 15 years. The objectives of the suggested action plan shall be (i) to increase operational efficiency through mergers of District Water & Sewerage Boards, (ii) to reduce non-revenue water, (iii) to improve water use, and (iv) to enhance the safety and sustainable operation of the infrastructures of the Water Development Department. The Working Party shall coordinate and monitor the implementation of the action plan and shall provide the necessary technical assistance to the relevant water management authorities for carrying out the reform measures as well as the investments included in the component.

The implementation of the reform shall be completed by 30 June 2025.

Investment 1 (C2.3I1): Choirokitia‑Famagusta Conveyor Replacement

The objectives of the measure are to enhance water supply security through an improved conveyor infrastructure with increased capacity of the duct between key water sources (such as water treatment plants) and consumption areas. The investment shall also contribute to minimising water losses and the occurrence of failures, improving water quality by mixing desalinated and refined water before it reaches the final consumers, and achieving energy savings through reduced water pumping.

The measure consists of the construction of a replacement of the existing water conveyor. The project shall include conducting topographical studies and environmental impact assessments. Following the aforementioned preliminary steps and the issuance of the necessary permits, the Water Development Department shall assign the construction works to a contractor who shall be selected via public procurement procedures to carry out the works.

The implementation of the investment shall be completed by 30 June 2026.

Investment 2 (C2.3I2): Water Treatment Plants: upgrade for water quality improvement

The objectives of the measure are to improve water quality, reduce energy consumption and the cost of drinking water production by limiting the need for water desalination, as well as decrease disruptions to the supply and distribution of water.

The measure consists of refurbishing the Water Treatment Plants of Limassol, Asprokremmos, Tersefanou, Kornos and Kannaviou. This shall include replacing the existing chlorination infrastructure for these five Water Treatment Plants, installing activated carbon polishing units for Limassol, Asprokremmos and Tersefanou Water Treatment Plants, extending the capacity of Asprokremmos Water Treatment Plant by 10 000 m3/day and upgrading the monitoring and control system as well as its automation system.

The implementation of the investment shall be completed by 31 December 2025.

Investment 3 (C2.3I3): Integrated Monitoring and Control Management System for the Water Development Department’s infrastructure

The objective of the measure is to improve the water resource management efficiency and increase the operational capacity of the competent authorities. The measure aims to reduce the risk of business disruption by securing the various systems against cyber- and physical attacks, to reduce energy consumption and GHG emissions by increasing efficiency, to reduce non-revenue water in irrigation by improving infrastructure and monitoring capacity and to reduce the high-impact risk of contamination events and the impact of prolonged drought events by closely managing water resources and forecasting.

The measure consists of creating an integrated platform that shall be composed of a number of subsystems where each of them shall address key challenges, including water quality, flood management, water demand management and water allocation for irrigation purposes, energy efficiency as well as cyber- and physical security. The implementation of the measures shall include: (i) the installation of 500 hydraulic and quality sensors in all the lakes, reservoirs, rivers, as well as in the water transport network, up to the level of the communities; (ii) the installation of energy meters to monitor the energy consumption of pumping stations that shall be transmitted and stored in a database; (iii) a software platform linked with intelligent analytics and methods to help the decision-making process in relation to the production of water from different sources (desalination and treatment of water from reservoirs) taking into account security of water supply, cost of water production across different systems and drought forecasts. In addition, the measure shall address cyber- and physical security challenges through tools for enhancing the protection of ICT systems. The project shall be implemented by the following sequence of actions: detailed requirement analysis with the help of specialised consultants; procurement and installation of equipment; and implementation, assessment and commissioning of the IT sub-systems.

The implementation of the investment shall be completed by 30 June 2026.

Investment 4 (C2.3I4): Smart Water and Sewerage Networks Management

The objective of the measure is to enhance operational and energy efficiency through the digitalisation of Larnaca Sewerage and Drainage Board, Larnaca Water Board and Water Board of Limassol, notably the upgrading of the organisations’ operation and services and integrating the IT systems currently used into a unified system to operate under cloud services.

The measure consists of a series of smart and digital upgrades in each of the three organisations: (i) The Larnaca Sewerage and Drainage Board shall take measures to reduce the energy consumption of the Larnaca Wastewater Treatment Plant through solar and biogas solutions. (ii) The Larnaca Water Board shall install water quality and pressure sensors in its distribution networks and is thus expected to replace at least 50% of its conventional consumer meters with smart meters. Moreover, it shall develop a Digital Twin decision support tool and a data bank. These systems shall draw information from the installed sensors, smart water meters and existing systems to be combined to accurately estimate water flow, pressure and quality of water for the timely detection of events. (iii) The Water Board of Limassol shall replace conventional consumer meters with automated smart meters and install pressure and quality sensors for infrastructure monitoring and development of innovative customer services, such as early warning in the case of a leakage. Furthermore, it is expected to design a customised software integrating all its operations and to support data-driven decision making.

The implementation of the investment shall be completed by 30 June 2026.

Investment 5 (C2.3I5): Anti-flood and water collection measures

The objective of the measure is to mitigate the negative effects on human health, the environment, cultural sites and income from flooding events through managing flood risk. A specific objective resulting from the actions to be implemented is the reduction of erosion from extreme runoffs, both in agricultural and urban areas.

The measure consists of a series of anti-flood and water collection measures. The works shall concentrate in three areas, namely Livadia, Kladeri and the centre of Nicosia, as follows: (i) In Livadia, the Municipality of Larnaca shall upgrade and embellish flood channels, through improvements to the riverbed and riverbanks. (ii) In Kladeri area, the Municipality of Ypsonas shall construct a complete rainwater collection network of 4 600 meters in length to cover the area ending in 35 absorption pits. (iii) In Nicosia, the Municipality of Nicosia has already selected eight areas where a complete sewer system shall be constructed. The works shall include the reconstruction of streets and pavements and the expansion of the rainwater network.

The implementation of the investment shall be completed by 31 December 2025.

Investment 6 (C2.3I6): Enhance water security for Nicosia and Larnaca regions

The objective of the measure is to increase the water adequacy for the needs of Nicosia and Larnaca Water Boards.

The measure foresees the construction of three new generation Glass Lined Steel (GLS) water reservoirs of 26 000 m3 in total in Nicosia Region and the construction of a 10 000 m3 water reservoir in a specific designated area at Klavdia, Larnaca.

The implementation of the investment shall be completed by 30 June 2025.

Investment 8 (C2.3I8) Protection of the marine ecosystem from hazards through oil spills

The objective of the measure is to protect marine ecosystems through an upgrade of the operational capacity of the Department of Fisheries and Marine Research to respond promptly, adequately and effectively to incidents from oil pollution to marine pollution.

The measure consists of the purchase of three antipollution vessels with the possibility of autonomous oil recovery operations, two of which shall operate close to the shoreline and the larger one on the high seas, as well as the purchase of two autonomous oil dispersant air spraying units.

The implementation of the investment shall be completed by 31 December 2025.

D.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 |  |
| 66 | C2.3R1  Water Resource Management Reform | Milestone | Adoption of an action plan on water resource management | Publication of the action plan on the website of the Ministry of Agriculture, Rural Development and Environment | - | - | - | Q2 | 2025 | Adoption of an action plan on water resource management with regulatory and adaptation measures. The objectives of the suggested action plan shall be: (1) to assist the merging of District Water & Sewerage Boards, (2) to reduce Non-Revenue Water (3) to improve water use and (4) to enhance the safety and sustainable operation of Water Development Department's infrastructures. |
| 67 | C2.3I1  Choirokitia‐Famagusta Conveyor Replacement | Milestone | Preparation of tender documents and issue call for tenders | Published call for tender for the conveyor replacement works | - | - | - | Q3 | 2023 | Preparation of tender documents and issue of call for tenders following the completion of detailed design of the Choirokitia-Famagusta Conveyor replacement, including bill of quantities by quantity surveyor, topography, permits, other technical and environmental studies and licencing. Completed environmental impact assessment on the Environment from Projects Law (127(I)/2018) / Public Procurement procedures (Law 73(I)/2016). |
| 68 | C2.3I1  Choirokitia‐Famagusta Conveyor Replacement | Target | Installation of new pipeline with total length of 20km |  | Number | 0 | 20 | Q2 | 2026 | Completion of the construction and installation of a new pipeline with total length of 20km and operation of the equipment. A qualified engineering bureau shall verify the executed work. |
| 69a | C2.3I2  Water Treatment Plants: upgrade for water quality improvement | Milestone | Completion of the works for the installation of activated carbon polishing units in Tersefanou, Asprokremmos and Limassol Water Treatment Plants | Issued certificates by the project engineer for each of the three contracts | - | - | - | Q1 | 2024 | Completion of the works for installation of activated carbon polishing units of  a) 30 000 m3/day capacity for Tersefanou Water Treatment Plant;  b) 30 000 m3/day capacity for Asprokremmos Water Treatment Plant; and  c) 20 000 m3/day capacity for Limassol Water Treatment Plant. |
| 69b | C2.3I2  Water Treatment Plants: upgrade for water quality improvement | Milestone | Completion of the works for the replacement of the chlorination infrastructure for the five WTPs | Completion by the project engineer of the works | - | - | - | Q1 | 2025 | Completion of the works for the replacement of the chlorination infrastructure for the Water Treatment Plants of Limassol, Asprokremmos, Tersefanou, Kornos and Kannaviou. |
| 70 | C2.3I2  Water Treatment Plants: upgrade for water quality improvement | Target | Completion of extension works and automation system at Asprokremmos Water Treatment Plant |  | Number | 0 | 10 000 | Q4 | 2025 | Completion of works resulting in the extension of the capacity of Asprokremmos Water Treatment Plant by 10 000 m3/day, including upgrading the monitoring and control system and also the automation system. |
| 71 | C2.3I3  Integrated Monitoring and Control Management System for the Water Development Department’s infrastructure | Milestone | Completion of the detailed requirements analysis and system design document | Approval of detailed requirements analysis and system design document by the Steering Committee of the Water Development Department | - | - | - | Q2 | 2022 | The requirements analysis and system design document shall describe all the aspects, features and functionalities of the system, including: quality sensors, operational sensors (such as flow, level and pressure), energy meters, communications devices, IT equipment (hardware, software). The detailed requirements analysis and system design shall determine the exact number and type of equipment required for this project. |
| 72 | C2.3I3  Integrated Monitoring and Control Management System for the Water Development Department’s infrastructure | Target | Delivery and installation of at least 50% of the equipment |  | % Percentage | 0 | 50 | Q1 | 2024 | Delivery and installation of at least 50% of the total number of units that are prescribed in the Detailed Requirements analysis and system design (quality sensors, communication devises and quality meters). |
| 73 | C2.3I3  Integrated Monitoring and Control Management System for the Water Development Department’s infrastructure | Milestone | Completion of a fully functional Integrated Monitoring and Control Water Management System | Water Development Department project implementation team and responsible officer approves the operation and functionality of the entire system | - | - | - | Q2 | 2026 | Completion of the Integrated Monitoring and Control Management System, which shall include verification that the system is capable of detecting, at an early stage, events that require immediate actions from the Water Development Department’s personnel. The system shall be able to respond automatically to certain events and at the same time alert operators and/or the public. The system shall be capable of collecting and analysing a large amount of data that may be used for forecasting and to aid in decision making. |
| 74a | C2.3I4  Smart Water and Sewerage Networks Management | Target | Delivery and installation of photovoltaics at the Larnaca Wastewater Treatment Plant |  | Number | 0 | 700 | Q1 | 2023 | Delivery and installation of photovoltaic equipment at the Larnaca Wastewater Treatment Plant generating power of at least 700KW. |
| 74b | C2.3I4  Smart Water and Sewerage Networks Management | Target | Delivery and installation of biogas unit at the Larnaca Wastewater Treatment Plant |  | Number | 0 | 90 | Q2 | 2026 | Delivery and installation of biogas unit at the Larnaca Wastewater Treatment Plant generating power of at least 90KW. |
| 75 | C2.3I4  Smart Water and Sewerage Networks Management | Target | Delivery and installation of at least 200 quality and pressure sensors |  | Number | 0 | 200 | Q4 | 2024 | Delivery and installation of at least 200 quality and pressure sensors in the Larnaca and Limassol water networks. |
| 76a | C2.3I4  Smart Water and Sewerage Networks Management | Target | Installation and operation of at least 100 000 smart meters |  | Number | 0 | 100 000 | Q2 | 2026 | At least 100 000 smart meters in operation (delivering consumption readings) and a complete smart water metering system, monitoring system, as well as installed and operational control and support systems in Larnaca and Limassol. |
| 76b | C2.3I4  Smart Water and Sewerage Networks Management | Target | Development of Digital Twin decision support tool and data bank in Larnaca and design of a customised software solution in Limassol |  | Number | 0 | 2 | Q2 | 2026 | The Digital Twin decision support tool and data bank in Larnaca are developed and operational; a customised software solution integrating all its operations and supporting data-driven decision making in Limassol is designed. |
| 77a | C2.3I5  Anti-flood and water collection measures | Milestone | Completion of construction works of drainage network and reconstruction of streets and pavements in areas of Nicosia | Project management team certifies the completion of the construction | - | - | - | Q4 | 2022 | Completion of construction of drainage network and reconstruction of streets and pavements in Agios Antonios, Old city, Likavitos and Agioi Omologites areas of Nicosia with a total length of approx. 6.5km. |
| 77b | C2.3I5  Anti-flood and water collection measures | Milestone | Completion of construction works of drainage network and reconstruction of streets and pavements in areas of Nicosia | Project management team certifies the completion of the construction | - | - | - | Q4 | 2025 | Completion of construction of drainage network and reconstruction of streets and pavements in remaining four areas of Palouriotissa, Trypiotis Agioi Omologites and in the Nicosia city. |
| 78 | C2.3I5  Anti-flood and water collection measures | Milestone | Completion of construction works for the rainwater collection and recycling system in Kladeri area |  | - | - | - | Q2 | 2024 | Completion of construction of the rainwater collection and recycling system covering a total water collection system area of 4,5km in Kladeri area. |
| 79 | C2.3I5  Anti-flood and water collection measures | Milestone | Completion of construction works for the flood channel in Livadia | Project management team certifies the completion of the construction |  |  |  | Q4 | 2025 | Completion of construction works for the flood channel with a total capacity of approx. 30 000m3 in Livadia. |
| 80 | C2.3I6  Enhance water security for Nicosia and Larnaca regions | Target | Completion of construction of two glass lined steel reservoirs |  | Number | 0 | 16 000 | Q2 | 2024 | Completion of construction of two glass lined steel reservoirs of a total capacity of 16 000m3. |
| 81 | C2.3I6  Enhance water security for Nicosia and Larnaca regions | Target | Completion of construction of three glass lined steel reservoirs and 1 concrete water reservoir |  | Number | 16 000 | 36 000 | Q2 | 2025 | Completion of construction of three glass lined steel reservoirs and one concrete water reservoir of a total capacity of 36 000m³. |
| 84 | C2.3I8  Protection of the marine ecosystem from hazards through oil spills | Milestone | Delivery, quality inspection to verify their operational effectiveness and acceptance of three vessels and two aerial spraying systems | Expert’s reporting and issuance of quality certificate of the operational effectiveness and acceptance of vessels and aerial spraying systems | - | - | - | Q1 | 2025 | Delivery, quality inspection to verify their operational effectiveness and acceptance of three vessels (one vessel of 25m in length approximately to operate within the Cypriot Exclusive Economic Zone and two vessels of 8-11m in length approximately to operate within coastal waters and two aerial spraying systems. |

E. COMPONENT 3.1: New growth model and diversification of the economy

The component addresses the challenges of the Cypriot economy with regards to competitiveness, productivity and investment, as well as overreliance on certain economic sectors, such as tourism.

The objective of the component is to help the economy to transit to a new economic growth model (Sustainable Business and Trade Centre of Europe) by addressing sectoral challenges as follows:

Primary Sector: the objective is to develop a competitive agriculture sector primarily through agri-tech and strong collaboration with business, higher-education institutions and research centres to excel.

Secondary Sector: the objective is to develop a competitive light manufacturing sector that includes a focus on areas such as green-tech and agri-tech.

Sustainable Tourism: the objective is to develop a strong agri-tourism and sustainable hospitality infrastructure and attracting health & wellness tourists through competitive and reputable healthcare.

Circular economy (with emphasis on waste management): the objective is to help move towards a circular economy by making better use of raw materials, reducing waste, raising awareness for sustainable development and switching to renewable energy in order to mitigate the climate crisis, protect social well-being and build a resilient economy. The component contributes to addressing the country specific recommendation related to “focus investment on the green and digital transition” and “on waste and water management” (Country-Specific Recommendation 3 of 2020), “focus investment-related economic policy on sustainable transport, environment” and “on environment, in particular waste and water management” (Country-Specific Recommendation 4 of 2019)

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).

E.1. 
   Description of the reforms and investments for non-repayable financial support

Sub-Component 3.1.1 Resilient and competitive primary sector

Reform 1 (C3.1R1): Move agricultural practices from the 20th century to the 21st century by investing in a national centre for excellence in agri-tech

The objective of the reform is to address challenges in the primary sector, including low productivity and lack of technological knowledge, by establishing a centralised operating model through strong collaboration between the Agricultural Research Institute and higher education institution(s).

The reform aims to establish Cyprus’s Agricultural Research Institute as the country’s centre of excellence in agriculture, animal husbandry and environmental protection and to strengthen the cooperation between the Agricultural Research Institute and higher education institution(s) to develop new curriculum.

The implementation of the reform shall be completed by 30 June 2023.

Reform 2 (C3.1R2): On-line platform for improving the trade and information symmetry in the fresh produce supply chain

The objectives of the reform are to address long-standing drawbacks of the fresh produce supply chain, especially regarding traceability, market price distortions and the information asymmetry, which weakens producers’ position in the market.

The reform shall consist of a new law on unfair practices in transactions in the local fresh produce market. A Platform customised to Cyprus’ market specificities shall be offered to the Producers’ Organisations to kick start their cooperation.

The implementation of the reform shall be completed by 30 June 2026.

Reform 3 (C3.1R3): Genetic improvement of the Cyprus sheep and goat population

The objective of the reform is to enhance the productivity and sustainability of the primary sector through the promotion of agro-technology, advanced reproduction and genomic improvement of sheep and goats to optimise the production of dairy products.

The reform shall consist of support to the sheep and goat farmers to upgrade their record keeping on farm, their production processes, product quality evaluation efforts and participation in the nationally funded AGRICYGEN project, which shall provide them with advanced knowledge and guidance on the genetic merit of their animals. This shall allow farmers to make informed decisions on animal reproduction to improve productivity, primarily in terms of milk production.

The implementation of the reform shall be completed by 30 June 2026.

Investment 2 (C3.1I2): Enhancing the existing isotopic databases of Cypriot local traditional food/drinks, by developing a Block Chain platform, to ensure their identity

The objective of the measure is to develop a mechanism and a fit for purpose verification methodology for the authentication of Cypriot products as well as of European food in general, by using stable isotopic databases, thus utilising research and technology. In particular, the measure shall develop a verification methodology for at least three areas of authenticity (dairy products, honey and spirits) that are significantly affected by adulteration and fraud.

The investment shall consist in the establishment of a network of expertise that shall inform regulatory and production stakeholders about food authenticity issues and problems, existing datasets, available methodology and secure sharing of data and information. Also, it shall develop fit for purpose verification methodology for at least three areas of authenticity (dairy products, honey and spirits) that are significantly affected by adulteration and fraud. Moreover, it shall promote knowledge transfer of “IsoDataBase” outputs to the food industry, regulatory, enforcement, research and consumer stakeholders and shall build a configurable web and mobile Enterprise Resource Planning that may convert any paper-based supply chain to digital.

The implementation of the investment shall be completed by 31 March 2025.

Investment 3 (C3.1I3): Upskill the existing farming community and professionalise future labour force by investing in human capital

The objective of the measure is the upskilling of the farming community, through knowledge transfer and the promotion of innovation. In this way, it aims at fostering a more competitive agricultural sector with higher potential, through capacity building and knowledge transfer.

The investment shall consist in the granting of ten scholarships in the agricultural sector, of EUR 10 000 each, for supporting the development of the future labour force in the sector. It shall also support transfer of knowledge and innovation within the existing labour force, through the use of the Agricultural Knowledge and Innovation System with links to academia, bridging the gap between practical application on the one hand and knowledge, science, experience and research on the other.

The implementation of the investment shall be completed by 31 December 2022.

Sub-Component 3.1.2 Innovative and competitive secondary sector

Investment 5 (C3.1I5): Creation of a National Commercial Identity and promotion of the traditional product “halloumi”

The objective of the measure is to establish a brand name for the Cypriot products in order to promote their export.

The investment shall consist in the development of action plans based on two studies: (a) one on the creation of a National Commercial Identity “Made in Cyprus” (branding) focusing on the quality and structural characteristics of Cypriot products and services combined with elements of the tradition and history of the island, and (b) a study for implementing a strategy for halloumi cheese in order to increase its distinctiveness as an authentic Cyprus product and designing a promotional and awareness campaign.

The implementation of the investment shall be completed by 31 March 2022.

Investment 6 (C3.1I6): Scheme for modernisation and digitalisation of enterprises engaged in manufacturing and trading of agricultural products

The objective of the measure is to strengthen the resilience of the agricultural sector, promote diversification of economic activity and ultimately accelerate sustainable economic growth. The measure aims to incentivise investments in new businesses or in the technological advancement of existing businesses, thus helping them bring to the market improved products, increase productivity and strengthen their growth prospects, create local jobs and provide the base for sustained growth of the overall economy.

The investment shall consist in the use of a grant scheme that shall provide aid to existing and newly established enterprises, especially SMEs, engaged in the processing, marketing and development of agricultural products covered by Annex I of the Treaty on the Functioning of the European Union, except wine, wine vinegar and activities related to fisheries and aquaculture. The scheme shall assist enterprises to finance investments in tangible or intangible assets to modernise and improve their production facilities, expand and increase their productive capacity, introduce new technologies and procedures and develop new or higher-quality agricultural products. The funding shall also help businesses to improve their digital capabilities, thus helping them improve their processes.

The implementation of the investment shall be completed by 31 March 2026.

Investment 7 (C3.1I7): Scheme for the enhancement of the competitiveness and/or the energy efficiency of large enterprises in Cyprus

The objective of the measure is to help large enterprises with capital expenditures for modernisation efforts that are expected to enable these enterprises to grow, become more competitive, create employment and thus contribute to economic development of the country, including energy efficiency improvements.

The investment shall consist in the grant scheme of up to EUR 7 000 000, to develop and promote existing and new large enterprises, mainly in the manufacturing sector. The grant scheme shall provide incentives to the enterprises to maintain their activities and employment, as well as to undertake energy efficiency investments.

In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the eligibility criteria contained in terms of reference for upcoming calls for projects shall exclude the following list of activities
[1](#footnote2)
: (i) activities related to fossil fuels, including downstream use; (ii) activities under the EU Emission Trading System (ETS) achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks; (iii) activities related to waste landfills, incinerators and mechanical biological treatment plants; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant EU and national environmental legislation may be selected.

The implementation of the investment shall be completed by 30 June 2026.

Sub-component 3.1.3 Sustainable, high value-added tourism sector

Investment 8 (C3.1I8): Enhancing the added value of the tourism sector with emphasis on the countryside, mountainous and remote areas

The objectives of the investment are to enrich the tourism product, attract new markets, while reducing seasonality and improving the built environment in the countryside, mountainous and remote areas.

The investment shall consist of grant support to three categories of businesses: (1) SMEs in the accommodation industry, such as hotels, in the countryside, mountainous and remote areas for renovation projects, (2) restaurants / taverns or businesses selling traditional food products, which may be included in the label “Taste of Cyprus”, for renovation works, and (3) SMEs in the accommodation industry, such as hotels, to include medical and assisted living facilities.

The implementation of the investment shall be completed by 30 June 2026.

Investment 9 (C3.1I9): Promotion of circular economy in hotel establishments

The objectives of the investment are to facilitate the transition of hotels’ business model to circular, or to develop circular products or services.

The investment consists of diagnostics, recommendations, training and coaching, and monitoring of the implementation of recommendations leading to certification.

The implementation of the investment shall be completed by 31 March 2026.

Investment 10 (C3.1I10): Enrichment of the tourism product in rural, mountainous and remote areas 

The objective of the investment is to support the economy in rural, mountainous and remote areas, by developing the offer of activities to visitors, such as workshops, live demonstrations and traditional souvenirs. It aims at enhancing the diversification of the tourism sector, creating jobs, reducing out-migration.

The investment consists of (i) the completion of the 2km long Aphrodite Route, which shall connect historical, religious and environmental points of the area (such as nature trails) and complements the creation of the “Authentic Experience Route” project , and (ii) grant support to enterprises and local community boards for limited-scale restoration of private and public buildings and mostly repurposing them in order to host micro and small businesses in the creative and manufacturing sectors, such as artists, handcrafts and traditional products.

The implementation of the investment shall be completed by 31 December 2025.

Sub-component 3.1.4 Circular economy

Reform 4 (C3.1R4): Enhancement of circular economy in the Industry

The objective of the measure is to enhance the circular economy model in the country through the implementation of a concrete Action Plan. The Action Plan shall include a grant scheme to enhance business investment in the circular economy, as well as actions such as (i) raising awareness among the consumers and the business community regarding the benefits of circular products towards the environment and about the strengths and business opportunities that the circular economy offers, (ii) providing consulting services regarding business diagnostics, business coaching, training of employees and preparation of a roadmap for transitioning to circularity, and (iii) sharing a marketplace platform for the circular economy to connect supply and demand of materials, scrub and waste.

The grant scheme shall be open to SMEs aiming to move into a circular operating model. Grants may go up to EUR 317 500 for each beneficiary, covering up to 60% of the investment cost incurred by each SME.

In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the eligibility criteria contained in terms of reference for upcoming calls for projects shall exclude the following list of activities
[2](#footnote3)
: (i) activities related to fossil fuels, including downstream use; (ii) activities under the EU Emission Trading System (ETS) achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks; (iii) activities related to waste landfills, incinerators and mechanical biological treatment plants; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant EU and national environmental legislation may be selected.

The implementation of the reform shall be completed by 30 June 2026.

Reform 5 (C3.1R5): Establishment of a Coordinating Body between central and local government

The objective of the measure is to upscale waste management towards prevention of waste and separate collection, thus contributing to compliance with the EU waste management directives as well as promoting the circular economy. The reform shall provide a mechanism to support local authorities both technically and financially, help them to liaise with the central government, create expertise and exploit funding opportunities in the field of waste management.

The reform consists in the establishment of a Coordinating Body between central and local government that shall promote activities within the waste management hierarchy and the waste management plan and support local authorities in this perspective. It shall also participate in research programmes, support pilot programmes and conduct education and information campaigns that aim at waste prevention and separation of waste, as well as maintain the database of programmes and projects in the field of waste management.

The implementation of the reform shall be completed by 30 June 2025.

Investment 12 (C3.1I12): Waste management towards circular economy

The objective of the measure is to contribute effectively to upscaling efforts towards recycling of dry recyclables. The investment aims to assist the achievement of recycling targets, increase waste prevention as the most important way to improve resource efficiency and reduce the environmental impact of waste.

The investment consists of the development, set-up, installation and operation of 50 green kiosks for dry recyclables to help municipalities in remote areas to improve their waste management schemes.

The implementation of the investment shall be completed by 31 December 2025.

E.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 |  |
| 85 | C3.1R1  Move agricultural practices from the 20th century to the 21st century by investing in a national centre for excellence in agri-tech | Milestone | Cooperation between the Agricultural  Research Institute and higher education institution(s), for at least one MSc programme | Entry into force of signed cooperation agreement(s) | - | - | - | Q4 | 2022 | Entry into force of legally binding document(s) establishing the collaboration for at least one MSc programme signed between the Agricultural Research Institute and higher education institution(s). |
| 86 | C3.1R1  Move agricultural practices from the 20th century to the 21st century by investing in a national centre for excellence in agri-tech | Milestone | Master in the wider domain of Agriculture | Media announcement and communication by competent authorities | - | - | - | Q2 | 2023 | Enrolment of students and start of a Master in the wider domain of Agriculture. |
| 87 | C3.1R2  On-line platform for improving the trade and information symmetry in the fresh produce supply chain | Milestone | Law on unfair practices in transactions in the local fresh produce market | Provision in the law indicating the entry into force of the new law on unfair practices in transactions in the local fresh produce market | - | - | - | Q2 | 2022 | Entry into force of a new law which shall address unfair trading practices in transactions in the local fresh produce market, such as unilateral and retroactive amendments to contracts, last minute cancellations, payment deadlines longer than 30 days, payment for damaged or unsold products and other actions affecting those involved in the production and distribution chain of agricultural products. |
| 88 | C3.1R2  On-line platform for improving the trade and information symmetry in the fresh produce supply chain | Milestone | Platform for recording transactions in the local fresh produce market | Platform available to Producers’ Organisations and communication of its availability by competent authorities | - | - | - | Q2 | 2026 | Fully operational Platform for recording transactions in the local fresh produce market shall be available to Producers’ Organisations. |
| 89 | C3.1R3  Genetic improvement of the Cyprus sheep and goat population | Target | Upgrade of record keeping in farms and participation of farmers in AGRICYGEN project | - | Number | 0 | 30 | Q4 | 2023 | At least 30 farmers have upgraded their record keeping on farm, their production processes, product quality evaluation efforts and participate in the nationally funded AGRICYGEN project. |
| 90 | C3.1R3  Genetic improvement of the Cyprus sheep and goat population | Target | Adoption of advanced recording and genomic evaluation processes, and selection of the best performing animals | - | Number | 0 | 20 000 | Q2 | 2026 | Farmers have adopted advanced recording and genomic evaluation processes, and selected the best performing animals based on genomic analysis outputs for at least 20 000 animals. |
| 93 | C3.1I2  Enhancement of isotopic database of traditional Cypriot products | Milestone | Liquid Chromatography- Isotopic Ratio Mass Spectrometer (LC-IRMS) equipment | Signed statement of the acceptance of equipment to the standard quality and time specified in the tender documents and the signed contract | - | - | - | Q4 | 2021 | Purchase and Install New Liquid Chromatography- Isotopic Ratio Mass Spectrometer (LC-IRMS) equipment for isotopic characterisation. |
| 94 | C3.1I2  Enhancement of isotopic database of traditional Cypriot products | Target | Local traditional foods/ drinks connected to the system | - | Number | 0 | 10 | Q1 | 2025 | Integrated Isotopic DataBases (for at least ten traditional/local foods/ drinks) connected to a Blockchain system. |
| 95 | C3.1I3  Upskill existing and future farmers | Target | Scholarships granted | - | Number | 0 | 5 | Q4 | 2022 | At least five scholarships granted to secondary school graduates to study degree courses related to agriculture, in cooperation with the Department of Agriculture, the Agricultural Research Institute and local universities. |
| 97 | C3.1I5  Creation of a National Commercial Identity and promotion of the traditional product “halloumi” | Milestone | Action Plans for (a) the “made in Cyprus” branding, and (b) for the promotion of the halloumi cheese | Publication of the Council of Ministers’ decision and of the action plan | - | - | - | Q1 | 2022 | Adoption by the Council of Ministers of Action Plans that shall consist of:  (1) assisting businesses to promote their products and services on the basis of the “made in Cyprus” branding, and  (2) increasing the distinctiveness of the halloumi cheese as an authentic Cyprus product and designing a promotional and awareness campaign for it. |
| 98 | C3.1I6  Scheme for modernisation and digitalisation of enterprises engaged in manufacturing and trading of agricultural products | Target | Grants to SMEs engaged with trade and production of agricultural products | - | Number | 0 | 65 | Q4 | 2024 | Award of grants to at least 65 Small and Medium Enterprises engaged in manufacturing and trading of agricultural products for their modernisation and digitalisation |
| 99 | C3.1I6  Scheme for modernisation and digitalisation of enterprises engaged in manufacturing and trading of agricultural products | Target | Grants to SMEs engaged with trade and production of agricultural products | - | Number | 65 | 176 | Q1 | 2026 | Award of grants to at least 176 SMEs engaged in manufacturing and trading of agricultural products for their modernisation and digitalisation |
| 100 | C3.1I7  Scheme for the enhancement of the competitiveness and/or the energy efficiency of large enterprises in Cyprus | Milestone | Start of the grant scheme on large enterprises | Publication of the call for proposals on the Ministry website | - | - | - | Q3 | 2023 | Following scheme approval by the Council of Ministers, issuance of call for proposals for the award of grants to large enterprises to expand existing business through investments that enhance the technological level, the production process and their productivity, as well as to undertake investments that improve their energy performance. The terms of reference including eligibility criteria that ensure that the selected projects comply with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation. |
| 101a | C3.1I7  Scheme for the enhancement of the competitiveness and/or the energy efficiency of large enterprises in Cyprus | Target | Grants to large enterprises | - | Number | 0 | 3 | Q4 | 2024 | Award of grants to at least three large enterprises, mainly in the Manufacturing Sector, to expand existing business through investments that enhance the technological level, the production process and their productivity, and to improve their energy performance.   All the projects selected shall be in compliance with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation. |
| 102a | C3.1I7  Scheme for the enhancement of the competitiveness and/or the energy efficiency of large enterprises in Cyprus | Target | Grants to large enterprises | - | Number | 3 | 10 | Q2 | 2026 | Award of grants to at least 10 large enterprises, mainly in the Manufacturing Sector, to expand existing business through investments that enhance the technological level, the production process and their productivity, and to improve their energy performance.   All the projects selected shall be in compliance with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation. |
| 103 | C3.1I8  Enhancing the added value of the tourism sector with emphasis on the country side, mountainous and remote areas | Target | Grant to SMEs to promote the tourism sector | - | Number | 0 | 200 | Q2 | 2024 | Grants awarded to at least 200 SMEs, comprising food establishments, restaurants / taverns, micro, small and medium enterprises selling traditional products, for investing in renovation or refurbishing. |
| 104a | C3.1I8  Enhancing the added value of the tourism sector with emphasis on the country side, mountainous and remote areas | Target | Grant to hotels to promote the tourism sector | - | Number | 0 | 57 | Q2 | 2026 | Grants awarded to at least 57 hotels and other tourism establishments, in countryside, mountainous and remote areas, for investing in renovation or refurbishing, including digital investments. |
| 104b | C3.1I8  Enhancing the added value of the tourism sector with emphasis on the country side, mountainous and remote areas | Target | Grants to promote medical tourism | - | Number | 0 | 20 | Q2 | 2026 | Grants awarded to at least 20 hotels and other tourism establishments, to include medical and assisted living facilities. |
| 105 | C3.1I9  Promotion of circular economy in hotel establishments | Target | Coaching scheme for circular economy | - | Number | 0 | 50 | Q2 | 2022 | Signed collaboration agreements with at least 50 hotels have been signed for tailored business coaching for circular economy. |
| 106 | C3.1I9  Promotion of circular economy in hotel establishments | Target | Coaching scheme for circular economy | - | Number | 0 | 18 | Q1 | 2026 | At least 18 hotels have been certified according to national standards as circular hotels following audit. |
| 107 | C3.1I10  Enrichment of the tourism product in rural, mountainous and remote areas | Milestone | Aphrodite Route | Signed statement of the acceptance of the project by project team (contracting authority) | - | - | - | Q4 | 2024 | Completion of the Aphrodite Route, which shall connect historical, religious and environmental points of the area (such as nature trails) with a special 2km long route, enhancing environmental awareness and promoting biodiversity. |
| 108 | C3.1I10  Enrichment of the tourism product in rural, mountainous and remote areas | Target | Grants to enterprises and local community boards to promote micro and small businesses in the creative and manufacturing sectors, such as artists, handcrafts and traditional products | - | Number | 0 | 150 | Q4 | 2025 | At least 150 enterprises and local community boards have renovated, refurbished or visually upgraded private and public buildings / infrastructures in countryside, mountainous and remote areas and repurposed them to host micro and small businesses in the creative and manufacturing sectors, such as artists, handcrafts and traditional products. |
| 109 | C3.1R4  Enhancement of circular economy in the Industry | Milestone | Approval of the National Action Plan for the Enhancement of Circular Economy in Cyprus | Publication of the Council of Ministers’ decision for the approval of the National Action plan. | - | - | - | Q4 | 2021 | Approval, by the Council of Ministers, of the National Action Plan for the Enhancement of Circular Economy in Cyprus |
| 110 | C3.1R4  Enhancement of circular economy in the Industry | Target | Aid for SMEs which are moving into a circular operating model | - | Number | 0 | 40 | Q2 | 2026 | Aid granted to at least 40 eligible SMEs, in compliance with the ’Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation. |
| 111 | C3.1R5  Establishment of a Coordinating Body between central and local government | Milestone | Legislation on coordination between Central and Local Government | Provision in the law indicating the entry into force of the legislation | - | - | - | Q2 | 2025 | Entry into force of Legislation, which shall establish a Coordinating Body between Central and Local Government. The Coordinating Body shall provide a mechanism to upscale waste management, contribute to compliance with EU waste management directives and promote circular economy. |
| 112 | C3.1I12  Waste management towards circular economy | Milestone | Signature of the contract for the installation of Green kiosks | Signature of the contract | - | - | - | Q3 | 2023 | Signed contract for the set up and installation of at least 50 Green kiosks for dry recyclables. |
| 115 | C3.1I12  Waste management towards circular economy | Target | Completion of installation and start of operation of the green kiosks | - | Number | 0 | 50 | Q4 | 2025 | Completion of set up, installation and start of operation of the green kiosks for dry recyclables. |

E.3. 
   Description of the reforms and investments for the loan

Investment 1 (C3.1I1): Construction of a collaborative marine aquaculture infrastructure (port and land facilities) in the Pentakomo coastal area

The objective of the measure is to cover the gap of not having sufficient port and land infrastructure for the daily needs of this activity, by covering existing as well as future needs of more than 70% of the marine aquaculture units operating in Cyprus, aiming at the smooth operation of this sector. The measure aims at maintaining the aquaculture’s viability, improve its competitiveness and provide for its future further sustainable development and expansion, strengthening the resilience, competitiveness and contribution of the primary sector to sustainable development of the Cypriot economy.

The investment shall consist in the construction of a collaborative infrastructure for marine aquaculture in the Pentakomo area, which shall be specifically designed to accommodate the needs of marine offshore aquaculture activities (safe service vessels docking, maintenance areas of equipment, storage areas, loading and unloading areas and fuelling station). It shall cover the construction of a small port with the required and appropriate land facilities that shall have the capacity to serve at least 70% of the marine aquaculture units operating in Cyprus.

The implementation of the investment shall be completed by 31 March 2026.

Investment 11 (C3.1I11): Improvement and extension of the Cyprus Green Points Network and creation of a network of Collection Points and Recycling Corners

The objectives of the measure are the improvement of the management of solid waste, the protection of the environment and public health. It aims at mitigating uncontrolled and illegal dumping of waste in public areas, increasing the rate of recovery and recycling materials, and raising users’ awareness of sustainable development and circular economy.

The investment foresees the construction of fourteen Green Points covering an area of at least 50 500 m² to serve citizens and local authorities to deposit specific household and municipal waste streams. In addition to the creation of new Green Points, the investments foresees the construction of Recycling Corners Network and Collection Points Network to give access to citizens of rural communities to dispose of their waste.

The implementation of the investment shall be completed by 30 June 2026.

E.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 |  |
| 91 | C3.1I1  Marine aquaculture construction | Milestone | Construction of the collaborative marine aquaculture | Contract signature | - | - | - | Q1 | 2023 | Signing the contract for the construction of a collaborative marine aquaculture infrastructure (port and land facilities) that shall specifically be designed for aquaculture activity. |
| 92 | C3.1I1  Marine aquaculture construction | Milestone | Operational collaborative marine aquaculture Infrastructure | Certificate confirming the delivery and operation of the infrastructure developed | - | - | - | Q1 | 2026 | Delivery of a fully functional / operational collaborative marine aquaculture infrastructure (port and land facilities) that shall specifically be designed for aquaculture activity and shall cover the needs of at least 70% of the marine aquaculture units operating in Cyprus. |
| 116a | C3.1I11Improvement and extension of the Cyprus Green Points Network and creation of a network of Collection Points and Recycling Corners | Target | Completion of construction, expansion and start of operation of four Green Points | - | Number | 0 | 4 | Q3 | 2024 | Completion of construction, expansion and start of operation of four Green Points in accordance with the National Strategic Plan for the Development of a National Green Point Network . |
| 116b | C3.1I11Improvement and extension of the Cyprus Green Points Network and creation of a network of Collection Points and Recycling Corners | Milestone | Completion of construction and start of operation of a network of Collection Points and Recycling Corners |  | - | - | - | Q2 | 2026 | Completion of construction and start of operation of a network of Collection Points and Recycling Corners in accordance with the National Strategic Plan for the Development of a National Green Point Network and the National Strategic Plan for the Development of Mountain Communities, respectively |
| 117 | C3.1I11Improvement and extension of the Cyprus Green Points Network and creation of a network of Collection Points and Recycling Corners | Target | Completion of construction, expansion and operation of 14 Green Points | - | Number | 4 | 14 | Q2 | 2026 | Completion of construction, expansion and start of operation of fourteen Green Points in accordance with the National Strategic Plan for the Development of a National Green Point Network |

F. COMPONENT 3.2: Enhanced Research and Innovation

The component of the Cypriot recovery and resilience plan addresses the challenges that Cyprus faces as regards the Research and Development ecosystem that plays a relatively limited role in economic growth. This is mainly due to a low share of Science, Technology, Engineering and Math (STEM) graduates, limited interaction of the public research system with the business sector and limited access and availability of risk funding.

The objectives of the component are to strengthen links between research organisations and enterprises, commercialise research results, increase intensity in research & development (R&D) activity and investments by both public and private organisations, as well as to make all publicly funded research infrastructure accessible to the entire ecosystem. Furthermore, it aims to enhance financial support to start-ups, scale-ups, SMEs, internationalise the local research and innovation (R&I) ecosystem, develop local talent and attract talent from abroad to work in R&I with emphasis on specific thematic areas.

The component addresses the Country-Specific Recommendations on increasing the focus on investment-related economic policy on research and innovation (Country-Specific Recommendations 3 of 2020 and 4 of 2019).

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).

F.1. 
   Description of the reforms and investments for non-repayable financial support

Reform 1 (C3.2R1): Comprehensive national Research and Innovation Policy supported by data-driven policy tools to support the R&I Ecosystem and to enhance links between policy making and implementation

The objective of the measure is to promote the efficient coordination of the R&I governance system, to foster awareness raising and nurture innovation culture, to mobilise stakeholders and to develop and augment the fundamental building blocks of the national R&I ecosystem (of three levels: policy making, strategy and implementation, stakeholders and users/citizens).

The reform shall consist in the implementation of the Action Plan for the National Strategy for Research and Innovation. This shall follow the political endorsement of the Action Plan, together with the adoption of a National Strategy for R&I and the revised Smart Specialisation Strategy for Cyprus. It shall also consist in establishment of a mechanism for impact driven monitoring and support of the seven Centres of Excellence and in the development of a digital tool for the dynamic mapping of the R&I ecosystem (stakeholders, policy measures and tools, R&I performance, registry of innovative companies and sector analytics).

The implementation of the reform shall be completed by 31 August 2026.

Reform 2 (C3.2R2): Incentives to encourage and attract investments and human capital in Research and Innovation

The objective of the measure is to attract investment in innovative companies and entrepreneurial and scientific talents from abroad.

The reform shall consist in the extension of the application of the tax scheme for investing in innovative companies to legal entities (from physical persons currently). Eligible investments of up to EUR 150 000 per investor, under this incentive, include equity, loans, guarantees and factoring. In addition, it shall consist in the review, promotion and, where appropriate, amendment of current incentive schemes aimed at attracting talents from third countries, including the Scientific VISA scheme for researchers and their families and the Start-up VISA scheme for founders of innovative enterprises and their families.

The implementation of the reform shall be completed by 30 September 2022.

Reform 3 (C3.2R3): Introduce policies and incentives to facilitate and foster access to publicly funded research infrastructure and laboratories

The objective of the measure is to optimise utilisation of publicly funded research infrastructure and laboratories by the business community.

The reform shall consist in (i) the development and launch of a dynamic digital tool accessible to all stakeholders of the R&I ecosystem, providing information circulation, tools and services for the facilitation of a collaborative partnership arrangement between different R&I organisations and teams (public and private) in respect to publicly funded research infrastructures and laboratories; (ii) introduction of measures and incentives (such as including in Research and Innovation Foundation grant agreement a clause for opening up funded infrastructure) in order to enhance the collaboration of Research Performing Organisations with business and spin-offs.

The implementation of the reform shall be completed by 31 December 2024.

Investment 1 (C3.2I1): Set up and operate a central knowledge transfer office

The objective of the measure is to improve technology transfer in Cyprus, through improved academia-business collaboration and commercialisation of research.

The investment shall consist in the creation and putting in operation of a Knowledge Transfer Office (KTO) by the Research and Innovation Foundation, to provide a cost-efficient solution for the support of technology transfer, built on the principles of acquiring a critical mass of research output and economies of scale. The KTO shall provide knowledge transfer services, facilitating commercialisation of research, to universities, other research organisations and enterprises. Indicative list of services: (a) evaluation of commercialisation prospects, (b) intellectual property rights advice, (c) patents filed and intellectual property rights maintenance cases, (d) development of commercialisation strategy, (e) technology marketing, (f) support in setting up spin-off companies, and (g) provision of funding to support translational research.

The KTO shall become self-financed starting from 1 January 2026, by retaining 20% of revenue from KTO managed agreements for operational costs, to be specified in the contractual arrangements between the Research and Innovation Foundation and the beneficiary.

The implementation of the investment shall be completed by 31 December 2025.

Investment 2 (C3.2I2): Innovation funding programmes & funding schemes for the enhancement of growth & competitiveness of start-ups, innovative companies and SMEs

The objective of the measure is to provide grant support through innovation programmes (such as Fast-Track Innovation, Pre-Seed, Seed, Innovate) as a means to improve access to funds for innovative SMEs and start-ups.

The investment shall consist in a grant support through innovation programmes (for instance, Fast-Track Innovation, Pre-Seed, Seed, Innovate) for businesses to develop innovative products and services with international orientation from concept to ready-for-market. The funding programmes shall (i) promote collaboration of businesses with research organisations; (ii) facilitate commercialisation of research results in targeting delivery of closer-to-market outputs and outcomes, thus allowing for shorter-term economic effects; (iii) lead to the creation of employment; (iv) promote business clustering, and (v) target accelerated transition to a green economy and towards a digital era of efficiency and productivity. These programmes shall require businesses to leverage private/own funds in conjunction with public funding (provided by the Research and Innovation Foundation), therefore contributing to the overall increase of R&D investment.

In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the eligibility criteria contained in terms of reference for upcoming calls for projects shall exclude the following list of activities
[3](#footnote4)
: (i) activities related to fossil fuels, including downstream use; (ii) activities under the EU Emission Trading System achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks; (iii) activities related to waste landfills, incinerators and mechanical biological treatment plants; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant EU and national environmental legislation may be selected.

The implementation of the investment shall be completed by 30 June 2026.

Investment 3 (C3.2I3): R&I funding program on green transition

The objective of the measure is to provide grant support through thematic R&I programmes of relatively high technology readiness levels focusing on green transition.

The investment shall consist in grant support of projects that shall be using new technologies to provide cost-effective solutions for green transition, thereby upgrading the country’s research capacity. The supported projects shall focus on renewable energy, energy efficiency and sustainable transport, entail collaboration with Centres of Excellence for R&I and/or other stakeholders, and facilitate the commercialisation of research results.

In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the eligibility criteria contained in terms of reference for upcoming calls for projects shall exclude the following list of activities
[4](#footnote5)
: (i) activities related to fossil fuels, including downstream use; (ii) activities under the EU Emission Trading System achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks; (iii) activities related to waste landfills, incinerators and mechanical biological treatment plants; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant EU and national environmental legislation may be selected.

The implementation of the investment shall be completed by 30 June 2026.

Investment 4 (C3.2I4): Funding schemes to support organisations performing R&D activities on dual technologies, including the creation of new or upgrade of existing laboratories and the development of classified laboratories

The objective of the measure is to promote dual-use research and to use technologies, which would otherwise only serve government/military purposes, for civilian, commercial and societal interests.

The investment shall consist in a grant support that would enable research organisations and companies to engage in R&D on dual-use technologies. The funding schemes shall enable the upgrade of the R&I capabilities and capacity of Research Centres of Excellence, academic institutions, research organisations as well as companies engaged in R&D on dual use technologies. In particular, they shall enable these organisations to acquire security classification certificates in order to be able to participate in consortia for European funding (such as Horizon Europe, European Defence Fund) as well as to enhance their R&I capabilities and competitiveness in the field of dual use technologies.

The funding shall focus on civil business only and research outcomes and infrastructure shall benefit civil applications only. The measure shall comply with the Council Regulation (EC) No 428/2009 of 5 May 2009 on setting up a Community regime for the control of exports, transfer, brokering and transit of dual-use items, regarding dual use technologies during the implementation of the funding scheme, and shall be designed in line with ‘EU Funding for Dual Use – A practical guide to accessing EU funds for European Regional Authorities and SMEs’.

In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the eligibility criteria contained in terms of reference for upcoming calls for projects shall exclude the following list of activities
[5](#footnote6)
: (i) activities related to fossil fuels, including downstream use; (ii) activities under the EU Emission Trading System achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks; (iii) activities related to waste landfills, incinerators and mechanical biological treatment plants; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant EU and national environmental legislation may be selected.

The implementation of the investment shall be completed by 30 June 2026.

F.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 |  |
| 120 | C3.2R1  National R&I Policy and policy tools | Milestone | Adoption of the national R&I Strategy and of the Action Plan to implement it | Publication of the Council of Ministers’ decision | - | - | - | Q4 | 2022 | Develop an integrated R&I Strategy, providing a long-term perspective framework, ensuring a focused effort and commitment for implementation, over time, on behalf of the State and stakeholders involved in the national R&I system, and a digital tool for the dynamic mapping of the R&I ecosystem. |
| 121 | C3.2R1  National R&I Policy and policy tools | Milestone | Completion of the Action Plan for the R&I Strategy | Publication of the Council of Ministers’ approval of the final report, attesting the completion of the action plan | - | - | - | Q2 | 2026 | Implementation of the measures in the Action Plan of the National Research and Innovation Strategy, as evidenced by a final report. |
| 122 | C3.2R2  Incentives for investments and human capital in R&I | Milestone | Tax exemption of legal entities for investing in innovative companies | Provision in the law indicating the entry into force of the legislation | - | - | - | Q1 | 2022 | Entry into force of a law establishing the tax exemption of corporate investors (legal entities) for investing in innovative companies. |
| 123 | C3.2R3  Policies to foster access to publicly funded research infrastructure and laboratories | Milestone | Digital registry to record and publish research infrastructure | Link to the digital registry published in the Deputy Ministry for Research, Innovation and Digital Policy website | - | - | - | Q4 | 2022 | Development and start of operation of a digital registry to record and publish research infrastructure that shall facilitate the request of access of interested parties to such infrastructure. It shall include the mapping of all publicly funded research institutions (under Horizon 2020, national schemes). It shall also improve visibility of the Research Institutions and support collaboration with the private sector. |
| 124 | C3.2R3  Policies to foster access to publicly funded research infrastructure and laboratories | Milestone | Collaboration of Research Performing Organisations with business and spin-offs | Publication of measures and incentives adopted on the Research and Innovation Foundation website | - | - | - | Q4 | 2024 | Adoption of measures and incentives to enhance the collaboration of Research Performing Organisations with business and spin-offs, such as including in Research and Innovation Foundation grant agreement a clause for opening up funded infrastructure. |
| 125 | C3.2I1  Set up and operate a central Knowledge Transfer Office (KTO) | Milestone | Launch of KTO | Opening of KTO’s first case | - | - | - | Q2 | 2022 | The Research and Innovation Foundation, responsible for putting in operation the KTO, has hired or contracted highly trained staff and/or experts to provide expert knowledge transfer services. Systems and tools shall be in place to support KTO operation. The KTO shall start the provision of services to universities, other research organisations or enterprises. |
| 126 | C3.2I1  Set up and operate a central Knowledge Transfer Office (KTO) | Target | Case files closed attesting provision of relevant knowledge transfer services | - | Number | 0 | 30 | Q4 | 2025 | At least 30 completed cases of knowledge transfer services provided by the central KTO to universities, other research organisations or enterprises. |
| 127 | C3.2I2  Innovation funding programmes for start-ups, innovative companies and SMEs | Milestone | Signature of grant agreements for 50% of budget | Grant agreements signed | - | - | - | Q4 | 2022 | Signing of grant agreements which commit at least 50% of total budget (contracts of a total value of at least EUR 26 000 000 total budget) for innovation funding programmes for start-ups, innovative companies and SMEs, with terms of reference including eligibility criteria that ensure that the selected projects comply with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation. |
| 128 | C3.2I2  Innovation funding programmes for start-ups, innovative companies and SMEs | Target | Organisations supported to carry out R&I related activities | - | Number | 0 | 70 | Q3 | 2023 | Funding support to at least 70 organisations to carry out R&I related activities such as industrial research, experimental research innovation activities, start-up activities, knowledge transfer activities, including (but not limited to) activities for the management and protection of intellectual property, for establishing links between research organisations and companies, for building knowledge transfer capacity and for commercialising research results, in compliance with the ’Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation. |
| 129 | C3.2I2  Innovation funding programmes for start-ups, innovative companies and SMEs | Target | Organisations supported to carry out R&I related activities | - | Number | 70 | 200 | Q2 | 2026 | Funding support to at least 200 organisations to carry out R&I related activities, in compliance with the ’Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation. |
| 130 | C3.2I3  R&I funding program on green transition | Milestone | Signature of grant agreements for a R&I funding programme of EUR 6 million budget | Grant agreements signed by the Director of the Research and Innovation Foundation | - | - | - | Q4 | 2022 | Signing of grant agreements for the selected proposals to be funded under a R&I funding program on green transition, with a total budget of EUR 6 million, with terms of reference including eligibility criteria that ensure that the selected projects comply with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation. |
| 131a | C3.2I3  R&I funding program on green transition | Target | Organisations supported by grants on green transition R&I activities | - | Number | 0 | 10 | Q2 | 2026 | At least 10 organisations supported by grants on green transition R&I activities,in compliance with the ’Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation. |
| 132 | C3.2I4  Funding to organisations performing R&D activities on dual technologies | Milestone | Signing of grant agreements which commit 80% of total budget for funding to organisations performing R&D activities on dual technologies | Grant agreements signed | - | - | - | Q2 | 2023 | Signing of grant agreements which commit 80% of total budget (contracts of at least a total value of 2 400 000 euro total budget) for funding to organisations performing R&D activities on dual technologies, with terms of reference including eligibility criteria that ensure that the selected projects comply with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation. |
| 133 | C3.2I4  Funding organisations performing R&D activities on dual technologies | Target | Funding for the development of classified Laboratories | - | Number | 0 | 16 | Q2 | 2026 | At least 16 enterprises are receiving funding for the development of classified laboratories. An enterprise may be counted more than once if it participates in more than one project, in compliance with the ’Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation. |

G. COMPONENT 3.3: Business support for Competitiveness

This component of the Cypriot Recovery and Resilience addresses the challenges of low productivity and competitiveness of the economy, driven by the enterprises’ small size on average, the complex licensing process requested for an investment and difficulties of access to funding to business. The objectives of this component are to support entrepreneurs and enterprises and improve their competitiveness and contribution to the growth of the economy by improving the regulatory framework regarding investment and entrepreneurial activity and to enhance SMEs productivity, mainly through digitalisation. It consists of six reforms and four investments, to be completed by Q2 2026.

The component addresses the Country-Specific Recommendation 3 of 2020 and Country-Specific Recommendation 4 of 2019.

G.1. 
   Description of the reforms and investments for non-repayable financial support

Reform 1 (C3.3R1): Facilitation of Strategic investments

The objective of the measure is to develop a new system supporting strategic investments, aiming at stimulating investment activity in the country through streamlined rules and mechanisms, simplifying the licencing and permit procedures, reducing the administrative burden and making the strategic investment environment more efficient. The definition of strategic investment refers to investments in strategic sectors (including Health and Social Care, Education, Culture, Sport, Environment, Industry, Tourism, Energy, Research, Development and Innovation) that significantly contribute to the development of the economy.

The reform shall consist in the entry into force of a legislation for the facilitation of strategic investments, in regards to the efficiency of obtaining investment licenses and building permits. A dedicated governmental sector shall be assigned for the processing of strategic investments. It shall consist in the preparation of the operational guidelines, process flows, and other ISO 9001:2015 requirements for mainstreaming the process. It shall develop Memorandum of Understandings with other Departments relevant to parts of the process in order to ensure the fast-track mechanism’s feasibility. Moreover, it shall include training of employees in the procedures to be introduced. In addition, the reform shall benefit from the set-up of a digital platform that shall enable applying, studying and issuing Planning and Building Permits digitally, through an application management tool and a GIS system (project under Component 3.4: “enhancing e-system for issuing building permits”).

The implementation of the reform shall be completed by 30 June 2023.

Reform 2 (C3.3R2): Enhancing Fast-Track Business Activation Mechanism

The objectives of the measure are the simplification of the procedures, the digitalisation of the governmental services and the operation of a Business Support Centre that shall provide all necessary and supportive information and services

The reform shall consist in the establishment of an interactive digital platform, enhancing the Business Facilitation Unit. Through the platform the investor shall be able to track his/her application but also the competent authorities shall be able to interact, exchange documents and process the application.

The implementation of the reform shall be completed by 31 December 2025.

Reform 3 (C3.3R3): Modernisation of the Companies Law

The objective of the measure is to support the improvement of the business environment by the review of the Companies Act, making it clearer in interpreting and applying the law in practice.

The reform shall consist in modernising the Cyprus Companies Law by using best practices from other common law jurisdictions to provide a foundation of knowledge and clarity in the form of case law and literature, to assist in interpreting and applying the law in practice. The accompanying Companies Rules shall also be reviewed. Moreover, Cyprus shall assign a team of legal experts to undertake the project for advisory and drafting services of the new Companies Law and Regulations. Moreover, the law review shall include the insolvency proceedings under the Companies Law, which are Liquidations, Receivership and Examinership. Also, the reform shall include the undertaking of an SME test during the preparing of the bill.

The implementation of the reform shall be completed by 30 June 2026.

Reform 4 (C3.3R4): Design and establish a National Promotional Agency

The objective of the reform is to improve access to finance for Small Medium Enterprises (SMEs) by facilitating access to loans and guarantees and enhance the absorption capacity of EU financing through EU tools.

The reform shall consist of an ex-ante assessment analysis covering SMEs’ access to finance in all sectors of the economy with a focus on green transition, digital enablement and alternative financing. The report shall define the scope of intervention of the proposed National Promotional Agency (NPA). The legal and organisational set-up of the NPA shall be defined after the final selection of its scope of activity. The proposed structure shall allow a high transparency of NPA's operations and autonomy. The Agency shall not operate with a banking license and therefore shall not need to be capitalised a priori. A steering committee, with the participation of representatives of the Ministry of Finance and the Ministry of Energy, Commerce and Industry shall monitor the implementation.

The implementation of the reform shall be completed by 30 September 2025.

Reform 5 (C3.3R5): Strategic Investor of the Cyprus Stock Exchange

The objective of the reform is the privatisation of the Cyprus Stock Exchange.

The reform shall consist in a tender process, which is currently underway whereby the Cyprus Stock Exchange seeks to appoint a reputable independent advisor or consortium thereof, with extensive relevant expertise to find the most suitable strategic investor for the Cyprus Stock Exchange. The privatisation phase of the contract shall be concluded upon final approval by the House of Representatives of the Republic of Cyprus, after all other conditions have been met.

The implementation of the reform shall be completed by 31 December 2024.

Reform 6 (C3.3R6): Incentives to promote mergers & acquisitions

The objective of the measure is to incentivise the increase of SMEs’ size.

The reform shall consist in targeted incentives to promote the mergers or acquisitions of enterprises in order to scale-up and become more competitive. In particular, the reform shall consist in the approval of a report and an accompanying action plan by the Council of Ministers, following the evaluation of similar regimes within the EU and consultation with stakeholders for specific incentives for promoting mergers and acquisitions.

The implementation of the reform shall be completed by 31 December 2022.

Investment 2 (C3.3I2): Creation of a Regulatory Sandbox to enable FinTech

The objective of the measure is to enable FinTech, start-ups, and other innovative companies to expand their offering in new products or services, by regulators establishing a "testing ground" that would allow them to conduct live experiments in a controlled environment under their supervision.

The investment shall consist in facilitating the development of a suitable and attractive regulatory regime on FinTech and innovative technologies and strike a balance between the seamless deployment of innovative products or services and ensuring investors’ protection.

The implementation of the investment shall be completed by 30 September 2025.

Investment 4 (C3.3I4): Scheme for the digital upgrade of enterprises

The objective of the investment is to enhance the integration of digital technology in existing and future SMEs established in Cyprus. More specifically, the measure aims to enhance the digital identity of the businesses, increasing the share of Small and Medium Enterprises that use information and communication technologies, including the e-commerce sector, and to promote digital entrepreneurship.

The investment shall consist in the provision of financial grants of about EUR 30 000 to each beneficiary, as a share of what they shall have invested in eligible investment for the digital upgrade of their enterprises.

The implementation of the investment shall be completed by 30 June 2026.

Investment 6 (C3.3I6): State funded equity fund

The objective of the measure is the establishment of a Fund to support the efforts of the Government to enhance access to alternative sources of finance aiming to (i) foster economic development and growth and enhance the competitiveness of small-medium enterprises in Cyprus; (ii) increase the availability of alternative financing sources, particularly for innovative companies and start-ups; and (iii) contribute to the enhancement of the ecosystem for equity and venture capital investments.

The investment shall consist in a tender procedure to select and appoint an external fund manager for an investment period that is foreseen to be five years.

In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the legal agreement between Cyprus and the Fund in charge of the financial instrument and the subsequent investment policy of the financial instrument shall

I.require the application of the Commission’s technical guidance on sustainability proofing for the InvestEU Fund; and

II.exclude the following list of activities and assets from eligibility: (i) activities and assets related to fossil fuels, including downstream use
[6](#footnote7)
; (ii) activities and assets under the EU Emission Trading System (ETS) achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks
[7](#footnote8)
; (iii) activities and assets related to waste landfills, incinerators
[8](#footnote9)
 and mechanical biological treatment plants
[9](#footnote10)
; and (iv) activities and assets where the long-term disposal of waste may cause harm to the environment; and

III.require the verification of legal compliance with the relevant EU and national environmental legislation of the projects by Fund for all transactions, including those exempted from sustainability proofing.

The implementation of the investment shall be completed by 30 June 2026.

G.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 |  |
| 134 | C3.3R1  Facilitation of Strategic investments | Milestone | Law for strategic investments | Provision in the law indicating the entry into force of the law | - | - | - | Q1 | 2022 | Entry into force of a law supporting strategic investments in Cyprus which shall include the following elements: streamlining of procedures for licencing strategic investment, project manager for each project, timely issuance of building permits. |
| 135 | C3.3R1  Facilitation of Strategic investments | Milestone | Organisational capacity’s enhancement for the facilitation of strategic investments | Publication in the official gazette the setup of a government sector facilitating the reform, and of the process system and guidelines, and stated verification by the coordinating authority of training completion | - | - | - | Q2 | 2023 | Publication in the official gazette of the completion of the setup of a sector in the Department of Town Planning and Housing for the enhancement of the facilitation of strategic system; publication of the process system and of the guidelines design; and reporting by the Coordinating authority of key personnel training for the implementation of the reform. |
| 136 | C3.3R2  Enhancing Fast-Track Business Activation Mechanism | Milestone | Establishment of an electronic system where investors can submit their online application | Announcement by the Ministry of Commerce of the electronic system accepting applications | - | - | - | Q4 | 2022 | Upgrade of the services of applications for business permit issuance, guidance for establishment and operation, provision of information for all the necessary permits required by the company to start operations, facilitation for the issuance of residence and employment permits in Cyprus for third-country nationals, application for registration as a foreign interest company through the establishment of an electronic system where investors may submit their online application. |
| 137 | C3.3R2  Enhancing Fast-Track Business Activation Mechanism | Target | Establishment of a platform where investors can track their online application and interact with the competent authorities and assessments of applications for investment through the platform | - | Number | 0 | 50 | Q4 | 2025 | Completion of the assessment of at least 50 applications for investment through the platform. |
| 138 | C3.3R3  Modernisation of the Companies Law | Milestone | Submission of the draft law to the Parliament for approval, restructuring the Companies Law | Submission of the draft law to the Parliament, after its adoption by the Council of Ministers | - | - | - | Q3 | 2025 | Submission of the draft law to the Parliament for approval. The draft law shall restructure the Companies Law. It shall in particular modernise the Cyprus Companies Law by using best practices from other common law jurisdictions to provide a foundation of knowledge and clarity in the form of case law and literature and to assist in interpreting and applying the law in practice. |
| 139 | C3.3R3  Modernisation of the Companies Law | Milestone | Entry into force of the Companies Law | Provision in the law indicating the entry into force of the law | - | - | - | Q2 | 2026 | Entry into force of the Companies Law which shall restructure the Companies Law. It shall in particular modernise the Cyprus Companies Law by using best practices from other common law jurisdictions to provide a foundation of knowledge and clarity in the form of case law and literature and to assist in interpreting and applying the law in practice. |
| 140 | C3.3R4  Design and establish a National Promotional Agency | Milestone | Approval by the Council of Ministers of the roadmap for the creation and establishment of a National Promotional Agency | Publication of the Council of Ministers’ decision | - | - | - | Q2 | 2023 | Approval by the Council of Ministers of the roadmap for the creation and establishment of a National Promotional Agency which shall facilitate access to loans and guarantees to Small and Medium Enterprises and enhance the absorption capacity of EU financing through EU tools. |
| 141 | C3.3R4  Design and establish a National Promotional Agency | Milestone | Start of operations of Cyprus National Promotional Agency | Initial set-up validated by Permanent Secretary | - | - | - | Q3 | 2025 | Start of operations of Cyprus National Promotional Agency, including staffing with required staff |
| 142 | C3.3R5  Strategic Investor of the Cyprus Stock Exchange | Milestone | Selection of a strategic investor to buy a controlling stake in Cyprus Stock Exchange | Council of Ministers approves Agreement | - | - | - | Q4 | 2024 | Selection of a strategic investor to buy a controlling stake in Cyprus Stock Exchange, signing of the relevant agreements, achieving financial closing of the transaction. |
| 143 | C3.3R6  Incentives to promote mergers and acquisitions. | Milestone | Action Plan for incentives for mergers and acquisitions | Council of Ministers adoption of a report and the accompanying action plan | - | - | - | Q4 | 2022 | Approval of a report and an accompanying action plan by the Council of Ministers on specific incentives for promoting mergers and acquisitions, following the evaluation of similar regimes within the EU and consultation with stakeholders. |
| 144 | C3.3I2  Creation of a Regulatory Sandbox to enable FinTech | Milestone | Regulatory Sandbox with a view on FinTech and innovative technologies | Announcement for the launch of the regulatory Sandbox by Cyprus Securities and Exchange Commission. | - | - | - | Q2 | 2024 | Launch a Regulatory Sandbox which shall facilitate the development of a suitable and attractive regulatory regime on FinTech and innovative technologies and strike a balance between the seamless deployment of innovative products or services and ensuring investors’ protection. |
| 147 | C3.3I4  Scheme for the digital upgrade of enterprises | Milestone | Publication of call for proposals following approval of the scheme by the Council of Ministers | Official announcement of the call for proposals in the press, the MECI/ITS website and MECI/ITS social media | - | - | - | Q2 | 2023 | Publication of call for proposals for grants covering a percentage of expenditure that shall enhance the digital identity of the businesses, or shall increase the amount of small and medium-size enterprises that use information and communication technologies (including the e-commerce sector), or shall promote digital entrepreneurship , following approval of the scheme for the digital upgrade of enterprises by the Council of Ministers. |
| 148 | C3.3I4  Scheme for the digital upgrade of enterprises | Target | SMEs supported following submission of payment applications. | - | Number | 0 | 290 | Q2 | 2026 | At least 290 SMEs supported following submission of payment applications and administrative and on the spot verifications performed by the responsible Scheme Management Team. |
| 151 | C3.3I6  State funded equity fund | Milestone | Setup of the Fund | Registration of the Fund | - | - | - | Q4 | 2022 | The setup of the Fund is completed. The Fund shall increase the availability of alternative financing sources, particularly for innovative companies and start-ups.    The investment policy shall include eligibility criteria for investees to ensure compliance with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) of supported transactions under this measure through the use of sustainability proofing, the requirement of compliance with the relevant EU and national environmental legislation, and the requirement for beneficiaries that derived more than 50% of their revenues during the preceding financial year from activities or assets in the exclusion list to adopt and publish green transition plans. |
| 152 | C3.3I6  State funded equity fund | Target | Investees supported through the Fund | - | Number | 0 | 12 | Q2 | 2026 | At least 12 investees (start-ups and innovative companies) supported through the Fund. |

G.3. 
   Description of the reforms and investments for the loan

Investment 1 (C3.3I1): Integrated Information system for the Department of Registrar of Companies and Intellectual Property.

The objectives of the measure are the design, development, implementation, maintenance and operation of an Integrated Registry Platform solution supporting the processes and services of the Companies Section and Intellectual and Industrial Property Section of the Department of Registrar of Companies and Intellectual Property, in such a way to drive the digital transformation of the two aforementioned sections to become established as frontrunners in digital presence, online capabilities and outstanding customer service delivered by efficient internal processes and supported by flexible IT systems.

The investment shall consist in the installation of the hardware and software of the system, completing the network infrastructure, and the training of the personnel for the new system.

The implementation of the investment shall be completed by 31 December 2025.

G.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 |  |
| 153 | C3.3I1  Integrated Information system for the Department of Registrar of Companies and Intellectual Property | Milestone | System hardware and software installation and networking completed | Issuance of completion and of operation for the installation of system hardware & software and networking completed | - | - | - | Q1 | 2024 | Installation of system hardware & software and networking completed (servers, hard disks, PCs and peripherals, RDBMS, operating systems and routers). |
| 154 | C3.3I1  Integrated Information system for the Department of Registrar of Companies and Intellectual Property | Target | Training of personnel | - | % (Percentage) | 0 | 100 | Q4 | 2025 | Training of 100% of personnel of the Department of Registrar of Companies and Intellectual Property and the Department of Information Technology Services personnel on the rolled-out information system and related operational procedures. |

H. COMPONENT 3.4: Modernising public and local authorities, making justice more efficient and fighting corruption

This component of the Cypriot recovery and resilience plan addresses long-standing challenges in the functioning of public administration, at both the central and the local levels, the justice system and the anti-corruption framework. The objectives of the component are: (i) to increase the effectiveness, efficiency and relevance of government processes, considering current challenges, needs, and expectations of citizens and businesses, (ii) to strengthen the administrative capacity and cooperation of the Ministry of Interior and local governments to ensure the effective implementation of the new local administration model, (iii) to improve the effectiveness, including quality and efficiency, of the justice system, through accelerating the administration of justice and reducing the backlog of cases, and (iv) to achieve greater coherence to the government’s efforts to fight corruption.

The reforms and investments included in the component contribute to addressing the Country-Specific Recommendations on improving efficiency in the public sector, in particular as regards the functioning of the public administration and of local governments (Country-Specific Recommendations 1 of 2019 and 4 of 2020), on promoting flexible working arrangements (Country-Specific Recommendation 2 of 2020), on improving the efficiency and digitalisation of the judicial system (Country-Specific Recommendation 5 of 2019 and Country-Specific Recommendation 4 of 2020) and on anti-corruption reforms (Country-Specific Recommendation 5 of 2019).

H.1. 
   Description of the reforms and investments for non-repayable financial support

Subcomponent 3.4.1: Modernising the Public Sector

Reform 1 (C3.4R1): Enhance the administrative capacity and improve the functioning of public administration for better policy making and implementation

The objective of the reform is to improve the functioning of general public administration by improving its human resource management framework and to restructure and enhance the administrative capacity of the Cyprus Police.

The reform shall consist of two elements:

I)Development and implementation of an action plan to strengthen the administrative capacity and the strategic role in human resource management of the Public Administration and Personnel Department relating to the formulation and monitoring of implementation of public administration and human resource management policies in the public sector, such as policy setting, formulation of guidelines and basic principles on human resource management matters, review of existing policies, legislation and practices, and industrial relations. In parallel, the reform shall enhance line Ministries’ capacity to implement public administration policies and human resource functions, while ensuring adequate accountability and responsiveness;

II)reorganisation and modernisation of the Cyprus Police by designing and implementing a new model of policing and operations, a new management framework for learning and development, and a new human resources management framework.

The implementation of the reform shall be completed by 31 December 2025.

Reform 2 (C3.4R2): Regulate flexible working arrangements in the public sector

The objective of the reform is to increase productivity and effectiveness of the public service through the use of flexible working arrangements, such as working remotely, partly remotely, and part-time.

The reform shall consist in implementing flexible working arrangements in the public sector on the basis of an assessment by the Public Administration and Personnel Department of the recommendations of an external study of best practices and possible limitations noted by other national public administrations. The study shall review the terms and conditions for flexible working arrangements in the public service as applied in other jurisdictions.

The implementation of the reform shall be completed by 31 December 2024.

Reform 3 (C3.4R3): Introduce new framework for evaluation and selection process for filling public service vacancies and new regulations for the evaluation of employees’ performance

The objective of the reform is to improve the functioning of the public service through a review of the recruitment and promotion framework and of the performance appraisal system.

The reform shall consist of: (i) introducing a new framework in the public service for the evaluation and selection of candidates for promotion posts, including managerial posts, based on merit; (ii) introducing a new performance appraisal system to be used for development and promotion purposes in order to make appraisal and promotion more transparent, fair, skill-based and effective; and (iii) improving the recruitment procedures through training, update of the Schemes of Service (the set of requirements and duties for jobs in the public administration) and changes in the two relevant laws for recruitment.

The implementation of the reform shall be completed by 31 March 2025.

Reform 4 (C3.4R4): Strengthen administrative capacity and transparency through the professionalisation of public procurement and further digitalisation of its process

The objective of the reform is to increase the efficiency and effectiveness of public procurement by introducing new procurement processes using digital tools and increasing knowledge and expertise of personnel.

The reform shall consist in introducing an integrated fully digitalised e-procurement system using modern technologies, thus reducing administrative burden for participants while safeguarding accountability and transparency. It shall be accompanied by measures aimed at the professionalisation of public procurement, such as revising the organisational structure of the central professional public procurement function and training and certification of procurement professionals.

The implementation of the reform shall be completed by 31 December 2025.

Reform 5 (C3.4R5): Enhancement of the capacity of the Law Office

The objective of the reform is to implement a digital transformation of the Law Office, aiming to increase its efficiency and effectiveness, as well as the productivity, quality of work and working conditions of the employees.

The reform shall consist in digitalising all the processes and procedures of the Law Office by introducing an IT system (eLaw System), which shall be delivered as a complete Software-as-a-Service solution. It shall include the supply, development and customisation of an existing web-based management system to provide features such as the creation of electronic case files and folders, case management and monitoring, internal communication and workflows, tracking of cases, financial management and payments. During the implementation of the project, a business analysis shall assess needs for process re-engineering. All existing paper files shall be migrated into the core eLaw System.

The implementation of the reform shall be completed by 31 December 2023.

Investment 2 (C3.4I2): Digitalisation of the law-making process

The objective of the investment is to improve the quality of regulation and increase legal certainty and transparency by modernising the legislative drafting process and publication of applicable legislation.

The investment shall consist in establishing a legislation preparation platform enabling easier drafting, consolidation, management and storing of laws and regulations. The system shall also become the official government single point of digital access for the public to all legislation texts in an interoperable format. The investment shall cover the upload of all existing laws and regulations into the new platform.

The implementation of the investment shall be completed by 31 December 2025.

Investment 3 (C3.4I3): Economic Policy Modelling Hub

The objective of the investment is to improve policymaking and implementation by increasing the use of quantitative modelling techniques for regulatory impact assessment.

The investment shall consist in developing modelling tools and expertise among public personnel to allow for better policy impact assessment. This shall be achieved by (i) establishing an Economic Policy Modelling Hub disposing of the tools and data for policy analysis and evaluation; (ii) transferring the policy analysis and evaluation knowledge to the employees of the Ministry of Finance; and (iii) developing tools for big data and data analytics.

The implementation of the investment shall be completed by 31 December 2025.

Subcomponent 3.4.2: Local Administration and Spatial reform

Reform 6 (C3.4R6): New legal framework for Local Authorities and relevant support measures

The objective of the measure is to reform the local government system in Cyprus to improve its decision-making power and administrative autonomy, to increase efficiency of governance and to align resources and responsibilities to ensure financial sustainability.

The reform shall consist in adopting new legislation that shall: reduce the number of municipalities and create community clusters for the centralised provision of services in order to improve administrative capacity; introduce a new model of administration and a new staff structure for municipalities; transfer competences and resources from the central government to the municipalities, in particular in the areas of issuing permits, social policy, local infrastructure maintenance, schools and the provision of local services to the citizens; reform the financing of municipalities; and ensure adequate legal supervision, transparency and democratic accountability. The reform shall also include capacity building through training.

The implementation of the reform shall be completed by 31 December 2024.

Reform 7 (C3.4R7): Urban land consolidation

The objective of the reform is to reduce the pressure for municipalities’ expansion and increasing soil seal by facilitating the utilisation of available land for construction purposes.

The reform shall consist in setting up a legislative framework for urban land consolidation and promoting implementation of urban land consolidation master plans in selected areas or in areas of strategic significance for the island. The reform shall also include the preparation of an expert study, a digital platform for enabling urban land consolidation, and the preparation of urban land consolidation pilot master plans.

The implementation of the reform shall be completed by 31 December 2025.

Investment 4 (C3.4I4): Enhancing e-system for issuing building permits

The objective of the investment is to increase the efficiency of building permit procedures.

The investment shall consist of (i) expanding the e-application environment of the existing Hippodamos IT system for planning and permitting, to enable all planning authorities and building authorities (municipalities) to submit applications for planning and building permits from a common platform; (ii) upgrading the Hippodamos system to enable applying, studying and issuing planning and building permits digitally; and (iii) upgrading or expanding other Hippodamos modules, such as construction contract management and administration.

The implementation of the investment shall be completed by 31 December 2024.

Investment 5 (C3.4I5): Smart cities

The objective of the investment is to coordinate on-going smart cities initiatives into a nationwide implementation plan.

The investment shall consist in putting forward a Smart City National Master Plan, focussing on three priority smart solutions for municipalities: smart parking, smart lighting and smart waste collection management. The investment shall entail the design and implementation of the smart city infrastructure (central platform) as well as the design and implementation of the three priority smart solutions, including the installation of sensors. The central platform shall have the necessary flexibility for future additions of new smart cities solutions.

The implementation of the investment shall be completed by 30 June 2026.

Investment 6 (C3.4I6): Regeneration and Revitalisation of Nicosia Inner City

The objective of the investment is to revitalise the Nicosia inner city by attracting young residents, new investments and fostering economic activity.

The investment shall consist of (i) the renovation of the Faneromeni School to be used as a department of the University of Cyprus; (ii) the purchase and renovation of buildings in the inner city to be transformed into student accommodation; and (iii) the introduction of private sector incentives to provide student accommodation in the area.

The implementation of the investment shall be completed by 30 June 2026.

Subcomponent 3.4.3: Efficient Justice System

Reform 8 (C3.4R8): Efficiency of Justice

The objective of the reform is to reduce the high backlog of cases pending before the courts and to increase the overall efficiency and quality of the justice system.

The reform shall consist in preparing an action plan to eliminate the backlog of cases and appeals with specific annual targets and setting up a taskforce of judges, which is expected to coordinate the implementation of the action plan to reduce the backlog of pending cases. The action plan is expected to be completed by 31 December 2021. Pending cases shall be defined as cases pending for more than two years. On 31 December 2020 there were: 24 777 pending civil cases, 2 222 pending appeals of civil cases, and 475 pending appeals of administrative cases. The reform shall also consist in implementing the revised Rules of Civil Procedure, which were adopted by the Supreme Court on 19 May 2021 and which shall increase efficiency in the judicial proceedings including in adjudicating cases.

The implementation of the reform shall be completed by 30 June 2026.

Reform 9 (C3.4R9): Digital transformation of courts

The objective of the reform is to address the inefficiencies of the justice system caused by the courts operating based on manual and paper-based systems. The digitalisation of the system shall streamline and expedite justice.

The reform shall consist in installing and operating (i) the i-justice system an interim solution to address the most pressing needs before the e-justice is available, (ii) an integrated e-justice system and (iii) digital audio recording in court proceedings. The e-justice system shall be accessible to courts, lawyers, citizens, the Law Office of the Republic and the Police. It shall introduce several functions such as digital case filing and payment, case categorisation, case searching, document production and management, tracking and monitoring systems to support the streaming of cases, monitoring compliance with orders and protocols, managing allocations of cases to hearing, decision execution and management, case closing and evidence management.

The implementation of the reform shall be completed by 31 March 2025.

Investment 7 (C3.4I7): Training of judges

The objective of the investment is to address the low level of training and lifelong learning for judges.

The investment shall consist in training of judges on the revised Civil Procedure Rules and/or other judicial trainings on various legal topics and judicial skills organised by the Cyprus School for Judicial Training.

The implementation of the investment shall be completed by 31 December 2025.

Investment 8 (C3.4I8): Upgrading the infrastructure of courts

The objective of the investment is to address inefficiencies of the justice system caused by inadequate court buildings, both in terms of quantity and quality.

The investment shall consist of the construction of an extension to the Famagusta District Court building.

The implementation of the investment shall be completed by 31 December 2021.

Subcomponent 3.4.4: Fighting Corruption

Reform 10 (C3.4R10): Improving the legal and institutional framework for fighting corruption

The objective of the reform is to achieve greater coherence in the fight against corruption by implementing the national horizontal action plan against corruption.

The reform shall consist of: (i) legislation to protect whistle-blowers, to enhance transparency in public decision-making processes and to prevent conflict of interest, (ii) establishment and operation of an independent authority against corruption, which shall coordinate the efforts of all bodies engaged in the fight against and prevention of corruption and shall supervise the timely implementation of actions by the different competent services (iii) anti-corruption public awareness and trainings and (iv) reinforcement of the Internal Audit Units in all the Ministries and the Internal Audit Service.

The implementation of the reform shall be completed by 30 June 2024.

H.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 |  |
| 155 | C3.4R1  Enhance the administrative capacity and improve the functioning of public administration for better policy making and implementation | Milestone | Action Plan on the efficient management of human resource issues in the national public administration | Adoption of the Action Plan by the Council of Ministers | - | - | - | Q1 | 2022 | The Council of Ministers has adopted an Action Plan that shall include:  - Guidelines, templates and implementation support by the Public Administration and Personnel Department (PAPD) to line ministries’ administration in relation to human resource management issues such as re-organisation and re-structuring, simplification of procedures and workforce planning;  - Implementation of a revised organisational structure of PAPD  - Learning and Development Plan for PAPD staff;  - Training Plan for line ministries’ administration |
| 156 | C3.4R1  Enhance the administrative capacity and improve the functioning of public administration for better policy making and implementation | Milestone | New human resources management framework for Cyprus Police | Adoption by the Chief of Police and the Permanent Secretary of the Ministry of Justice and Public Order, and entry into force | - | - | - | Q4 | 2023 | The new human resources management framework for Cyprus Police has entered into force and shall cover following areas:  - Analysis and creation of job descriptions  - Recruitment  - Motivation  - Training and Development  - Compensation and Benefits  - Labour and employee relations and communication  - Management of retired members  - Safety and Health  - Human resource management strategy |
| 157 | C3.4R1  Enhance the administrative capacity and improve the functioning of public administration for better policy making and implementation | Milestone | Implementation of the Action Plan on the efficient management of human resource issues in the national public administration | Final report approved by the Council of Ministers on the implementation of the Action Plan | - | - | - | Q4 | 2025 | The Action Plan has been implemented, including:    - Guidelines and manuals for line ministries’ administration regarding recruitment procedures, disciplinary procedures, workforce planning, re-organisation and simplification of processes reviews  - Legislative amendments where appropriate  - Training of staff in line ministries’ administration |
| 158 | C3.4R2  Regulate flexible working arrangements in the public sector | Milestone | Decision on flexible working arrangements in the public sector | Decision by the Council of Ministers | - | - | - | Q1 | 2023 | A study regarding flexible working arrangements in the public sector shall be conducted. The PAPD shall assess the study’s recommendations considering appropriate safeguards aiming at improving the effectiveness of the public service. Following the assessment of the study’s recommendations, a decision regarding their implementation shall be taken by the Council of Ministers. |
| 159 | C3.4R2  Regulate flexible working arrangements in the public sector | Milestone | Implementation of flexible working arrangements | Final report by the PAPD on implementation of the Council of Ministers Decision | - | - | - | Q4 | 2024 | Implementation of the decision of the Council of Ministers, through, where relevant, amendment of law/regulations, communication of policies and trainings, on the basis of an action plan developed by the Public Administration Personnel Department. |
| 160 | C3.4R3  Introduce new framework for evaluation and selection process for filling public service vacancies and new regulations for the evaluation of employees’ performance | Milestone | Entry into force of legislation for the evaluation and selection process for public service vacancies and regulations for employees’ performance evaluation. | Provision in the relevant law(s) and regulations indicating their respective entry into force | - | - | - | Q4 | 2021 | The main elements shall be:  (i) entry into force of a law providing for the evaluation and selection of candidates to fill the public service promotion posts, including managerial posts, with new criteria and methods based on objective assessment and merit, and amendment of the Public Service Law where deemed necessary, and    (ii) entry into force of new regulations for implementing a new performance appraisal system for public employees, to be used for development and promotion purposes in order to make the performance appraisal procedure and the promotion mechanism more transparent, fair, skill-based and effective |
| 161 | C3.4R3  Introduce new framework for evaluation and selection process for filling public service vacancies and new regulations for the evaluation of employees’ performance | Milestone | New framework for performance evaluation and filling of vacancies in the public service. | Entry into use of the new framework | - | - | - | Q1 | 2025 | Civil servants’ performance shall be evaluated and public service vacancies filled in accordance with the new legal framework, following its effective implementation including through training of relevant employees. |
| 162 | C3.4R4  Strengthen administrative capacity and transparency through the professionalisation of public procurement and further digitalisation of its process | Milestone | New integrated e-procurement system | First calls for tender have been launched under the new e-procurement system | - | - | - | Q4 | 2025 | The new integrated e-procurement system shall be fully operational including all development, testing and training of users.    The main functionalities of the system shall be:  - support the only once principle for submission of data by private users  - statistical reporting  - support the use of emerging technologies that may be used by both contracting authorities and economic operators in their administrative functionalities  - Facilitate the administrative work of the contracting authorities  - User-friendly interface to economic operators with emphasis on SMEs  - Publication of open data regarding the public procurement procedures  - Provide the contracting authorities and the decision-makers information regarding public procurement procedures, throughout the project life cycle. |
| 163 | C3.4R5  Enhancement of the capacity of the Law Office | Milestone | New IT system for the Law Office | Entry into service of the new IT system | - | - | - | Q4 | 2023 | Full operationalisation of a Software-as-a-Service solution for the Law Office that shall have the following features:  - creation of electronic case files and folders,  - case management and monitoring,  - internal communication and work flows,  - tracking of cases, financial management and payments,  - digitalisation of paper files.  Training of users has been concluded. |
| 165 | C3.4I2  Digitalisation of the law-making process | Milestone | Implementation of the Cyprus Legislation Preparation Platform | Entry into service of the new system | - | - | - | Q1 | 2025 | Entry into operation of the Platform and completion of training for administrators and privileged users.    The fully functioning Legislation Preparation Platform shall enable:  - drafting and management of bills through a web editor, with possibility to export in XML format at all stages of the law preparation process,  - a central database to store and disseminate the legal texts as open data though Application Programming Interfaces, as well as in bulk;  - a tool to consolidate laws and amendments. |
| 166 | C3.4I2  Digitalisation of the law-making process | Milestone | Digitalisation of laws & regulations in the new platform | Public announcement on the platform | - | - | - | Q4 | 2025 | All past laws and regulations have been uploaded into the new platform, so that all legislation is available online on a governmental platform. |
| 167 | C3.4I3  Economic Policy Modelling Hub | Milestone | Setting up a Modelling Hub for Economic Policy Analysis | Entry into service of the Hub | - | - | - | Q4 | 2023 | Full operationalisation and equipment of the Hub including appointment of the team of scientific staff. The team shall consist of experts on macroeconometric models, econometricians, data analytics experts and economists. |
| 168 | C3.4I3  Economic Policy Modelling Hub | Target | Number of developed impact assessment models and data analysis tools | - | Number | 0 | 20 | Q4 | 2025 | Complete development of at least 20 macro-econometric impact assessment models and new data analytics tools for the Cyprus economy based on different methodologies shall be simulated, tested and applied for economic policy analysis and forecasting. |
| 169 | C3.4R6  New legal framework for Local Authorities and relevant support measures | Milestone | New legal framework on local authorities | Provision in the law indicating the entry into force of the legislation | - |  | - | Q2 | 2024 | The intervention shall consist of the entry into force of three laws: Municipalities Law, Communities (Amending) Law and the Law on District Local Government Organisations).    The new legal framework shall entail:  - Reduction in the number of municipalities  - Creation of community clusters for the provision of services  - Transfer of new competences and funds from central government to the municipalities  - New system of financing of municipalities  - Rules on legal supervision, transparency and accountability  - Improvement of the efficiency of water supply, sewerage and solid waste management as well as permitting by creating five District Organisations for Local Administration. |
| 170 | C3.4R6  New legal framework for Local Authorities and relevant support measures | Target | Number of local authority staff participating in capacity building | - | Number | 0 | 500 | Q4 | 2024 | Completion of a series of thematic capacity building programmes for local administration, providing training to at least 500 participants (members and staff of local authorities). |
| 171 | C3.4R7  Urban land consolidation | Milestone | Entry into force of the law on urban land consolidation | Provision in the law indicating the entry into force of the law | - | - |  | Q2 | 2024 | Entry into force of the law on urban land consolidation with the aim to reduce urban sprawl through rational utilisation of existing residential areas |
| 172 | C3.4R7  Urban land consolidation | Target | Number of master plans for urban planning | - | Number | 0 | 10 | Q4 | 2025 | Master plans for urban planning have been drafted, published and approved for utilisation in selected areas or in areas of strategic significance. The master plans shall integrate and redistribute into land parcels segmented and inaccessible land (within the development limits of an area). |
| 173 | C3.4I4  Enhancing e-system for issuing building permits | Milestone | Enhancement of the e-application environment of the Hippodamos System | Applications being received through the enhanced e-application environment | - | - | - | Q4 | 2022 | Completion of the enhancement of the e-application environment of the existing Hippodamos system to enable the submission of applications for planning and building permits for all planning authorities and building authorities (municipalities) from a common platform. |
| 174 | C3.4I4  Enhancing e-system for issuing building permits | Milestone | Enhancement of planning and control and project management functionalities of Hippodamos | Fully digital process for permit issuance and construction contract management | - | - | - | Q4 | 2024 | Completion of the enhancement of the planning and control tool, project management tool and of the upgrade of the hardware and software of existing Hippodamos System to support the additional functionalities. |
| 176 | C3.4I5  Smart cities | Target | Development of mobile applications developed as part of the smart cities initiative and installation of smart sensors in service as part of the smart cities initiative | - | Mobile Applications: Number    Smart sensors: Number | Mobile Applications: 0    Smart sensors: Number  0 | Mobile Applications: 3    Smart sensors: 97 000 | Q2 | 2026 | Development of three mobile applications (for smart parking, smart lighting, smart waste management), which shall be available for download by users, and full operationalisation of at least 97 000 smart sensors as part of the smart cities initiative consisting of smart parking sensors, smart lighting sensors and smart waste management sensors delivered and installed in municipalities and connected to the central smart cities platform. |
| 177 | C3.4I6  Regeneration and Revitalisation of Nicosia Inner City | Target | Rooms renovated and converted to student dorms | - | Number | 0 | 80 | Q4 | 2024 | At least 80 rooms in Nicosia’s inner city have been renovated and converted to student dorms |
| 178 | C3.4I6  Regeneration and Revitalisation of Nicosia Inner City | Target | Rooms renovated and converted to student dorms | - | Number | 80 | 450 | Q2 | 2026 | At least 450 rooms in Nicosia’s inner city have been renovated and converted to student dorms |
| 179 | C3.4I6  Regeneration and Revitalisation of Nicosia Inner City | Milestone | Renovation of Faneromeni School | Completion of the renovation of Faneromeni school | - | - | - | Q2 | 2026 | Faneromeni School has undergone extensive renovation and complete anti-seismic upgrade to house the School of Architecture of the University of Cyprus and is ready for use |
| 180 | C3.4R8  Efficiency of Justice | Milestone | Entry into force of new Rules of Civil Procedure | Provision in new Rules of Civil Procedure (published in the Official Gazette) indicating the entry into force of the Rules of procedures (1 September 2023) | - | - | - | Q3 | 2023 | Implementation of the new Rules of Civil Procedure for the new cases submitted to the court as from 1 September 2023. The new Rules of Civil Procedure shall modernise the hearing of cases in order to deliver a less costly, more accessible and timelier service to parties. |
| 181 | C3.4R8  Efficiency of Justice | Target | Reducing the backlog of cases and appeals | - | % (Percentage) | 0 | 20 | Q2 | 2024 | Reduction of the backlog of cases and appeals pending for over two years before the District Courts and the Supreme Court by 20% from the 31 December 2020 level, as verified by an Annual Progress Report of the Action Plan to reduce backlog. |
| 182 | C3.4R8  Efficiency of Justice | Target | Further reducing the backlog of cases and appeals | - | % (Percentage) | 20 | 40 | Q2 | 2026 | Reduction of the backlog of cases and appeals pending for over two years before the District Courts and the Supreme Court by 40% from the 31 December 2020 level, as verified by an Annual Progress Report of the Action Plan to reduce backlog. |
| 183 | C3.4R9  Digital transformation of courts | Milestone | e-justice system | Verification of the contract and acceptance of the deliverables by the project teams for the two systems. Both systems available through the court’s website | - | - | - | Q1 | 2024 | Installation and full operation of the e-justice system and completion of on-site operational support of the i-justice system. Both systems shall be available through the court’s website. |
| 184 | C3.4R9  Digital transformation of courts | Milestone | Digital audio recording in court proceedings | Verification of the contract and acceptance of the deliverables by the project team for the system. | - | - | - | Q1 | 2025 | Installation and full operation of digital audio recording in court proceedings. |
| 185 | C3.4I7  Training of judges | Target | Training of judges | - | Number | 0 | 110 | Q4 | 2025 | At least 110 (out of 130) judges have completed trainings on the new Civil Procedure Rules and other judicial skills. |
| 186 | C3.4I8  Upgrading the infrastructure of courts | Milestone | Extension of the Famagusta District Court | Project management team certifies the completion of the construction. | - | - | - | Q4 | 2021 | Completion of construction of the extension to the Famagusta District Court building to support the operation of new courtrooms to try in addition to criminal also civil cases. |
| 187 | C3.4R10  Improving the legal and institutional framework for fighting corruption | Milestone | Entry into force of the law establishing the Independent Authority against Corruption | Provision of the law indicating the entry into force of the law and start of operation of the Independent Authority against Corruption with key management positions filled and staff recruited. | - | - | - | Q1 | 2022 | The Independent Authority against Corruption has been established on the basis of the entry into force of the corresponding law and is operational. The Authority shall coordinate the efforts of all bodies engaged in the fight against and prevention of corruption and shall supervise the timely implementation of actions by the different competent services. |
| 188 | C3.4R10  Improving the legal and institutional framework for fighting corruption | Milestone | Entry into force of the law on Transparency in Decision-Making and Related Matters | Provision of the law indicating the entry into force of the law | - | - | - | Q4 | 2021 | Entry into force of the law on Transparency in Decision-Making and Related Matters, including provisions to prevent conflict of interest. The law shall create the obligation to publicise contacts made between persons interested in being involved in public decision-making procedures and officials or members of the State service or of the wider public sector or with employees for the benefit of officials who, by their very position, have competence or possibility of initiating such procedures or formulating their content or contributing or determining the final outcome of such procedures. Information on such a contact, as well as its content and purposes, shall be officially recorded and be publicly available. |
| 189 | C3.4R10  Improving the legal and institutional framework for fighting corruption | Milestone | Entry into force of the law to protect whistle-blowers | Provision of the law indicating the entry into force of the law | - | - | - | Q4 | 2021 | Entry into force of a law to protect whistle-blowers reporting fraud and corruption from internal sanctions. The law shall include supplementary provisions on the protection of persons reporting acts of corruption both in the public and the private sectors (whistle-blowers, persons not involved in the acts), further to the protection already provided for in the Protection of Witnesses Law 95(I)/2001. The law shall also provide measures of leniency for those who are involved in acts of corruption, but voluntarily report to the police and/or offer cooperation with the authorities resulting in the full investigation and prosecution of the case. |

H.3. 
   Description of the reforms and investments for the loan

Investment 9 (C3.4I9): Aid Scheme for the private and public sector for certification with ISO 37001 (Anti Bribery)

The objective of the investment is to contribute to the fight against corruption by introducing to the private and public sector the accreditation ISO 37001, which shall help in increasing transparency, stamping out bribes and creating an ethical business culture.

The investment shall consist of grant support to the private and public sector, including local governments, for consulting services and certification against bribery in accordance with the standard ISO 37001.

The implementation of the investment shall be completed by 31 December 2025.

H.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 |  |
| 190 | C3.4I9  Aid Scheme for the private and public sector for certification with ISO 37001 (Anti  Bribery) | Target | ISO 37001 anti-bribery management systems | - | Number | 0 | 120 | Q4 | 2025 | At least 120 organisations are ISO accredited for the Standard “ISO 37001 ANTI-BRIBERY MANAGEMENT SYSTEMS” due of the support granted |

I. COMPONENT 3.5: Safeguarding Fiscal and Financial Stability

This component of the Cypriot recovery and resilience plan addresses the challenges of fiscal and financial vulnerabilities, including macroeconomic imbalances related thereto. The aim is to safeguard financial stability by reducing legacy risks in the banking sector, putting in place measures against high private indebtedness, and improving supervision in the non-bank sector. To ensure fiscal stability, Cyprus aims at combating tax evasion, tax avoidance and aggressive tax planning; and providing policy makers with comprehensive data in order to design a fair tax system. The envisaged measures are expected to make revenue collection more efficient and Cyprus’ tax system fairer, reducing the spill-over effects from aggressive tax planning.

The component supports addressing the Country-Specific Recommendations on financial stability and private indebtedness (Country-Specific Recommendations 2 and 5 of 2019), and on addressing features of the tax system that facilitate aggressive tax planning by individuals and multinationals (Country-Specific Recommendation 4 of 2020 and Country-Specific Recommendation 1 of 2019).

I.1. 
   Description of the reforms and investments for non-repayable financial support

Safeguarding financial stability

Reform 1 (C3.5R1): Legal Framework for crisis management for credit institutions 

The objective of the measure is to improve the resilience of the banking sector by introducing a framework for a coherent and concrete procedure for supporting credit institutions facing financial difficulties.

The reform shall consist in (i) reviewing and amending the national insolvency framework for credit institutions to increase its effectiveness and efficiency, in line with best European practices; and (ii) laying down a framework for precautionary recapitalisation of credit institutions and for government stabilisation tools for the purpose of participating in the resolution of a credit institution.

The implementation of the reform shall be completed by 30 September 2023.

Reform 2 (C3.5R2): Framework and Action Plan for addressing non-performing loans

The objective of the measure is to address financial risks related to legacy non-performing loans in the banking sector by continuing efforts to improve the asset quality of banks and strengthening the working environment for servicing of loans.

The reform shall consist in (i) implementing an action plan to address the remaining stock of legacy non-performing loans and (ii) adopting a package of three amending laws regarding credit acquiring companies and servicers (placing of loan servicers under regulation and supervision by the Central Bank; granting access for loan servicers and credit acquiring companies to the Land Registry; and aligning notification requirements in case of purchase of a loan by a credit acquiring company). A progress report on the action plan shall be prepared by 30 June 2023 and approved by the Council of Ministers, tracking the reduction of non-performing loans in the banking sector towards the indicative reference values of 6% gross and 3% net non-performing loans ratio
[10](#footnote11)
 and proposing policy measures where appropriate.

The implementation of the reform shall be completed by 30 June 2023.

Reform 3 (C3.5R3): Strategy for addressing inadequacies of the property transaction system (title deeds)

The objective of the reform is to address inefficiencies in the system of issuing and transferring title deeds, which results in property rights not being defined, complicates foreclosure procedures and hinders the liquidation of collateral.

The reform shall consist in: (i) examination of pending cases for the issuance of title deeds or rejection of the cases, (ii) extension of the new planning and building permit policy, currently up to two residential units, to four residential units in a plot, which shall reduce the time needed to issue building and spatial permits, (iii) review of the Streets and Buildings Regulation Law to introduce the right incentives for the supervising engineer to further discourage irregularities that would result in title deeds not being issued, (iv) amendment of the Sale of Property (Specific Performance) Law, which shall ensure in advance that the transfer of immovable property is executed as soon as the buyer fulfils his/her contractual obligations.

The implementation of the reform shall be completed by 31 December 2023.

Reform 4 (C3.5R4): New legal framework and system of exchange of data and credit bureau

The objective of the measure is to fight high private indebtedness by improving the assessment of credit risk for new lending through evolvement of the credit registry, to enable it to offer services such as credit scoring in full conformity with data protection rules.

The reform shall consist in amending the existing system for exchange of credit data, under which a private company owned by the Association of Cyprus Banks is the credit registry, so as to allow the provision of credit scoring services. The main elements of the amendment shall be to alleviate the legal uncertainty regarding the ownership of the system and the distinct role of the credit registry and other products offered by ARTEMIS as a credit bureau, to ensure continuation of the duty to collect data on credit facilities by credit institutions and other creditors (such as credit acquiring companies), to provide data from the Insolvency Department, and to define the terms and conditions of access to data and its protection.

The implementation of the reform shall be completed by 31 December 2024.

Reform 5 (C3.5R5): Action plan for the development of a liability monitoring register

The objective of the measure is to improve the ability of the authorities to design and implement targeted policies to prevent and manage the stock of private debt. This shall be pursued by creating a liabilities monitoring register covering the amounts of debts towards the public as well as towards credit institutions and credit acquiring companies.

The reform shall consist in implementing an action plan that shall involve the design and development of a credit liability register to generate reports for decision and policy making, including the production of person-by-person liability reports.

The implementation of the reform shall be completed by 31 December 2024.

Reform 6 (C3.5R6): Reinforcing and strengthening the insolvency framework

The objective of this reform is to strengthen the implementation of the insolvency framework, promote the use of insolvency schemes and tools, and ensure full and effective functioning of the Department of Insolvency.

The reform shall consist in (i) implementing the remaining measures and actions specified in the 2018 Action Plan that were not already implemented and (ii) setting-up digital systems necessary for improving the work of the Department of Insolvency and which promote the use of the insolvency tools. The Action Plan was approved by the Council of Ministers in 2018, and reflects the national policy for the field of insolvency. This reform shall include actions such as digitalisation of systems (enhancement of existing systems and introduction of new ones), training delivered to the staff of the Department of Insolvency, implementation of a Customer Service line and a web portal for customers, and full implementation of the regulatory framework for Insolvency Practitioners.

The implementation of the reform shall be completed by 30 June 2025.

Reform 7 (C3.5R7): Strategy for Combating Financial Illiteracy

The objective of the measure is to promote financial literacy. It aims at enhancing financial education within the general population, improve financial decision making, correct wrong attitudes and biases, support more informed and financially responsible citizens and ultimately, help improve debt repayment discipline.

The reform shall consist in preparing a strategy for combating financial illiteracy by: (i) identifying the issues of financial illiteracy (ii) reviewing the international literature on the topic, and (iii) providing an action plan for implementation. The Strategy shall include concrete goals, measurable objectives, specify the channels for promoting financial literacy and include specific actions (both short-term and long terms measures) for implementation. The reform shall also include full implementation of the short-term measures of the strategy.

The implementation of the reform shall be completed by 31 December 2023.

Reform 8 (C3.5R8): Enhancing supervision of Insurance and Pension Funds

The objective of the measure is to enhance the supervision of the insurance and pension funds.

The reform shall consist in (i) increasing the administrative capacity of the supervisory authorities, (ii) preparing and implementing the necessary tools for ensuring compliance with the regulatory frameworks conveyed to the European Insurance and Occupational Pensions Authority (EIOPA) (such as the revised Institutions for Occupational Retirement Provision (IORP II) Directive) and (iii) undertaking specific supervisory actions according to plans as conveyed to EIOPA and based on the authorities supervisory review processes, for ensuring financial stability and for protecting the interests of pension funds members and insurance policy holders.

The Department of the Registrar of Occupational Retirement Benefit Funds (RORBF) supervising the pension sector, shall increase permanent staff by 13 persons. The Insurance Companies Control Service (ICCS) supervising the insurance sector shall increase its permanent personnel by three persons.

The implementation of the reform shall be completed by 31 March 2025.

Investment 1 (C3.5I1): Enhancement of the Supervisory Function of Cyprus Securities and Exchange Commission

The objective of the measure is to enhance the supervisory capacity of Cyprus Securities and Exchange Commission (CySec) through digitalisation – allowing for better supervision of transactions.

The investment shall consist in developing an advanced digital system, based on cloud architecture, covering the supervision needs of European Market Infrastructure Regulation (EMIR), the Securities Financing Transactions Regulation (SFTR) and the Markets in Financial Instruments Regulation (MiFIR). The new system shall support the following features: (i) connect to the European Securities and Markets Authority (ESMA) hub; load and pre-process transaction data, (ii) aggregate and perform queries on data to generate regulatory insights (iii) generate on-schedule and ad-hoc reports.

The implementation of the investment shall be completed by 31 December 2023.

Safeguarding fiscal stability

Reform 9 (C3.5R9): Improving tax collection and effectiveness of the Tax Department

The objective of the measure is to make tax collection more efficient and effective, through a higher level of digitalisation and tax compliance, and improve customer service.

The reform shall consist in integrating different tax units, procedures and processes, so as to offer single point of taxpayer service, legislative changes and implementing a new IT system and digitising the Tax department. The latter shall include: (a) a single registration to the tax base and Taxisnet (for electronic submission of Income Tax Returns by Individuals, Legal Persons and Employers); (b) an integrated tax auditing process based on risk assessment; (c) an integrated refunds audit; (d) an integrated and enhanced single point of service, including the direct payment of VAT and connecting businesses to a server held within the Tax Department, without the use of specialised mechanisms; (e) a process to issue single tax clearances; (f) possibility for immediate adjustments of the system to accommodate any changes in the legislation and/or procedures and extension of secure interfaces with other information systems; (g) data analysis capabilities and (h) scanning and electronic storage of all taxpayer paper documents regarding the real estate (immovable property) and capital gains with relevant security, integrity and confidentiality parameters. The newly acquired building for the integrated Nicosia District Office and Large Taxpayers’ Office shall enhance the efforts of integrating the district tax offices in the capital, from five different office-buildings at different locations deemed technologically unsuitable previously, and allow the provision of taxpayer services from one single location in Nicosia district. The legislative changes shall include: a recently introduced legislation to implement the mandatory submission of tax returns by every natural person with income as defined in Article 5 of the Income Tax Law, regardless of the threshold starting from the tax year 2020 (subject to exceptions).

The implementation of the reform shall be completed by 31 December 2025.

Reform 10 (C3.5R10): Addressing Aggressive Tax Planning

The overall objective of the measures under the reform is to increase the effectiveness, efficiency and fairness of the tax system by combatting tax evasion and aggressive tax planning by Multinational Enterprises.

The measure shall consist in three different reform sub-measures.

The first reform sub-measure shall consist in imposing a withholding tax on outbound payments of interest, dividends and royalty payments and the introduction of a further corporate tax residency test based on the incorporation of each entity. A withholding tax shall be imposed to jurisdictions in Annex I of the EU list of non-cooperative jurisdictions on tax matters, as a first step through enactment of the Law by 31 December 2021, providing for its entry into force by 31 December 2022.

The corporate tax residency test shall be additional to the management and control test. It shall be enacted by 31 December 2021, providing for its entry into force by 31 December 2022. The first test shall be the management and control and, in cases where a company is incorporated in Cyprus but its management and control is done from another jurisdiction, it shall be considered as a Cyprus tax resident and shall be taxed in accordance with the relevant provision of the Income Tax Law, provided that the company is not a tax resident elsewhere (to avoid dual residency status).

A second reform sub-measure shall consist in introducing a withholding tax on outbound payments of interest, dividends and royalty payments to low tax jurisdictions. In respect of interest and royalty payments, the Cypriot authorities may explore instead the approach of applying non-deductibility. Such legislative change shall enter into force by 31 December 2024.

As a third reform sub-measure, Cyprus shall assess the effectiveness of the overall set of measures related to aggressive tax planning, via an independent evaluation to be completed by 31 December 2024. This evaluation shall assess the Cyprus tax framework holistically including all measures adopted by then. The evaluation shall lead to policy action to be undertaken by Cyprus to address any shortcomings identified, including in the form of legislative changes, which shall enter into force by 30 June 2026.

The implementation of the reform shall be completed by 30 June 2026.

Investment 2 (C3.5I2): Modernisation of Customs and Electronic Payment System

The objective of the measure is to develop and implement the electronic systems envisaged under the Union Customs Code. The measure is expected to simplify and expedite customs formalities and reduce the administrative cost for all stakeholders and thus make revenue collection more efficient.

The investment shall consist in developing and putting into operation twelve systems, consisting in three different types: (i) the Declaration Systems (such as Manifest, Automated Import, Transit, Automated Export and Excise Movement Control System), which shall communicate with the Operational Components, the Management Components and External Interfaces using the Integration Layer; (ii) the Operational Systems, which shall consist of the Risk Analysis, Accounting, Audit, Tariff, Customs Warehouse, Case Management, Surveillance and Quota and (iii) the Management Systems, which shall consist of the Business Rule Management, Business Process Management, Reference Data Management, Internal IAM and Reporting.

The implementation of the investment shall be completed by 31 December 2025.

I.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 |  |
| 191 | C3.5R1 Completing the legal framework for Crisis Management for Credit Institutions | Milestone | Entry into force of the amendment of the national insolvency framework for credit institutions, and introduction of government tools for preservation of financial stability | Provision in the laws indicating their entry into force of the | - | - | - | Q3 | 2023 | Entry into force of the following two legislative packages:  (a) the 'Insolvency of Credit Institutions' law which shall introduce flexibility and necessary tools to competent authorities for the effective liquidation of insolvent credit institutions and (b) the Financial Stability Law and Financial Support under Resolution Law, which shall lay the framework for government intervention, in particular through precautionary recapitalisation of a credit institution and through government stabilisation tools for the purpose of participating in the resolution of an institution. |
| 192 | C3.5R2 Framework and Action Plan for addressing NPLs | Milestone | Entry into force of the package of amending laws regarding credit acquiring companies (CAC) and credit servicers to improve the working environment for non-performing loans management | Provision in the law indicating the entry into force of the respective laws | - | - | - | Q4 | 2021 | Entry into force of the following three laws:     (a) The Credit Facilities Purchase and Related Matters (Amending) Law of 2021, which shall put non-performing loan servicers under regulation and supervision by the Central Bank;     (b) The Immovable Property (Transfer, Registration and Valuation) (Amending) Law of 2021, which shall give access for non-performing loan servicers and credit acquiring companies to the Land Registry     (c) Evidence (Amending) Law 2020, which shall align notification requirements in case of purchase of a loan by a credit acquiring company. |
| 193 | C3.5R3  Strategy for addressing inadequacies of the property transaction system (title deeds) | Target | Reduction of backlog of cases for issuance of title deed either by issuing title deeds or by rejecting the case | - | % (Percentage) | 0 | 80 | Q2 | 2023 | Reduction of backlog of pending cases for issuance of title deeds either by issuing title deeds (the legal document constituting the evidence of a right to the ownership of a property) or by rejecting the case. Title deeds for 1 050 developments are pending for assesment, corresponding to 20 000 title deeds. Of this total of 20 000 pending title deeds, 80% shall be resolved resulting either to the issuance of title deeds or to a rejection of the case. |
| 194 | C3.5R3  Strategy for addressing inadequacies of the property transaction system (title deeds) | Milestone | Extension of the New Planning and Building Permit Policy | Decree issued by the Minister of Interior | - | - | - | Q4 | 2022 | Extension of the New Planning and Building Permit Policy for up to four residential units in residential plots. The Policy provides the possibility to submit applications electronically and introduces fixed deadlines to grant planning and building permits (ten to twenty days). |
| 195 | C3.5R3  Strategy for addressing inadequacies of the property transaction system (title deeds) | Milestone | Entry into force of the amendment of the Sale of Property (Specific Performance) Law | Provision in the law indicating the entry into force of the amended Sale of Property (Specific Performance) Law | - | - | - | Q4 | 2022 | Entry into force of the amended Sale of Property (Specific Performance) Law to safeguard the buyers interests in advance. The amendment shall allow for transfer of Title Deeds, under full safety and legal certainty, while minimizing operational costs and delays through checks at a preliminary stage to identify specific obstacles to the transfer before the payment of the purchase price. The aim is to create a mechanism to safeguard the interests of the buyers of immovable property and ensure in advance that the transfer of immovable property shall be executed as soon as the buyer fulfils his/her contractual obligations. |
| 196 | C3.5R3  Strategy for addressing inadequacies of the property transaction system (title deeds) | Milestone | Review of the Streets and Building Regulation | Provision in the law indicating the entry into force of the amended Streets and Building Regulation | - | - | - | Q4 | 2023 | Entry into force of the law amending the Streets and Building Regulation which shall introduce the right incentives for the supervising engineer to (i) oversee the project development in accordance with the permit issued, to further discourage irregularities that would result in title deeds not being issued and (ii) submit to the competent authority a certificate confirming the completion of work in line with the permit issued. |
| 197 | C3.5R4  New legal framework and system of exchange of data and credit bureau | Milestone | Entry into force of the framework and system of exchange of data legislation | Provision in the legislation indicating the entry into force of the legislation | - | - | - | Q1 | 2023 | Entry into force of the legislation on the framework and system of exchange of data by ARTEMIS credit bureau, which shall eliminate impediments in the current framework so as to allow it to provide credit scoring services. The main elements of the amendment shall be to broaden the supervisory role of the Central Bank of Cyprus, to maintain a duty to collect data for credit facilities by credit institutions and other creditors, to provide Insolvency Department data, and to define the terms and conditions of access to data and its protection. |
| 198 | C3.5R4  New legal framework and system of exchange of data and credit bureau | Milestone | Upgraded digital system of exchange of data and credit bureau | Successful Production of Credit Scores | - | - | - | Q4 | 2024 | Full implementation and entry into service of the upgraded digital system of exchange of data by ARTEMIS credit bureau in accordance with the legislation on the framework and system of exchange of data, and start of provision of credit scores services. |
| 199 | C3.5R5  Action plan for the development of a liability monitoring register | Milestone | Action Plan for the development of a liability monitoring register | Approval of the Action Plan by the Council of Ministers | - | - | - | Q4 | 2022 | The Action Plan shall put forward the necessary steps for introducing the liability monitor register that shall:    - utilise an electronic database, collecting data on liabilities from various public and private creditors, such as the credit registry under reform C3.5R4.    - enable the design and implementation of targeted policies for preventing and managing private indebtedness. |
| 200 | C3.5R5  Action plan for the development of a liability monitoring register | Milestone | Action plan for the development of a liability monitoring register | Confirmation by the Council of Ministers on the implementation of the Action plan | - | - | - | Q4 | 2024 | Full implementation of Action Plan for the development of a liability monitoring register that shall  - utilise an electronic database, collecting data on liabilities from various public and private creditors, such as the credit registry under reform C3.5R4    - enable the design and implementation of targeted policies for preventing and managing private indebtedness. |
| 201 | C3.5R6 Reinforcing and strengthening the insolvency framework | Milestone | Full implementation and full operation of the legal and institutional framework for insolvency | Appointment of staff confirmed by the Official Gazette. Council of Ministers’ approval of the Progress Report | - | - | - | Q4 | 2022 | Full implementation and full operation of the legal and institutional framework on insolvency through: (a) appointment of staff for all levels of the organisational structure of the Department of Insolvency, and delivery of trainings for the personnel, (b) establishment of a communication plan for promoting insolvency proceedings, (c) approval of a customer service line, (d) establishment of a framework for continuous professional development for insolvency Practitioners. |
| 202 | C3.5R6 Reinforcing and strengthening the insolvency framework | Milestone | Operation of all digital systems developed for the Department of Insolvency | Approval of the Progress Report by the Council of Ministers | - | - | - | Q2 | 2025 | The new digital systems shall increase the relevance and efficiency of the existing operational and technical systems of the Department of Insolvency. |
| 203 | C3.5R7  Strategy for Combating Financial Illiteracy | Milestone | Strategy for Combating Financial Illiteracy | Approval of the Strategy for Combating Financial Illiteracy by the Council of Ministers | - | - | - | Q4 | 2023 | The Strategy for Combating Financial Illiteracy shall include concrete goals, measurable objectives, specify the channels for promoting financial literacy and include specific actions for implementation (both short-term and long terms measures). The reform shall also include full implementation of the short-term measures of the strategy. |
| 204 | C3.5R8 Enhancing supervision of Insurance and Pension Funds | Target | Strengthening the human resources of the Registrar of Occupational Retirement Benefits Fund (RORBF) and the Insurance Companies Control Service (ICCS) | - | Number | 0 | 16 | Q1 | 2025 | Increase staff by thirteen employees for the Registrar of Occupational Retirement Benefit Funds (RORBF) and by three employees for the Insurance Companies Control Service (ICCS). This shall be a permanent increase in staff. |
| 205 | C3.5R8 Enhancing supervision of Insurance and Pension Funds | Milestone | Supervisory tools including data collection and analysis tool | Support tools for enhancing the supervision of pension funds and insurance companies | - | - | - | Q4 | 2023 | Full implementation of tools (such as procedures, checklists, fitness and propriety applications) necessary for compliance with new legislation (providing for the establishment, activities and supervision of Institutions for Occupational Retirement Benefits Law of 2020 -L 10(I)/2020 and the legislation of the Insurance and Reinsurance Business and Other Related Issues Law of 2016 (Ν.38(Ι)/2016. |
| 206 | C3.5I1 Enhancement of the Supervisory Function of the Cyprus Securities and Exchange Commission | Milestone | Digital system for supervision of transactions for the Cyprus Securities and Exchange Commission | Project management committee verifies acceptance of deliverables in due time; and quality and standards as specified in tender documents | - | - | - | Q4 | 2023 | Full implementation of a new digital system of supervision of transactions. The new digital system shall have the following features:    - Loading and pre-processing of Transaction data.    - Aggregations and queries on data to generate regulatory insights.    - Generation of on-schedule and ad-hoc reports. |
| 207a | C3.5R9 Improving tax collection and effectiveness of the Tax Department | Milestone | Operation of VAT Services within an Integrated Tax Administration System (ITAS) | Project Board Approval of the Project Deliverables for completion, installation and operation of a new integrated VAT System | - | - | - | Q1 | 2022 | The Cyprus Tax Department (CTD) shall put into operation an Integrated Tax Administration System (ITAS) that shall support the tax administration functionalities and processes. The functionalities related to the VAT Services shall be completed and operational within this system. |
| 207b | C3.5R9 Improving tax collection and effectiveness of the Tax Department | Milestone | Purchase of the new building for the integrated Nicosia District Office and Large Taxpayers’ Office | Completion of the purchase and start of operations |  |  |  | Q3 | 2023 | The new building for the integrated Nicosia District Office and Large Taxpayers’ Office has been purchased. |
| 208 | C3.5R9 Improving tax collection and effectiveness of the Tax Department | Milestone | Integration of operations of the direct tax administration department within the ITAS | Project Board approval of the System Deliverables for completion installation and operation of ITAS for direct taxes and go-live acceptance report | - | - | - | Q2 | 2024 | The tax administration services related to direct taxes of natural and legal persons (in addition to VAT) shall be operational within the ITAS. |
| 209 | C3.5R10 Addressing Aggressive Tax Planning | Milestone | Entry into force of the law to tackle aggressive tax planning | Provision in the law indicating the entry into force of the law | - | - | - | Q4 | 2022 | Entry into force of a law to tackle aggressive tax planning by (a) imposing a withholding tax on interest, dividends and royalty payments to jurisdictions included in Annex I of the Council conclusions on the revised EU list of non-cooperative jurisdictions for tax purposes and (b) introduction of a further corporate tax residency test based on the incorporation of each entity. |
| 210 | C3.5R10 Addressing Aggressive Tax Planning | Milestone | Entry into force of the law to tackle aggressive tax planning via payments to low tax jurisdictions | Provision in the law indicating the entry into force of the law | - | - | - | Q4 | 2024 | Entry into force of a law to tackle aggressive tax planning via payments to low tax jurisdictions by introducing a withholding tax on interest, dividends, and royalty payments to low tax jurisdictions. In respect of interest and royalty payments, the Cypriot authorities may explore instead the approach of applying non-deductibility. |
| 211 | C3.5R10 Addressing Aggressive Tax Planning | Milestone | Entry into force of legislative changes addressing the findings of an independent evaluation on the effectiveness of measures related to aggressive tax planning | Provision in the law indicating the entry into force of the law | - | - | - | Q2 | 2026 | Cyprus shall assess the effectiveness of the overall set of measures related to aggressive tax planning, via an independent evaluation to be completed by 31 December 2024. This evaluation shall assess the Cyprus tax framework holistically including all measures adopted by then. The evaluation shall lead to policy action to be undertaken by Cyprus including in the form of legislative changes to address any shortcomings identified. |
| 212 | C3.5I2 Modernisation of Customs and Electronic Payment System | Target | Putting into operation the information systems– envisaged under the Union Customs Code (UCC) | - | Number | 0 | 2 | Q4 | 2023 | At least two of the following import-related information systems have been completed, installed and put into operation:  1. Automated Export System    2. New Computerised Transit System    3. EU Single Window    4. Union Customs Code     5. Guarantee Management  6. Union Customs Code     7. SURVEILLANCE 3    8. Union Customs Code - Import Control System 2    9. Import Applications under the Union Customs Code    10. Customs Union Performance – Management Information System     11. Union Customs Code Proof of Union Status    12. Uniform User Management and Digital Signature |
| 213 | C3.5I2 Modernisation of Customs and Electronic Payment System | Target | Putting into operation of the information systems envisaged under the UCC | - | Number | 2 | 12 | Q4 | 2025 | The 12 information systems have been completed, installed and put into operation |

J. COMPONENT 4.1: Upgrade infrastructure for connectivity

This component of the Cypriot recovery and resilience plan contributes to addressing infrastructure challenges in the area of data connectivity, in particular in rural areas, with a view to narrowing the rural-urban divide, as well as differences along gender, age, income and education.

The objective of the component is to enhance access to communication infrastructure for all citizens, thus bridging the digital divide and supporting an inclusive digital transformation.

The component addresses the country-specific recommendation on investment in the digital transition and the digitalisation (Country-Specific Recommendation 4 of 2019 and Country-Specific Recommendation 3 of 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).

J.1. 
   Description of the reforms and investments for non-repayable financial support

Reform 1 (C4.1R1): Empower the National Regulatory Authority (OCECPR)

The objective of the measure is to facilitate and accelerate investments in Very High Capacity Networks (VHCN) in underserved areas by providing stakeholders with the relevant information to improve transparency and enhance the incentives for market operators to invest faster in VHCN, thereby increasing connectivity in Cyprus.

The reform consists in providing the proper tools, through the adoption of secondary legislation, to the Office of the Commissioner of Electronic Communications and Postal Regulation (OCECPR) to launch a survey in order to collect geographical data on electronic communication networks. The data shall then be accessible through a web portal providing detailed information regarding network roll-out in areas where it is needed. This is expected to help bridge the gap with private investments for VHCN.

The implementation of the reform shall be completed by 31 December 2024.

Reform 2 (C4.1R2): Empower the National Broadband Competence Office (DEC of the DMRIDP)

The objective of the measure is to facilitate the build-up of VHCN infrastructure by simplifying the necessary administrative procedures for its deployment while implementing the Connectivity Toolbox Recommendation (set of best practices for reducing the cost of deploying electronic communications networks and for efficient access to 5G radio spectrum).

The reform consists in identifying the administrative bottlenecks and barriers to the rapid deployment of VHCN and possible measures to address them. It shall be followed-up by the entry into force of legislation to effectively address such bottlenecks and barriers.

The implementation of the reform shall be completed by 30 June 2024.

Investment 1 (C4.1I1): Expansion of Very High-Capacity Networks in underserved areas

The objective of the measure is to improve connectivity with VHCN (such as fibre and 5G), by supporting the build-up of VHCN in areas of no private interest and thereby addressing territorial disparities of broadband availability. 

The investment consists in organising public tenders through an open tender procedure addressed to telecom operators to select contractors that shall undertake the design, construction and operation of the network, as well as part of the financing. The geographical territory of the Republic of Cyprus which is under the control of the Government of Cyprus is expected to be divided into three lots. The maximum amount of public financial contribution shall be set separately for each lot, and award criteria are expected to include the requested public support as well as the price offered to end-users and to other retail operators. Wholesale obligations shall be imposed to the contractors.

The implementation of the investment shall be completed by 31 December 2025.

Investment 2 (C4.1I2): Upgrade internet connection to be “Gigabit-ready” and promote connectivity take-up

The objectives of the measure are to encourage the digital transition through support of widespread take-up of VHCN.

The investment consists in the implementation of a demand subsidy (voucher) scheme, addressed exclusively to physical persons (i.e. excluding enterprises), encouraging them to proceed with the upgrade of their internet connection by subscribing to a Gigabit ready internet service. It applies to single tenant units, as well as apartments in multi-dwelling buildings with no connection capable of supporting very high capacity services. The voucher value per premise shall be fixed. End-users shall be able to select a service provider and the technology of their choice to upgrade the connection. After the upgrade of the connection, installers shall upload in the IT system the “Gigabit-ready” certificate for the household, along with the acceptance form signed by the owner/tenant who issued the voucher, thus triggering redemption of the voucher.

The implementation of the investment shall be completed by 30 June 2025.

J.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 |  |
| 214 | C4.1R1  Empower the National Regulatory Authority (OCECPR) | Milestone | Launch of the geographical survey and entry into force of secondary legislation | Entry into force of the secondary legislation and launch of the survey | - | - | - | Q1 | 2022 | The secondary legislation shall enter into force and cover the main aspects related to the survey such as the type, the degree of analysis and the form of the required information, as well as the persons from whom the required information is requested.  Launch of the geographical survey of the reach of electronic networks capable of delivering broadband networks and physical infrastructures based on Article 22 of the European Electronic Communications Code. |
| 215 | C4.1R1  Empower the National Regulatory Authority (OCECPR) | Milestone | The web portal on broadband and infrastructure mapping is operational and accessible to the target audience | The web portal on broadband and infrastructure mapping is accessible | - | - | - | Q4 | 2024 | The web portal on broadband and infrastructure mapping is completed, tested, operational and accessible to the target audience (such as the Office of the Commissioner for Electronic Communications and Postal Regulation, Public Authorities, Electronic Communication Network Operators and end-users). |
| 216 | C4.1R2  Empower the National Broadband Competence Office (DEC of the DMRIDP) | Milestone | Entry into force of the administrative acts for very high capacity networks’ deployment | Provision in the administrative acts indicating the entry into force of the respective acts | - | - | - | Q2 | 2024 | Entry into force of the administrative acts that shall effectively streamline and reduce administrative barriers (such as shortening permit granting procedures and lowering fees as well as facilitating access to physical infrastructure) for the deployment of very high capacity networks in line with the Connectivity Toolbox Recommendation (including a set of best practices for reducing the cost of deploying electronic communications networks and for efficient access to 5G radio spectrum). |
| 217 | C4.1I1  Expansion of Very High Capacity Networks in underserved areas | Milestone | Start of very high capacity networks’ deployment in underserved areas | Signed contracts with contractors to deploy very high capacity networks in areas of no interest to private very high capacity network investors | - | - | - | Q4 | 2023 | Contracts have been signed with contractors, which shall have been selected through an open tender procedure, to deploy very high capacity networks (in particular, fixed and mobile (5G) networks offering a download speed of at least 100Mbps, which shall be readily upgradable to Gigabit for fixed access) in areas of no interest to private very high capacity network investors. |
| 218 | C4.1I1  Expansion of Very High Capacity Networks in underserved areas | Target | Expansion of very high capacity networks’ deployment in underserved areas | - | Number | 0 | 10 000 | Q4 | 2024 | At least 10 000 premises in areas of no interest to private very high capacity network investors are covered by very high capacity networks with fixed or mobile (5G) network, offering a download speed of at least 100Mbps, which shall be readily upgradable to Gigabit (for fixed networks). |
| 219 | C4.1I1  Expansion of Very High Capacity Networks in underserved areas | Target | Completion of very high capacity networks’ deployment in underserved areas | - | Number | 10 000 | 44 000 | Q4 | 2025 | At least 44 000 premises in areas of no interest to private very high capacity network investors are covered by very high capacity networks with fixed or mobile (5G) network, offering a download speed of at least 100Mbps, which shall be readily upgradable to Gigabit (for fixed networks). |
| 220 | C4.1I2  Upgrade internet connection to be “Gigabit-ready” and promote connectivity take-up | Target | Expansion of Gigabit-ready internet connection take-up by households | - | Number | 0 | 24 300 | Q2 | 2023 | Internet connection has been upgraded to be able to support provision of Gigabit connectivity in at least 24 300 homes. |
| 221 | C4.1I2  Upgrade internet connection to be “Gigabit-ready” and promote connectivity take-up | Target | Completion of Gigabit-ready internet connection take-up by households | - | Number | 24 300 | 82 000 | Q2 | 2025 | Internet connection has been upgraded to be able to support provision of gigabit connectivity in at least 82 000 homes. |

K. COMPONENT 4.2: Promote e-government

This component of the Cypriot recovery and resilience plancontributes to accelerating the digital transformation of Cyprus through the digitalisation of government services enhancing the efficiency and the provision of online, secure and prompt services to citizens, in a user friendly, efficient and effective way. This is expected to facilitate the interaction between citizens and the public services, without the need for physical presence.

The objective of the component is to build a secured, integrated and modern digital architecture to achieve the transformation to a digital government.

The component addresses the country-specific recommendation on investment in the digital transition and the digitalisation (Country-Specific Recommendation 4 of 2019 and Country-Specific Recommendation 3 of 2020).

K.1. 
   Description of the reforms and investments for non-repayable financial support

Reform 1 (C4.2R1): Digital Services Factory (DSF)

The objective of the measure is to build a new Service Delivery Model for the development of end-to-end quality digital services to the public, in a user-friendly, efficient and effective way that shall ultimately facilitate the interaction with public services, without the need for physical presence.

The reform shall consist in designing and developing this new delivery model, the DSF. First, the project shall (i) set up the core team of the DSF (comprised of experts of different specialties with the appropriate skills and qualifications), (ii) define the standards and procedures for the development of digital services, and (iii) build and develop a number of digital services. Second, using the methodologies defined, digital services shall be developed in an industrialised fashion, in cooperation with the private sector. Services shall be provided securely to citizens through a single government website portal Gov.Cy. Single sign-on and digital identity are expected to be the basic key enablers for the secure provision of eServices. Furthermore, existing common mechanisms like ‘ePayment’ offering several methods of payments (such as visa, instant payments and direct banking) and ‘notification’ (such as SMS, email) are expected to be utilised.

The implementation of the reform shall be completed by 30 June 2026.

Reform 2 (C4.2R2): Definition and implementation of a new cloud policy with regard to government IT systems and services

The objective of the measure is to elaborate the cloud policy of the government, notably the data classification, data residency, the hosting and operation of the government IT systems either in a public cloud or in a government private cloud (G-Cloud) environment.

The reform shall consist in setting up the G-Cloud to host the IT systems and digital services of certain government departments / ministries (such as the registrar of companies system, the customs system and the tax department system). Two local data centres shall be acquired through rental, while consultancy services as well as training shall be acquired for the development of the G-Cloud. A tender for the development and operation of the G-Cloud environment is also expected to be issued.

The implementation of the reform shall be completed by 31 December 2025.

Reform 3 (C4.2R3): Police procedures digitalisation (“Digipol”)

The objective of the measure is to eliminate the use of paper procedures and physical presence of the citizens by moving to digitalised procedures for the Cyprus Police Force. This is expected to be beneficial for both citizens and police officers as procedures shall be simplified and efficient.

The reform shall consist in the creation of a new platform (Digipol) of demands for police procedures and services for citizens to achieve remote communications. Both citizens and police officers shall make use of it. To maximise the uptake, trainings (such as online courses, videos, step-by-step guides) for police officers as well as for citizens shall be organised to help transitioning to online services.

The implementation of the reform shall be completed by 30 September 2025.

Reform 4 (C4.2R4): Setting up the beneficial ownership registry

The objective of the measure is to set up the register for the submission of the data of beneficial owners of all corporate and other legal entities. Such registration shall improve corporate trust and transparency in Cyprus by making it clear who ultimately owns and controls companies and other legal entities.

The reform shall consist in setting up the register. Currently, an online platform has been developed as an interim solution but its functionalities are limited. The reform shall result in a solution with all necessary functionalities to support the maintenance of the register and management of relevant information (such as sending out notifications for updating, enforcement of late filing fees, search facilities with prescribed levels of access). This is expected to support the registration of the data of beneficial owners of all corporate and other legal entities and achieve interconnection with the beneficial ownership registers of other Member States.

The implementation of the reform shall be completed by 31 December 2023.

Investment 1 (C4.2I1): Digitalisation in various central government ministries/services

The objective of the measure is to digitalise key workflows in a number of ministries and central government services, to improve efficiency in the delivery of government services, simplify compliance with government regulations, strengthen citizen participation and trust in government, and yield cost savings.

The investment shall consist in digitalisation in the following ministries, deputy Ministries or services of the government: (i) Road Transport Department of the Ministry of Transport, Communication and Works, (ii) Deputy Ministry of Shipping, (iii) Ministry of Foreign Affairs, (iv) Directorate General Growth and (v) Department of Town Planning and Housing of the Ministry of Interior (for Architectural Heritage). Digitalisation of the Directorate General Growth shall include development of a transitory repository system and of a final dedicated Monitoring Information System for recording and storing the relevant data related to the implementation of the recovery and resilience plan (in particular on the achievement of milestones and targets, data on final recipients, contractors, subcontractors and beneficial owners).

The implementation of the investment shall be completed by 31 December 2025.

Investment 2 (C4.2I2): Digitalisation of the Cyprus Ports Authority

The objective of the measure is to digitalise key processes in the Cyprus Ports Authority (CPA) to improve their efficiency and effectiveness, including communications between vessels and the relevant authorities and improvements to monitoring vessel traffic in Cyprus waters. The latter is to ensure the safe navigation of vessels, reduce the risk of environmental damages due to spills from accidents and reduce vessel emissions by plotting more efficient routes.

The investment shall consist of (i) several upgrades to the CPA’s network infrastructure, hardware and software, and server capacity; (ii) incorporation of new HR Management Systems to automate procedures; (iii) overhaul of the existing Port Community System to increase the efficiency of the maritime transport sector and to reduce administrative burdens; and (iv) installation of Vessel Traffic Control Stations at the Ports of Larnaca and Vassiliko (in addition to the existing one in Limassol port).

The implementation of the investment shall be completed by 31 December 2025.

K.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 and clear definition of each milestone and target |
|  |  |  |  |  | Unit of measure | Baseline | Goal | Quarter | Year |  |
| 224 | C4.2R1  Digital Services Factory | Milestone | Definition of the Service Delivery Model for the Digital Services Factory | Appointment decision of the Deputy Minister of Research, Innovation and Digital Policy establishing the team; publication of the standards on the website of the Deputy Ministry | - | - | - | Q4 | 2022 | The Service Delivery Model for the Digital Services Factory has been defined so as to enable the efficient provision of high-quality and user-friendly digital services to the public. This shall include: (a) the establishment of the core Digital Services Factory team (including the procurement of services of experts from the private sector), and (b) definition of the standards and procedures for the development of digital services. |
| 225 | C4.2R1  Digital Services Factory | Target | Expansion of delivery of government services online through the Digital Services Factory | - | Number | 0 | 20 | Q4 | 2023 | Digitalisation and delivery online of at least 20 previously non-digital services to the public through the Digital Services Factory, using the defined Service Delivery Model (under milestone with a sequential number 224) and agile methodologies. |
| 226 | C4.2R1  Digital Services Factory | Target | Delivery online of at least 70 previously non-digital services to the public through the Digital Services Factory | - | Number | 20 | 70 | Q2 | 2026 | Digitalisation and delivery online of at least 70 previously non-digital services to the public through the Digital Services Factory, using the defined Service Delivery Model (under milestone with a sequential number 224) and agile methodologies. |
| 227 | C4.2R2  Definition and implementation of a new cloud policy with regard to government IT systems and services | Milestone | The government cloud (G-cloud) is operational | Services migrated to G-cloud | - | - | - | Q4 | 2024 | G-cloud is operational, providing cloud services for data storage to at least the Registrar of Companies, the Digital Services Factory, and the customs system. These three services have been migrated to the G-cloud and are no longer using the old IT system. |
| 228 | C4.2R2  Definition and implementation of a new cloud policy with regard to government IT systems and services | Target | The government cloud (G-cloud) in two data centres is operational and offering cloud services | - | Number | 0 | 2 | Q4 | 2025 | G-cloud in two new data centres shall be fully operational, including the premises, hardware and software, and offer cloud services to governmental IT systems. |
| 229 | C4.2R3  Police Procedures digitalisation Digipol | Milestone | Digipol prototype operational | Declaration by Cyprus Police confirming that the prototype platform (Digipol) is operational | - | - | - | Q2 | 2023 | The prototype platform (Digipol) is operational. Police officers shall be the users and have access to the prototype Digipol for familiarity and training purposes. |
| 230 | C4.2R3  Police Procedures digitalisation Digipol | Target | Citizens use Digipol | - | Number | 0 | 500 | Q3 | 2025 | Digipol shall be accessible online through the Cyprus Police ICT infrastructure. At least 500 citizens have used one or more of the services available on the Digipol platform for citizens. |
| 231 | C4.2R4  Setting up the beneficial ownership registry | Milestone | Beneficial ownership registry available for use | Beneficial ownership registry publicly available online at national and European Level | - | - | - | Q4 | 2023 | The beneficial ownership registry shall be deployed and become available for use at national level and European level, enabling users to check the ultimate beneficial ownership information of legal entities and to achieve interconnection of the beneficiary ownership registers with other Member States. |
| 232 | C4.2I1  Digitalisation in various Central Government Ministries - Services | Milestone | Repository system for audit and control: information for monitoring implementation of RRF | An audit report confirming repository system functionalities | - | - | - | Q1 | 2022 | A repository system for monitoring the implementation of the RRF shall be in place and operational. The system shall include, as a minimum, the following functionalities:  (1) collection of data and monitoring of the achievement of milestones and targets; (2) collect, store and ensure access to the data required by Article 22(2)(d) (i) to (iii) of Regulation (EU) 2021/241. |
| 233 | C4.2I1  Digitalisation in various Central Government Ministries - Services | Target | Start of the digital upgrade of a number of central government ministries and departments | - | Number | 0 | 4 | Q1 | 2022 | The contracts with providers selected through public procurement procedures have been signed to digitalise/digitally upgrade at least four of the following central government ministries/departments:    1. Road Transport Department of the Ministry of Transport, Communication and Works,     2. Deputy Ministry of Shipping.    3. Ministry of Foreign Affairs     4. Directorate General Growth    5. Department of Town Planning and Housing of the Ministry of Interior (for Architectural Heritage). |
| 234 | C4.2I1  Digitalisation in various Central Government Ministries - Services | Target | Advancement of the digital upgrade of a number of central government ministries and departments | - | Number | 0 | 2 | Q4 | 2024 | Development completed and systems put into operation for two government ministries/departments from the list in target with sequential number 233. |
| 235 | C4.2I1  Digitalisation in various Central Government Ministries - Services | Target | Finalisation of the digital upgrade of a number of central government ministries and departments | - | Number | 2 | 5 | Q4 | 2025 | Development completed and systems put in operation for all five government ministries/departments from the list in target with sequential number 233. |
| 236 | C4.2I2  Digitalisation of the Cyprus Ports Authority | Target | Start of the digital upgrade of the Cyprus Ports Authority | - | Number | 0 | 4 | Q2 | 2023 | The contracts with providers selected through a public procurement procedure have been signed to develop/upgrade at least four of the following seven systems for the Cyprus Ports Authority:    1. Upgrade of the Port Community System;    2. Installation of VTS Station;    3. Digitisation of CPA archives;    4. Upgrade of IT infrastructure (such as network, switches);    5. Update IS systems;    6. Installation of an HR Management System;    7. Upgrade CPA Servers;      and contracts have been signed to develop the following e-service:      • monitoring and safety of navigation to and from the ports of Larnaca and Vasiliko. |
| 237 | C4.2I2  Digitalisation of the Cyprus Ports Authority | Target | Advancement of the digital upgrade of the Cyprus Ports Authority | - | Number | 0 | 4 | Q4 | 2024 | Finalisation and installation of at least four of the systems from the list in target with sequential number 236 for all relevant ports. |
| 238 | C4.2I2  Digitalisation of the Cyprus Ports Authority | Target | Finalisation of the digital upgrade of the Cyprus Ports Authority | - | Number | 4 | 7 | Q4 | 2025 | All of the seven systems from the list in target with sequential number 236 for all relevant ports are installed and operational, with all hardware/equipment installed and set up and • administrative and reporting formalities between ships arriving and/or departing from the Republic of Cyprus;  • monitoring and safety of navigation to and from the ports of Larnaca and Vasiliko. |

L. COMPONENT 5.1: Educational system modernisation, upskilling and retraining

This component of the Cypriot Recovery and Resilience plan addresses the challenges of low participation in vocational education and training (VET) and lifelong learning, rising skills mismatches (particularly among young graduates) and poor digital skills. It further addresses the quality of teaching and the availability and affordability of early childhood education and care (ECEC) for children aged four years old. Its objective is to (i) improve the quality and effectiveness of education and training at all levels, (ii) foster the uptake of labour market-relevant reskilling and upskilling opportunities, in particular regarding the twin transitions, across society regardless of employment status, skills level or age, and (iii) modernise the school structures making them fit for the digital transition.

The reforms and investments included in the component address the country-specific recommendations on education and skills (country-specific recommendation 2 2020 and country-specific recommendation 3 2019), early childhood education and care (country-specific recommendation 3 2019) as well as on digital skills (country-specific recommendation 4 2019 and country-specific recommendation 3 2020).

L.1. 
   Description of the reforms and investments for non-repayable financial support

Reform 1 (C5.1R1): Addressing skills mismatch between education and labour market (Secondary and Higher Education)

The objective of the reform is to address the skills mismatch between the labour market and the secondary and higher education system.

For this purpose, key initiatives of the National Action Plan shall be implemented including the introduction of (i) a higher education graduate tracking system, (ii) a reform of secondary schools’ educational curricula to improve soft and entrepreneurial skills, (iii) an in-job shadowing programme for secondary general education pupils, and (iv) new programmes of study in secondary general as well as vocational education and training tailored to labour market needs. It shall further entail the provision of high-quality training to secondary education teaching staff in close collaboration with labour market experts as well as the upgrading of school laboratories with the latest technology and equipment.

The implementation of the reform shall be completed by 31 December 2025.

Reform 2 (C5.1R2): A new teacher and school evaluation system

The aim of the reform is to improve the quality of education and consequently students’ educational outcomes.

This reform shall modernise and update the current teachers and schools evaluation system by developing a single evaluation scheme for primary, secondary and technical and vocational education with differentiated elements. This contemporary evaluation system of schools and teachers shall incorporate the training of teachers and evaluators.

The implementation of the reform shall be completed by 31 December 2025.

Reform 3 (C5.1R3): Gradual extension of free compulsory pre-primary education from the age of four

The objective of this reform is to enhance the availability and affordability of early childhood education and care (ECEC) promoting the (re-)entry of people with childcare responsibilities, mostly women, into the labour market as well as children’s educational outcomes and social inclusion.

It shall include the entry into force of a law providing for the gradual eight-month reduction of the entry age in free compulsory pre-primary education (from current entry age of four years and eight months to four years) starting in the academic year 2024-2025 until academic year 2032-2033.  

The reform shall consist of the following: (i) gradual expansion of public kindergartens’ capacity; (ii) an aid scheme to subsidise in full the tuition fees of communal kindergartens for children at the entry age in free compulsory pre-primary education; (iii) an aid scheme which shall subsidise the tuition fees for children above 4 years old and under the entry age in compulsory pre-primary education and are enrolled in private kindergartens up to a maximum of 100% subject to a cap. The legislative reform shall be gradually implemented in line with the adopted law. An Action Plan shall indicate how the reform is implemented, through the gradual expansion of the capacity in public kindergartens and the gradual corresponding reduction of the two aid schemes from the time of the entry into force of the law until the completion of the decrease in compulsory age. 

By 30 June 2026, the reform shall provide free and compulsory pre-primary education to children as of the age of 4 years and 5 months and subsidise tuition fees for children between the age 4 years and 4 years and 5 months enrolled in private kindergartens.

Reform 4 (C5.1R4): Digital transformation of school units with the aim of enhancing digital skills and skills related to STEM education

The aim of the reform is to support the digital transition of the education system.

This measure shall entail the modernisation of educational structures through the development of e-classes and the equipment of classrooms with digital tools, the transformation of curricula and educational material to enhance digital skills and STEM methodology, as well as the relieving of costs for the purchase of digital equipment (laptops/tablets) for students from low socio-economic background. It shall further include the provision of digital skills and STEM methodology training to at least 675 (out of which 300 primary, 300 secondary general and 75 secondary vocational teachers) teachers per year for 5 years (in total at least 3 375 teachers which accounts for around 32% of all teachers (primary and secondary)).

The implementation of the reform shall be completed by 30 June 2026.

Reform 5 (C5.1R5): E-skills Action Plan – Implementation of specific actions

This measure aims at enhancing digital competences across all population groups.

It shall include the (i) development of an e-skills policy framework and action plan, (ii) the design and delivery of targeted programmes for public sector professionals promoting cross-sectoral competencies, as well as (iii) the design of reskilling/upskilling interventions enhancing the digital literacy of the workforce in the private sector and unemployed persons, with a special focus on women and vulnerable groups. Furthermore, this measure shall entail a communication strategy to promote lifelong learning and a digital culture in Cyprus, investments in digital infrastructure to support digital learning and the development of an e-learning platform with key content material on digital skills and cross-sectoral competences accessible to all target groups.

The implementation of the reform shall be completed by 31 December 2025.

Investment 1(C5.1I1): Construction of one Model Technical School

The objective of the investment is to provide students and educators with a modern well-equipped environment for learning increasing the capacity, quality and attractiveness of vocational education and training (VET) in Cyprus.

This measure shall comprise of the construction of one new technical school in Limassol (in replacement of current A’ Technical School).

The implementation of the investment shall be completed by 30 June 2026.

Investment 2 (C5.1I2): Skilling, Reskilling and Upskilling

The aim of this investment is to strengthen the digital skills of the population in line with the e-skills action plan, to enhance the knowledge and skills of persons in green and blue sectors of the economy and to promote entrepreneurship competences.

The measure shall include the delivery of trainings for the strengthening of digital, green and blue skills for all, entrepreneurship trainings for the unemployed, with a special emphasis on women and vulnerable groups, as well as trainings in digital skills for people over the age of 55.

The implementation of the investment shall be completed by 31 December 2025.

L.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 |  |
| 239a | C5.1R1  Addressing skills mismatch between education and labour market (Secondary and Higher Education) | Milestone | Implementation of key measures from the National Action Plan | Publication of reports and communication by competent authorities | - | - | - | Q4 | 2024 | Full implementation of key measures from the National Action Plan, including at least:  (a) report on the preliminary results of “Graduate Tracking of Cyprus Higher Education" survey is published;  (b) 320 of the secondary schools’ educational curricula are reformed to improve digital literacy, emotional intelligence, soft skills and entrepreneurship skills; and  (c) two new programmes of study are developed. |
| 239b | C5.1R1  Addressing skills mismatch between education and labour market (Secondary and Higher Education) | Target | Completion of the in-job shadowing programme |  | Number | 0 | 2250 | Q2 | 2026 | Complete an in-job shadowing programme for at least 2250 secondary general education pupils. |
| 239c | C5.1R1  Addressing skills mismatch between education and labour market (Secondary and Higher Education) | Target | Laboratories equipped and updated | - | Number | 0 | 170 | Q2 | 2026 | Upgrading of 20 laboratories related to Secondary Vocational Education and Training, and 150 laboratories related to General Secondary Education. |
| 240 | C5.1R1  Addressing skills mismatch between education and labour market (Secondary and Higher Education) | Target | Secondary education teaching staff trained | - | Number | 0 | 3 100 | Q4 | 2025 | At least 3 100 secondary education teaching staff are trained in the reformed educational curricula. |
| 241 | C5.1R2  A new teacher and school evaluation system | Milestone | Entry into force of the law for establishing a new Teacher and School Evaluation mechanism | Provision in the law(s) indicating the entry into force of the law(s) | - | - | - | Q4 | 2023 | Entry into force of the law for establishing a new Teacher and School Evaluation mechanism, which shall stipulate that the new mechanism applies at the latest from the school year 2024/2025. |
| 242 | C5.1R2  A new teacher and school evaluation system | Target | Training of teaching staff | - | Number | 0 | 1 100 | Q4 | 2025 | At least 1 100 teaching staff (teachers, deputy heads and school heads) have been trained for the new Teachers and School Evaluation system. |
| 243 | C5.1R3  Gradual extension of free compulsory pre-primary education from the age of four | Milestone | Entry into force of the new Law regarding the gradual extension of free compulsory pre-primary education from the age of four years and adoption of aid schemes by the Council of Ministers | Provision in the law(s) indicating the entry into force of the law(s) | - | - | - | Q4 | 2023 | Entry into force of the Law which shall gradually (starting in the academic year 2024-2025 until academic year 2032-2033) reduce the entry age in free compulsory pre-primary education from the age of four years and eight months to four years. Adoption by the Council of Ministers of aid schemes to (a) cover tuition fees for the free compulsory pre-primary education in communal kindergartens, for children that cannot be enrolled in public kindergartens, and (b) subsidise tuition fees in private kindergartens, for the enrolment of children aged under the entry level of compulsory pre-primary education and above the age of four. |
| 244 | C5.1R3  Gradual extension of free compulsory pre-primary education from the age of four | Target | Children aged between 4 years and 4 years and 8 months enrolled in public, communal and private kindergartens | - | Number | 0 | 3375 | Q2 | 2026 | At least 3 375 children between the ages of 4 years and 5 months and 4 years and 8 months enrolled in free compulsory pre-primary education. At least 3 375 children, between the ages of 4 years and 4 years and 5 months were enrolled in private kindergartens with subsidised fees. |
| 245 | C5.1R3  Gradual extension of free compulsory pre-primary education from the age of four | Target | New places developed in new or extended public kindergartens | - | Number | 0 | 675 new places in public kindergartens | Q2 | 2026 | At least 675 new places in public kindergartens in line with an Action Plan. |
| 246a | C5.1R4  Digital transformation of school units with the aim of enhancing digital skills and skills related to STEM education | Target | Classrooms digitally equipped | - | Number | 0 | 700 | Q2 | 2024 | Classrooms in at least 700 schools have been digitally equipped with laptops, projectors, microphones, speakers, digital graphic boards. |
| 246b | C5.1R4  Digital transformation of school units with the aim of enhancing digital skills and skills related to STEM education | Target | Partial reimbursement for the purchase of digital equipment for pupils | - | Number | 0 | 15 000 | Q2 | 2026 | Partial reimbursement of the purchase of a tablet/laptop for 15000 primary and secondary school students from lower socio-economic background. |
| 247 | C5.1R4  Digital transformation of school units with the aim of enhancing digital skills and skills related to STEM education | Target | Curriculum transformation and production of educational material for digital skills and STEM methodology | - | Number | 0 | 120 | Q4 | 2024 | Curriculum transformation and production of educational material for digital skills and STEM methodology for 120 school subjects. |
| 248 | C5.1R4  Digital transformation of school units with the aim of enhancing digital skills and skills related to STEM education | Target | Teachers benefitting from In-Service Training & Professional Development | - | Number | 0 | 3 375 | Q2 | 2026 | At least 3 375 primary and secondary teachers have benefitted from In-Service Training & Professional Development on Digital Competences. |
| 249 | C5.1R5  E-skills Action Plan – Implementation of specific actions | Milestone | National e-Skills Action Plan is adopted by the Council of Ministers | National e-  Skills Action Plan is adopted by the Council of Ministers | - | - | - | Q4 | 2021 | National e-Skills Action Plan is adopted by the Council of Ministers, which shall include at least:  • development of an e-learning platform, containing a  self-assessment tool for digital fitness, index of all available skilling programmes,  and content material on digital skills and cross-sectoral competences;  • design and delivery of programmes and interventions for professionals within the  public sector in areas such as Project management, Microsoft tools, cybersecurity, social media, e-collaboration and productivity tools;  • investment in digital infrastructure. |
| 250 | C5.1R5  E-skills Action Plan – Implementation of specific actions | Milestone | Implementation of key measures from the e-Skills Action Plan | Publication of annual report by Deputy Ministry of Research, Innovation and Digital Policy and relevant postings /announcements on the e-learning platform | - | - | - | Q4 | 2025 | Full implementation of key measures from the e-Skills Action Plan, which shall include at least:  - design and delivery of targeted programmes for professionals within the public sector for digital skills and cross-sectoral competencies (such as project management);  - relevant investments in digital infrastructure (such as laptops, computers);  - design of one e-learning platform with educational material is provided to include courses offered by educational institutions;  - implementation of communication strategy through, amongst others, funded events. |
| 251 | C5.1I1  Construction of one Model Technical School | Milestone | Contract for the construction of one Technical School | Contract Signature and initiation of construction | - | - | - | Q4 | 2022 | Signing of a contract with the contractor selected under a competitive call for proposals for the construction of one Technical School in Limassol and issue of construction initiation order by the project Engineer. |
| 252 | C5.1I1  Construction of one Model Technical School | Milestone | Completion of construction of one Technical School | Issue of Taking-Over  Certificate for one construction project | - | - | - | Q2 | 2026 | Completion of construction of one Technical School in Limassol and issue of taking over certificate. School fully operational from start of the school year 2026-2027. |
| 253 | C5.1I2  Skilling, Reskilling and Upskilling | Target | Completion of trainings for at least 11 500 participants | - | Number | 0 | 11 500 | Q4 | 2024 | Completion of trainings for at least 11 500 participants in programmes for digital skills, skills related to blue and green economy, entrepreneurship programmes for unemployed and inactive people and training programmes for people over 55. |
| 254 | C5.1I2  Skilling, Reskilling and Upskilling | Target | Completion of trainings for at least 25 600 participants | - | Number | 11 500 | 25 600 | Q4 | 2025 | Completion of trainings for at least 25 600 participants in programmes for digital skills, skills related to blue and green economy, entrepreneurship programmes for unemployed and inactive people and training programmes for people over 55. |

M. COMPONENT 5.2: labour market, social protection and inclusion

This component of the Cypriot Recovery and Resilience plan addresses: (i) inefficiencies and gaps in social protection notably for self-employed and people working in non-standard forms of employment, (ii) the lack of legislation for flexible working arrangements in the form of teleworking, (ii) challenges related to unemployment and youth unemployment and the high level of young people not in employment, education or training (NEETs), (iii) gaps in early childhood education and care (ECEC) and (iv) challenges with respect to social inclusion and welfare, including a high level of people at risk of poverty or social exclusion (AROPE) and increasing needs in long-term care.

The reforms and investments included in the component address the country-specific recommendations on improving the effectiveness of the public employment services and the education and training system (country specific recommendation 3 of 2019 and country specific recommendation 2 of 2020), providing social protection for all and introducing flexible working arrangements (country specific recommendation 2 of 2020), and improving the efficiency and digitalisation of the public sector (country specific recommendation 1 of 2019 and country specific recommendation 4 of 2020).

M.1. 
   Description of the reforms and investments for non-repayable financial support

Reform 2 (C5.2R2): Flexible work arrangements in the form of telework

The objective of the reform is to promote flexible work arrangements in the form of telework to enhance work-life balance and increase employment opportunities.

The reform consists of new legislation for flexible work arrangements in the form of telework and the promotion of collective agreements to regulate telework. It shall also include a scheme relieving part of staff costs as an incentive for employers to hire unemployed persons who shall telework.

The implementation of the reform shall be completed by 30 September 2025.

Investment 1 (C5.2I1): Improving the effectiveness of the Department of Labour and Public Employment Services (PES) and reinforcing support for young people

The objectives of the investment are to: (i) safeguard the successful implementation of employment schemes through digitalisation of their administration, (ii) improve the operational performance of the PES, (iii) minimise the risk for young persons not in employment, education or training (NEETs) to become long-term unemployed, (iv) support NEETs who are not yet registered with the PES by facilitating the integration of young registered unemployed in the labour market.

The investment consists of: the completion of platforms/IT systems for digitalising the schemes managed by the Department of Labour, developing a Performance Management System for the PES and developing an early warning and tracking system for NEETs. In addition, the investment shall include coaching and career guidance for the labour market orientation and integration of NEETs and an incentive scheme for employers to hire NEETs.

The implementation of the investment shall be completed by 30 June 2026.

Investment 2 (C5.2I2): Establishment of Multifunctional Centres and Childcare Centres

The objective of the investment is to increase the labour market participation of carers (often women), and to enhance the availability of quality care and social development infrastructure for children, thereby contributing to gender equality and equal opportunities for all.

The investment consists of a scheme targeted at local authorities and non-governmental organisations (NGOs) for establishing new or improving existing multifunctional centres and child centres for children aged 0 to 3 years and 8 months, as well as for children until the age of 13 based on needs assessment and viability analysis. In addition, in line with Article 7 (2) of the Recovery and Resilience Facility Regulation, the investment includes a study under the Technical Support Instrument (TSI) to analyse the state of provision of early childhood education and care services for young children (aged 0 to school age) in Cyprus and to develop recommendations for investment in the sector, and specifically in child centres. Following the recommendations of the TSI project, a national strategy on early childhood education and care (ECEC) and an accompanying action plan shall be adopted.

The implementation of the investment shall be completed by 30 June 2026.

Investment 3 (C5.2I3): Establishment of home structures for children, adolescents with conduct disorders, persons with disabilities and people in need of long-term care

The objectives of the investment are to: (i) support the Republic of Cyprus to meet its obligations under the Refugee Act 2000-2016 to provide care and to safeguard the rights of unaccompanied minors who arrive in the Republic, (ii) meet the housing needs for children and adolescents with particular difficulties who are placed under the guardianship of the social welfare services, (iii) enhance community-based supported living structures for persons with disabilities to avoid institutionalisation and social exclusion and (iv) address gaps in long-term care services.

The investment consists of the establishment of at least eight state structures for children or persons with disabilities and the establishment or renovation of at least eighteen homes for children, adolescents with conduct disorders and people in need of long-term care (through tender procedures and aid schemes).

The implementation of the investment shall be completed by 30 June 2026.

Investment 4 (C5.2I4): Child centres in municipalities

The objective of this investment is to facilitate the participation and re-entering of workers with caring responsibilities, mostly women, in the labour market, thereby promoting gender equality. It further aims at enhancing the social inclusion of children from disadvantaged and/or migrant background.

The investment consists of the construction of four (4) child care centres in the municipalities of Ayios Athanasios, Ayia Napa, Paralimni and Yermasoyia.

The implementation of the investment shall be completed by 31 December 2024.

Investment 5 (C5.2I5): Construction of two model special education schools

The objective of the investment is to improve the school environment for pupils with severe disabilities or other special educational needs and support their academic and social development.

The investment consists of the replacement of two special schools in the Limassol district: (i) the Special Education School of Apostolos Loucas and (ii) the Red Cross Recovery Special Needs School. The schools shall be constructed adjacent to each other and shall share the multi-purpose hall as well as a therapeutic indoor swimming pool.

The implementation of the investment shall be completed by 31 December 2025.

M.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 |  |
| 255 | C5.2R2  Flexible Work Arrangements in the Form of Telework | Milestone | Entry into force of the law for flexible work arrangements in the form of telework | Provision in the law indicating the entry into force of the law for the flexible work arrangements in the form of telework | - | - | - | Q2 | 2023 | Entry into force of a new law which shall regulate flexible work arrangements in the form of telework. The law shall include a definition of telework, description of the economic activities where telework is applicable, the conditions for taking up telework and the rights and obligations of employers and employees. |
| 256 | C5.2R2  Flexible Work Arrangements in the Form of Telework | Target | Grant awarded for at least 400 persons in telework | - | Number | 0 | 400 | Q3 | 2025 | Grant awarded to employers to employ at least 400 previously unemployed persons after completing 12 months of employment with at least 30% in telework. |
| 258 | C5.2I1  Improving the effectiveness of the Department of Labour and Public Employment Services and reinforcing support for young people | Target | Implementation of completed, fully operational platforms | - | Number | 0 | 3 | Q4 | 2024 | Implementation of completed, fully operational platforms for  (1) digitalising the hiring schemes of the Department of Labour,  (2) developing a Performance Management System for the Public Employment Services and  (3) developing an early warning and tracking system for young people not in education, employment or training (NEETs) for the Public Employment Services. |
| 259 | C5.2I1  Improving the effectiveness of the Department of Labour and Public Employment Services and reinforcing support for young people | Target | Grant awarded to employers for hiring at least 600 young people not in employment or in education or training (NEETs) | - | Number | 0 | 600 | Q4 | 2025 | Grant awarded to employers for hiring at least 600 young people (aged 15-29) not in employment, education or training (NEETs), for a 12-month employment period, following completion of a two-month subsidised training period (two months subsidised training and 10-month subsidised employment). |
| 260 | C5.2I1  Improving the effectiveness of the Department of Labour and Public Employment Services and reinforcing support for young people | Target | Coaching and career guidance for young people not in employment or in education or training (NEETs) | - | Number | 0 | 5 500 | Q2 | 2026 | Coaching and career guidance for the labour market orientation and integration of young people offered to at least 5 500 young people not in employment, education or training (NEETs) through the public employment services. |
| 261 | C5.2I2  Establishment of multifunctional centres and childcare centres | Milestone | Adoption of a national strategy on early childhood education and care (ECEC) and an accompanying action plan by the Council of Ministers | Publication of the national strategy on ECEC and the accompanying action plan | - | - | - | Q4 | 2024 | A national strategy on enhancing early childhood education and care (ECEC) covering children aged zero to school age, and an accompanying action plan have been adopted by the Council of Ministers, taking into account the recommendations of the completed TSI project. |
| 262 | C5.2I2  Establishment of multifunctional centres and childcare centres | Target | Grant awarded to at least ten local authorities/ Non-Governmental Organisations for establishing or enhancing Multifunctional Centres or Child Centres | - | Number | 0 | 10 | Q4 | 2024 | At least ten local authorities/ Non-Governmental Organisations have received a grant for establishing or enhancing Multifunctional Centres or Child Centres. |
| 263 | C5.2I2  Establishment of multifunctional centres and childcare centres | Target | Grant awarded to at least 27 local authorities/ Non-Governmental Organisations for establishing or enhancing Multifunctional Centres or Child Centres | - | Number | 10 | 27 | Q2 | 2026 | At least 27 local authorities/ Non-Governmental Organisations have received a grant for establishing or enhancing Multifunctional Centres or Child Centres. |
| 264 | C5.2I3  Establishment of Home structures for children, adolescent with conduct disorders and persons with disabilities and people in need of long term care (LTC) | Target | Buildings for the needs of children or persons with disabilities and support for homes for children, adolescents with conduct disorders and people in need of long-term care (signing of contracts/funding agreements) | - | Number | 0 | 26 | Q3 | 2024 | Signing of contracts/funding agreements for the establishment of at least 26 buildings for the needs of children or persons with disabilities and for homes for children, adolescents with conduct disorders and people in need of long-term care. |
| 265 | C5.2I3  Establishment of Home structures for children, adolescent with conduct disorders and persons with disabilities and people in need of long term care (LTC) | Target | Buildings for the needs of children or persons with disabilities and support for homes for children, adolescents with conduct disorders and people in need of long-term care (establishment) | - | Number | 0 | 26 | Q2 | 2026 | Establishment of at least 26 buildings for the needs of children or persons with disabilities and for homes for children, adolescents with conduct disorders and people in need of long-term care. |
| 266 | C5.2I4  Child Centres in Municipalities | Target | Construction of at least one child centre | - | Number | 0 | 1 | Q4 | 2022 | Completion of construction and issue of taking-over certificate of at least one child centre in one of the following municipalities: Ayios Athanasios, Ayia Napa, Paralimni and Yermasoyia. |
| 267 | C5.2I4  Child Centres in Municipalities | Target | Construction of at least four child centres | - | Number | 1 | 4 | Q4 | 2024 | Completion of construction and issue of taking-over certificates of four child centres (one child centre in Ayios Athanasios, one in Ayia Napa, one in Paralimni and one in Yermasoyia). |
| 268 | C5.2I5  Construction of Two Model Special Education Schools | Milestone | Signing of contract with the selected tenderer (contractor) | The contract shall be signed with the selected tenderer (contractor) | - | - | - | Q4 | 2022 | Signing of contract with the selected tenderer(s) (contractor (s)) selected under a competitive call for proposals for the construction of two model schools in Limassol - the Special Education School of Apostolos Loucas and the Red Cross Recovery Special Needs School. |
| 269 | C5.2I5  Construction of Two Model Special Education Schools | Milestone | Completion of construction of Apostolos Loukas & Red Cross Special needs school | Issue of taking-over certificates by the project engineer verified administratively and on the spot, by the Head of Technical Services of the Ministry of Education & Culture. | - | - | - | Q4 | 2025 | Completion of construction of the Special Education School of Apostolos Loucas and of the Red Cross Recovery Special Needs School. |

M.3. 
   Description of the reforms and investments for the loan

Reform 1 (C5.2R1): Reform of the Social Insurance System and Restructuring of the Social Insurance Services

The objectives of the reform are to widen access to social protection and to improve the operational efficiency and effectiveness of the Social Insurance Services. More specifically, the reform shall extend and improve the cover of benefits. This may include, for example, unemployment benefit, accident at work benefit and occupational disease benefit in particular for the self-employed, including people working with contracts or new forms of employment (such as platform workers). In addition, the reform shall improve the timeliness and accuracy of the services provided to citizens and minimise fraud and errors through risk analysis and quality control mechanisms.

The reform consists of: (i) a revision of the legislation for the Social Security System which shall incorporate the extension of the social security coverage to self-employed, including non-standard forms of employment, such as platform work, and (ii) the re-engineering of business processes, personnel training, set-up of data analytics capacity and digitalisation of services, as well as (iii) the gradual upgrading of the existing IT Systems to an Integrated Information System.

The implementation of the reform shall be completed by 30 June 2026.

M.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 |  |
| 270 | C5.2R1  Reform of the Social Insurance System and Restructuring of the Social Insurance Services | Milestone | Entry into force of the revised Social Insurance Law | Provision in the amending law indicating the entry into force of the revisions to the Social Insurance Law | - | - | - | Q2 | 2023 | Entry into force of the revised Social Insurance Law, which shall incorporate the extension of the social security coverage to self-employed, including non-standard forms of employment, such as platform work. |
| 271 | C5.2R1  Reform of the Social Insurance System and Restructuring of the Social Insurance Services | Milestone | Completion of the upgrading  of the existing IT systems to an Integrated Social Security Information System | Deliverables acceptance team (contracting authority side) signs off on analysis, design and development report | - | - | - | Q2 | 2026 | Completion and go-live of the Integrated Social Security Information System including payment module, benefits administration module, data analytics and interoperability with other systems. |

N. COMPONENT 6.1: REPowerEU

The REPowerEU chapter addresses the challenge of reducing reliance on fossil fuels. The objectives of the component are to strongly reduce Cyprus’ dependence from imported fossil fuels in general. The new RePowerEU chapter contributes to the achievement of Cyprus’s energy efficiency obligations and targets set for 2030, under the National Energy and Climate Plan. In order to limit its energy dependence, Cyprus shall further invest in energy efficiency improvements in buildings and road transport and accelerate the deployment of renewables.

The measures included in the REPowerEU chapter address most aspects of recent country-specific recommendations in the field of energy, as they shall foster research and innovation in the field of green transition and energy production, storage, transmission and distribution solutions, promote renewables and accelerate energy efficiency measures in various buildings in the public and private sector, enhance the regulatory framework for the operation of Energy Communities, and promote widespread use of Electric Vehicles.

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 ‘Do no significant harm’ Technical Guidance (2021/C58/01).

The implementation of the measures are all expected to contribute to reducing dependency on fossil fuels. Increasing the share of renewable energy sources has a cross-border and multi-country dimension because it contributes to securing the energy supply in the Union as a whole.

N.1. 
   Description of the reforms and investments for non-repayable financial support

Reform 1 (C6.1R1) Regulating and facilitating the participation of Active Customers, Renewable Self-consumers, Citizen Energy Communities, Renewable Energy Communities and Demand Response through Cumulative Representation in the electricity market

The objectives of this reform are the promotion of participation of citizens either as Active Customers and/or Renewable Self-consumers, through Citizen Energy Communities and/or Renewable Energy Communities, Demand Response through Cumulative Representation in the national energy market. This reform should enable the uptake of renewable energy projects in the country, thereby allowing a faster penetration of renewable energy in the economy.

Following the adoption of the relevant regulatory decisions by CERA, completing the framework regarding Active Customers and Renewable Self-consumers, Citizen Energy Communities, Renewable Energy Communities and Demand Response, the measure aims at creating one or more contact points for the above-mentioned groups and communities by expanding the single contact point established as per the Renewable Energy Directive (EU) 2018/2001, on the relevant permit-granting process. Those contact points shall, upon the request of an interested party, guide and facilitate the interested parties during the entire administrative procedure that is needed for the creation/participation in RECs and CECs as well as for becoming Renewable self-consumers or active customers. Moreover, the contact points will be responsible to provide to eligible entities, useful information and reply to questions, facilitate meetings with stakeholders and relevant authorities, regarding the establishment of energy communities and/or their participation in the electricity market.  Interested parties shall be allowed to submit relevant requests, queries and documents both in digital and physical form.

The implementation of the reform shall be completed by 31 December 2025.

Reform 2 (C6.1R2) Introduction of regulatory framework for the connection of EV recharging points to the distribution network

The objectives of this reform are the establishment of guidelines for the formulation of regulatory frameworks regarding the procurement of flexibility services by the DSO as well as the connection of Electric Vehicle Charging Points to the Distribution Network. This reform shall facilitate the rollout of electric vehicles (EVs) and enable final consumers to actively participate in the electricity market.

The reform consists in the introduction of a regulatory framework that facilitates the connection of charging points to the distribution network and ensures the interplay with the DSO, together with the guidelines on a fair tendering procedure for the public contracts; and provides the framework for the licencing of the DSO for the procurement of flexibility services, including congestion management.

The implementation of the reform shall be completed by 31 December 2025.

Investment 1 (C6.1I1). Scaled-up measure: Promoting renewables and individual energy efficiency measures in dwellings and tackling energy poverty, including in households with vulnerable electricity consumers

The objective of this measure is to scale up Investment C2.1I2: Promoting renewables and individual energy efficiency measures in dwellings and tackling energy poverty, including in households with vulnerable electricity consumers under Component 2.1. The scaled-up part of the measure shall increase the number of dwellings, including households of vulnerable electricity consumers, with improved energy performance thus aiming at increasing energy savings and further tackling energy poverty.

Investment 2 (C6.1I2). Scaled-up measure: Encouraging the use of renewables and energy savings by local/wider public authorities

The objective of this measure is to scale up Investment C2.1I3: Encouraging the use of renewables and energy savings by local/wider public authorities and facilitating the transition of local communities towards climate mitigation & adaptation under Component 2.1. The scaled-up part of the measure shall lead to further reduction in primary energy consumption per year for local and wider public authorities.

Investment 3 (C6.1I3) Promoting extensive energy upgrading of housing stock

The aim of this investment is to reduce the primary and final energy consumption and the CO2 emissions in existing households. In addition, the scheme shall promote the installation of Renewable Energy Systems in those households. The renovation programme shall lead to a 30% reduction in the Primary Energy Demand of the buildings renovated.

The eligible investments under the grant scheme shall include:

a.The cost of issuing the Energy Performance Certificate (EPC) of the household before and after the implementation of the interventions.

b.Energy efficiency measures (including building renovations) in buildings such as thermal insulation of horizontal and vertical building elements, replacement of windows, external shading, solar systems for the production of hot water, installation of RES Systems for space heating / cooling, highly efficient air-conditioning systems.

c.Installation of Photovoltaic Systems (Net-Billing οperation). Installation of batteries for energy storage.

Investment 4 (C6.1I4). Scaled-up measure: Promote widespread use of Electric Vehicles (EVs)

The objective of this measure is to scale up Investment C2.2I3: Promote widespread use of Electric Vehicles (EVs), under Component 2.2. The scaled-up part of the measure shall increase the number of electric vehicles purchased, taking also into account price increases in the market.

Investment 5 (C6.1I5). Scaled-up measure: Scheme for the enhancement of the competitiveness and the energy efficiency of large enterprises in Cyprus

The objective of this measure is to scale up Investment C3.1I7: Scheme for the enhancement of the competitiveness and the energy efficiency of large enterprises in Cyprus, under Component 3.1. The scaled-up part of the measure shall increase the number of large enterprises supported, in all economic sectors, with the aim to improve their energy performance through energy efficiency measures, installation of photovoltaic systems and circular economy measures linked to the REPowerEU objectives as laid out in Article 21c(3) of Regulation (EU) 2021/241.

The scaled-up part of the investment shall consist in a grant scheme of at least EUR 10 000 000 dedicated to support energy efficiency investments undertaken by large enterprises, such as investments for improving the energy performance of buildings, for energy efficiency measures related to production processes, for renewable energy and cogeneration systems, as well as for circular economy.

In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the eligibility criteria contained in terms of reference for upcoming calls for projects shall exclude the following list of activities
[11](#footnote12)
: (i) activities related to fossil fuels, including downstream use; (ii) activities under the EU Emission Trading System (ETS) achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks; (iii) activities related to waste landfills, incinerators and mechanical biological treatment plants; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant EU and national environmental legislation may be selected.

The implementation of the investment shall be completed by 30 June 2026.

Investment 6 (C6.1I6). Scaled-up measure: Thematic research and innovation funding program on green transition

The objective of this measure is to scale up Investment C3.2I3: R&I funding program on green transition, under Component 3.2. The scaled-up part of the measure shall increase the number of organisations engaged in green transition R&I activities, due to the support provided.

Investment 7 (C6.1I7). Thematic research in enterprises for energy production, storage, transmission and distribution solutions

The aim of this investment is the provision of grants to organisations for targeted R&I activities aiming to provide solutions to bottlenecks identified in energy production, storage, transmission and distribution that shall enhance the national grid’s infrastructure functionality and efficiency, accelerate RES deployment and significantly reduce the country’s energy needs.

In order to ensure that the measure complies with the ‘Do no significant harm’ Technical Guidance (2021/C58/01), the eligibility criteria contained in terms of reference for upcoming calls for projects shall exclude the following list of activities : (i) activities related to fossil fuels, including downstream use
[12](#footnote13)
; (ii) activities under the EU Emission Trading System achieving projected greenhouse gas emissions that are not lower than the relevant benchmarks
[13](#footnote14)
; (iii) activities related to waste landfills, incinerators
[14](#footnote15)
 and mechanical biological treatment plants
[15](#footnote16)
; and (iv) activities where the long-term disposal of waste may cause harm to the environment. The terms of reference shall additionally require that only activities that comply with relevant EU and national environmental legislation may be selected.

N.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 |  |
| 272 | C6.1R1 Regulating and facilitating the participation of Active Customers, Renewable Self-Consumers, Citizen Energy Communities, Renewable Energy Communities and Demand Response through Cumulative Representation in the electricity market | Milestone | Expanding the competencies of the single contact point established as per the Renewable Energy Directive (EU) 2018/2001, to also serve as a contact point regarding the Renewable Energy communities and Citizen Energy communities, Active customers and Renewable self-consumers | Publication of Council of Ministers’ Decision in the official gazette | - | - | - | Q4 | 2025 | Creation of at least one contact point regarding the renewable and citizens communities, Active customers and Renewable self-consumers by expanding the single contact point established as per the Renewable Energy Directive (EU) 2018/2001, on the relevant permit-granting process, as to include the provision of  guidance and facilitation to the interested parties during the entire administrative procedure that is needed for the creation/participation in RECs and CECs. |
| 273 | C6.1R2 Establishment of the regulatory framework for the connection of EV recharging points to the distribution network | Milestone | Regulatory Decision/s for the connection of EV recharging points to the distribution network | Publication of Regulatory Decision/s in the official gazette | - | - | - | Q4 | 2025 | Publication and entry into force of regulatory decision/s issued by CERA for the connection of Electric Vehicle Charging Points to the Distribution Network. Publication of the regulatory decision/s on procurement of flexibility services by the DSO, including provisions for the gradual entry into force of the decision/s, in line with the relevant guidelines established under this RRP reform. |
| 28b | C6.1I1 Scaled-up measure: Promoting renewables and individual energy efficiency measures in dwellings and tackling energy poverty in households with vulnerable electricity consumers | Target | Dwellings and households with vulnerable electricity consumers having improved their energy performance | - | Number | 8 500 | 14 000 | Q4 | 2023 | At least 14 000 dwellings, including 1000 households of vulnerable electricity consumers (including people with disabilities) have improved their energy performance due to the financial support provided, with an objective to achieve on average at least a 30% primary energy demand reduction. |
| 29b | C6.1I1 Scaled-up measure: Promoting renewables and individual energy efficiency measures in dwellings and tackling energy poverty in households with vulnerable electricity consumers | Target | Dwellings and households with vulnerable electricity consumers having improved their energy performance | - | Number | 16 200 | 30 000 | Q2 | 2026 | At least 30 000 dwellings, including 3000 households of vulnerable electricity consumers (including people with disabilities) have improved their energy performance due to the financial support provided, with an objective to achieve on average at least a 30% primary energy demand reduction. |
| 31b | C6.1I2 Scaled-up measure: Encouraging the use of renewables and energy savings by local/wider public authorities | Target | Reduced primary energy consumption due to investments undertaken by local and wider public authorities, improving their energy performance | - | MWh / year | 3 600 | 4 000 | Q4 | 2024 | Investments undertaken by local and wider public authorities have improved their energy performance due to the financial support provided and have achieved a primary energy consumption reduction of at least 4 000 MWh per year. |
| 32b | C6.1I2 Scaled-up measure: Encouraging the use of renewables and energy savings by local/wider public authorities | Target | Reduced primary energy consumption due to investments undertaken by local and wider public authorities, improving their energy performance | - | MWh / year | 11 250 | 25 000 | Q2 | 2026 | Investments undertaken by local and wider public authorities have improved their energy performance due to the financial support provided and have achieved a primary energy consumption reduction of at least 25 000 MWh per year. |
| 274 | C6.1I3 Promoting extensive energy upgrading of housing stock | Milestone | Support scheme promoting extensive energy upgrading of housing stock | Publication of call for proposals for the support scheme | - | - | - | Q1 | 2024 | Publication of the call for proposals for the support scheme for promoting extensive energy upgrading of housing stock, following Council of Ministers decision approving the scheme objectives. The investment shall aim at achieving at least a 30% primary energy demand reduction. |
| 275 | C6.1I3 Promoting extensive energy upgrading of housing stock | Target | Households being energy renovated, improving their energy performance | - | Number | 0 | 1100 | Q2 | 2026 | Award of grants to at least 1100 households which shall be energy renovated, improving their energy performance, due to the support provided with an objective to achieve at least a 30% primary energy demand reduction. |
| 62b | C6.1I4 Scaled-up measure: Promote widespread use of Electric Vehicles (EVs) | Target | Purchase of electric vehicles, electric bicycles due to the support granted | - | Number | 1 523 | 2 300 | Q4 | 2024 | Due to the support granted by the support scheme, at least 2 300 electric vehicles of categories M1, M2-3, N, L1e-L7e and bicycles have been purchased. |
| 63b | C6.1I4 Scaled-up measure: Promote widespread use of Electric Vehicles (EVs) | Target | Purchase of electric vehicles, electric bicycles due to the support granted | - | Number | 4335 | 5 800 | Q2 | 2026 | Due to the support granted by the support scheme, at least 5 800 electric vehicles of categories M1, M2-3, N, L1e-L7e and bicycles have been purchased. |
| 101b | C6.1I5 Scaled-up measure: Scheme for the enhancement of the competitiveness and the energy efficiency of large enterprises in Cyprus | Target | Grants to large enterprises | - | Number | 0 | 3 | Q4 | 2024 | Award of grants to at least three (3) large enterprises, in all sectors, to improve their energy performance. All the projects selected shall be in compliance with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation. |
| 102b | C6.1I5 Scaled-up measure: Scheme for the enhancement of the competitiveness and the energy efficiency of large enterprises in Cyprus | Target | Grants to large enterprises | - | Number | 3 | 12 | Q2 | 2026 | Award of grants to at least twelve (12) large enterprises, in all sectors, to improve their energy performance. All the projects selected shall be in compliance with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation. |
| 131b | C6.1I6 Scaled-up measure: Thematic research and innovation funding program on green transition | Target | Organisations supported by grants on green transition R&I activities | - | Number | 10 | 20 | Q2 | 2026 | At least 20 organisations supported by grants on green transition R&I activities, in compliance with the ’Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation. |
| 276 | C6.1I7 Thematic research in enterprises for energy production, storage, transmission and distribution solutions | Milestone | Signature of grant agreements for the whole budget | Grant agreements signed by the Director of the Research and Innovation Foundation | - | - | - | Q3 | 2024 | Signing of grant agreements for R&I funding program on energy production, storage, transmission and distribution solutions R&I activities, with terms of reference including eligibility criteria that ensure that the selected projects comply with the ‘Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation. |
| 277 | C6.1I7 Thematic research in enterprises for energy production, storage, transmission and distribution solutions | Target | Organisations supported by grants on energy production, storage, transmission and distribution solutions R&I activities | - | Number | 0 | 20 | Q2 | 2026 | At least 20 organisations supported by grants on energy production, storage, transmission and distribution solutions R&I activities, in compliance with the ’Do no significant harm’ Technical Guidance (2021/C58/01) through the use of an exclusion list and the requirement of compliance with the relevant EU and national environmental legislation. |

  

O. COMPONENT 7.1: Audit and control 

This component aims to ensure that the control framework of the Cypriot Recovery and Resilience Plan prevents, detects and corrects corruption, fraud and conflicts of interests when using the funds provided under the Recovery and Resilience Facility Regulation (RRF Regulation), as well as ensuring adequate arrangements to effectively avoid double funding under the RRF Regulation and other Union programmes.

O.1. Description of the reforms and investments for non-repayable financial support

Reform 1 (C7.1R1): Arrangements for the control framework of the Recovery and Resilience Plan

The objective of the measure is to improve the control framework of the Cypriot Recovery and Resilience Plan. To ensure an effective implementation of proportionate measures for the protection of the financial interests of the Union (PFIU) according to the Article 22 of the RRF Regulation,

The Council of Ministers shall adopt mandatory instructions prepared by the Coordination Authority and distributed upon their adoption to all relevant bodies.

The milestone under this measure shall be fulfilled by the time of submission of the next payment request to the Commission following the adoption of this Implementing Decision and shall be a prerequisite for any future payment. 

The reform shall be completed by 31 December 2023.

O.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 |
|  |  |  |  |  | Unit of measure | Baseline | Goal | Quarter | Year |  |
| 278 | C7.1R1  Arrangements for the control framework of the Recovery and Resilience Plan | Milestone | Clear delimination between control and implementation duties | Adopted instructions and proof of dissemination to all Implementing Bodies. | - | - | - | Q4 | 2023 | The Council of Ministers shall adopt mandatory instructions prepared by the Coordinating Authority which shall cover at least the following areas:   ·The risk assessment methodology to be applied for all verification types (administrative and on the spot),  ·Verifications for double funding and procedures for its avoidance,    ·The treatment of irregularities and the whistle blowing process followed for interventions (projects or schemes) funded by the Union,    ·Requirements for audit trail;  ·A central fraud risk assessment for all contracting authorities, taking into consideration all the elements outlined in the Guidance Note on Fraud Risk Assessment and Effective and Proportionate Anti-Fraud Measures for ESIF 2014-2020. Each contracting authority functioning under the RRP is mandated to comply with the action plan devised by the central fraud risk assessment team.  ·Establishment of  specific functions for PFIU, dedicated to tackling issues related to fraud, corruption, and conflicts of interest in Implementing Bodies implementing aid schemes under the RRP.    The instructions shall be distributed to all entities involved in the implementation, monitoring and control of the RRP and shall clearly segregate their responsibilities, ensuring a clear separation between control and implementation duties and shall require that controls are conducted in alignment with them. |

2.Estimated total cost of the recovery and resilience plan

The estimated total cost of the recovery and resilience plan of Cyprus is EUR 1 220 971 974.

The estimated total costs of the REPowerEU chapter is EUR 104 580 000. In particular, the estimated total costs of the measures referred to in Article 21c(3), point (a) of Regulation (EU) 2023/435 is EUR 0 whilst the costs of the other measures in the REPowerEU chapter is EUR 104 580 000.

SECTION 2: FINANCIAL SUPPORT

1.Financial contribution

The instalments referred to in Article 2(2) shall be organised in the following manner:

1.1.First Instalment (non-repayable support):

|  |  |  |  |
| --- | --- | --- | --- |
| Sequential Number | Related Measure (Reform or Investment) | Milestone / Target | Name |
|  |  |  |  |
| 21 | C2.1R2  Independence of Cyprus Transmission System Operator (TSOC) from the incumbent Electricity Authority of Cyprus | Milestone | Law for the Regulation of the Electricity Market of 2021 |
| 23 | C2.1R4  Energy Storage Regulatory Framework | Milestone | Amendment of the Transmission and Distribution Rules (TDRs) and Trading and Settlement Rules (TSRs) |
| 24 | C2.1I1  Promoting energy efficiency investments in SMEs and non-profit organisations | Milestone | Support scheme for Promoting energy efficiency investments in SME and non-profit organisations |
| 27 | C2.1I2  Promoting renewables and individual energy efficiency measures in dwellings and tackling energy poverty in households with vulnerable electricity consumers | Milestone | First call for proposals for Promoting renewables and individual energy efficiency measures in dwellings |
| 30 | C2.1I3  Encouraging the use of renewables and energy savings by local/wider public authorities and facilitating the transition of local communities towards climate mitigation & adaptation | Milestone | First call for proposals to support local authorities in energy efficiency measures |
| 93 | C3.1I2  Enhancement of isotopic database of traditional Cypriot products. | Milestone | Liquid Chromatography- Isotopic Ratio Mass Spectrometer (LC-IRMS) equipment |
| 109 | C3.1R4  Enhancement of circular economy in the Industry | Milestone | Approval of the National Action Plan for the Enhancement of Circular Economy in Cyprus |
| 160 | C3.4R3  Introduce new framework for evaluation and selection process for filling public service vacancies and new regulations for the evaluation of employees’ performance | Milestone | Entry into force of legislation for the evaluation and selection process for public service vacancies and regulations for employees’ performance evaluation. |
| 186 | C3.4I8  Upgrading the infrastructure of courts | Milestone | Extension of the Famagusta District Court |
| 188 | C3.4R10  Improving the legal and institutional framework for fighting corruption | Milestone | Entry into force of the law on Transparency in Decision-Making and Related Matters |
| 189 | C3.4R10  Improving the legal and institutional framework for fighting corruption | Milestone | Entry into force of the law to protect whistle-blowers |
| 192 | C3.5R2     Framework and Action Plan for addressing NPLs | Milestone | Entry into force of the package of amending laws regarding credit acquiring companies (CAC) and credit servicers to improve the working environment for non-performing loans management |
| 232 | C4.2I1  Digitalisation in various Central Government Ministries – Services | Milestone | Repository system for audit and control: information for monitoring implementation of RRF |
| 249 | C5.1R5  E-skills Action Plan – Implementation of specific actions | Milestone | National e-Skills Action Plan is adopted by the Council of Ministers |
|  |  | Instalment Amount | EUR 97 701 149 |

1.2.Second Instalment (non-repayable support) :

|  |  |  |  |
| --- | --- | --- | --- |
| Sequential Number | Related Measure (Reform or Investment) | Milestone / Target | Name |
|  |  |  |  |
| 7 | C1.1I2  Cyprus Innovative Public Health information and communications technology (ICT) System | Milestone | Influenza Sentinel Surveillance (ISS)System |
| 35 | C2.1I5  Energy Efficiency Upgrading of public buildings | Target | Thermal insulation and photovoltaic systems installed in schools |
|  |  |  |  |
| 45 | C2.1I9  Forests fire protection | Milestone | Signing of 8 Agreements/ Contracts Signatures for the purchase of vehicles, equipment and provision of services and issue of call for tenders for the purchase of firefighting aircraft |
| 71 | C2.3I3  Integrated Monitoring and Control Management System for the Water Development Department’s infrastructure | Milestone | Completion of the detailed requirements analysis and system design document |
| 87 | C3.1R2  On-line platform for improving the trade and information symmetry in the fresh produce supply chain | Milestone | Law on unfair practices in transactions in the local fresh produce market |
| 97 | C3.1I5  Creation of a National Commercial Identity and promotion of the traditional product “halloumi” | Milestone | Action Plans for (a) the “made in Cyprus” branding, and (b) for the promotion of the halloumi cheese |
| 105 | C3.1I9  Promotion of circular economy in hotel establishments | Target | Coaching scheme for circular economy |
| 122 | C3.2R2  Incentives for investments and human capital in R&I | Milestone | Tax exemption of legal entities for investing in innovative companies |
| 125 | C3.2I1  Set up and operate a central Knowledge Transfer Office (KTO) | Milestone | Launch of KTO |
| 134 | C3.3R1  Facilitation of Strategic investments | Milestone | Law for strategic investments |
| 155 | C3.4R1  Enhance the administrative capacity and improve the functioning of public administration for better policy making and implementation | Milestone | Action Plan on the efficient management of human resource issues in the national public administration |
| 187 | C3.4R10  Improving the legal and institutional framework for fighting corruption | Milestone | Entry into force of the law establishing the Independent Authority against Corruption |
| 207a | C3.5R9     Improving tax collection and effectiveness of the Tax Department | Milestone | Operation of VAT Services within an Integrated Tax Administration System (ITAS) |
| 214 | C4.1R1  Empower the National Regulatory Authority (OCECPR) | Milestone | Launch of the geographical survey and entry into force of secondary legislation |
| 233 | C4.2I1  Digitalisation in various Central Government Ministries – Services | Target | Start of the digital upgrade of a number of central government ministries and departments |
| 278 | C7.1R1  Arrangements for the control framework of the Recovery and Resilience Plan | Milestone | Clear delimitation between control and implementation duties |
|  |  | Instalment Amount | EUR 87 136 829 |

1.3.Third Instalment (non-repayable support):

|  |  |  |  |
| --- | --- | --- | --- |
| Sequential Number | Related Measure (Reform or Investment) | Milestone / Target | Name |
|  |  |  |  |
| 5 | C1.1I1  New facilities for the Cyprus Blood Establishment and procurement of the latest technology attendant equipment | Milestone | Contract signature for the construction of the Cyprus Blood Establishment |
| 22 | C2.1R3  Digital One-Stop Shops to streamline RES projects permitting and to facilitate Energy Renovation in Buildings | Milestone | Fully operational IT platform |
| 77a | C2.3I5  Anti-flood and water collection measures | Milestone | Completion of construction works of drainage network and reconstruction of streets and pavements in areas of Nicosia |
| 85 | C3.1R1  Move agricultural practices from the 20th century to the 21st century by investing in a national centre for excellence in agri-tech | Milestone | Cooperation between the Agricultural  Research Institute and public universities, for joint MSc and PhD programmes |
| 95 | C3.1I3  Upskill existing and future farmers | Target | Scholarships granted |
| 120 | C3.2R1  National R&I Policy and policy tools | Milestone | Adoption of the national R&I Strategy and of the Action Plan to implement it |
| 123 | C3.2R3  Policies to foster access to publicly funded research infrastructure and laboratories | Milestone | Digital registry to record and publish research infrastructure |
| 127 | C3.2I2  Innovation funding programmes for start-ups, innovative companies and SMEs | Milestone | Signature of grant agreements for 50% of budget |
| 130 | C3.2I3  R&I funding program on green transition | Milestone | Signature of grant agreements for a R&I funding programme of EUR 6 mln budget |
| 136 | C3.3R2  Enhancing Fast-Track Business Activation Mechanism | Milestone | Establishment of an electronic system where investors can submit their online application |
| 143 | C3.3R6  Incentives to promote mergers and acquisitions. | Milestone | Action Plan for incentives for mergers and acquisitions |
| 151 | C3.3I6  State funded equity fund | Milestone | Setup of the Fund |
| 173 | C3.4I4  Enhancing e-system for issuing building permits | Milestone | Enhancement of the e-application environment of the Hippodamos System |
| 194 | C3.5R3  Strategy for addressing inadequacies of the property transaction system (title deeds) | Milestone | Extension of the New Planning and Building Permit Policy |
| 195 | C3.5R3  Strategy for addressing inadequacies of the property transaction system (title deeds) | Milestone | Entry into force of the amendment of the Sale of Property (Specific Performance) Law |
| 199 | C3.5R5  Action plan for the development of a liability monitoring register | Milestone | Action Plan for the development of a liability monitoring register |
| 201 | C3.5R6     Reinforcing and strengthening the insolvency framework | Milestone | Full implementation and full operation of the legal and institutional framework for insolvency |
| 209 | C3.5R10     Addressing Aggressive Tax Planning | Milestone | Entry into force of the law to tackle aggressive tax planning |
| 224 | C4.2R1  Digital Services Factory | Milestone | Definition of the Service Delivery Model for the Digital Services Factory |
| 251 | C5.1I1  Construction of one Model Technical School | Milestone | Contract for the construction of one Technical School |
| 266 | C5.2I4  Child Centres in Municipalities | Target | Construction of at least one child centre |
| 268 | C5.2I5  Construction of Two Model Special Education Schools | Milestone | Signing of contract with the selected tenderer (contractor) |
|  |  | Instalment Amount | EUR 103 036 204 |

1.4.Fourth Instalment (non-repayable support):

|  |  |  |  |
| --- | --- | --- | --- |
| Sequential Number | Related Measure (Reform or Investment) | Milestone / Target | Name |
|  |  |  |  |
| 3 | C1.1R2  Design of an Electronic platform for the surveillance of Nosocomial Antibiotic Consumption and Healthcare – Associated Infections | Milestone | Adoption of the list of health care facilities |
| 43 | C2.1I8  Monitoring and reduction of GHG emissions in agriculture | Milestone | Purchase and installation of monitoring units for measuring GHG emissions from agriculture |
| 48 | C2.1I10  Market Management System (MMS) to facilitate the opening of the electricity market to competition | Milestone | Installation of the Market Management System |
| 74a | C2.3I4  Smart Water and Sewerage Networks Management | Target | Delivery and installation of photovoltaics at the Larnaca Wastewater Treatment Plant |
| 86 | C3.1R1  Move agricultural practices from the 20th century to the 21st century by investing in a national centre for excellence in agri-tech | Milestone | New joint Masters and/or PhDs in the wider domain of Agriculture |
| 132 | C3.2I4  Funding to organisations performing R&D activities on dual technologies | Milestone | Signing of grant agreements which commit 80% of total budget for funding to organisations performing R&D activities on dual technologies |
| 135 | C3.3R1  Facilitation of Strategic investments | Milestone | Organisational capacity’s enhancement for the facilitation of strategic investments |
| 140 | C3.3R4  Design and establish a National Promotional Agency | Milestone | Approval by the Council of Ministers of the roadmap for the creation and establishment of a National Promotional Agency |
| 147 | C3.3I4  Scheme for the digital upgrade of enterprises | Milestone | Publication of call for proposals following approval of the scheme by the Council of Ministers |
| 158 | C3.4R2  Regulate flexible working arrangements in the public sector | Milestone | Decision on flexible working arrangements in the public sector |
| 193 | C3.5R3  Strategy for addressing inadequacies of the property transaction system (title deeds) | Target | Reduction of backlog of cases for issuance of title deeds either by issuing title deeds or by rejecting the case |
| 197 | C3.5R4  New legal framework and system of exchange of data and credit bureau | Milestone | Entry into force of the framework and system of exchange of data legislation |
| 220 | C4.1I2  Upgrade internet connection to be “Gigabit-ready” and promote connectivity take-up | Target | Expansion of Gigabit-ready internet connection take-up by households |
| 229 | C4.2R3  Police Procedures digitalisation on Digipol | Milestone | Digipol prototype operational |
| 236 | C4.2I2  Digitalisation of the Cyprus Ports Authority | Target | Start of the digital upgrade of the Cyprus Ports Authority |
| 255 | C5.2R2  Flexible Work Arrangements in the Form of Telework | Milestone | Entry into force of the law for flexible work arrangements in the form of telework |
|  |  | Instalment Amount | EUR 89 251 156 |

1.5.Fifth Instalment (non-repayable support):

|  |  |  |  |
| --- | --- | --- | --- |
| Sequential Number | Related Measure (Reform or Investment) | Milestone / Target | Name |
|  |  |  |  |
| 9 | C1.1I3  Purchase/replacement of medical equipment in hospitals | Target | Health institutions having benefitted from the financial support scheme |
| 13 | C1.1I6  Deployment of generic cross border e-health services in Cyprus | Milestone | Completion of the analysis, design and development phase of the IT System for cross-border e-health services |
| 28a | C2.1I2  Promoting renewables and individual energy efficiency measures in dwellings and tackling energy poverty in households with vulnerable electricity consumers | Target | Dwellings and households with vulnerable electricity consumers (including people with disabilities) having improved their energy performance |
| 36 | C2.1I5  Energy Efficiency Upgrading of public buildings | Target | Completion of set up and installation of photovoltaics system at the Nicosia General Hospital |
| 38 | C2.1I6  Upgrading renewable energy and smart grids testing infrastructure at the University of Cyprus | Milestone | Signature of contracts for the installation of equipment to upgrade the electricity grid into a smart grid |
| 55 | C2.2R3  Progressively phase out the most polluting vehicles, especially in polluted urban areas | Milestone | Entry into force of the legislative/administrative acts related to the phasing out of the most polluting vehicles |
| 67 | C2.3I1  Choirokitia‐Famagusta Conveyor Replacement | Milestone | Preparation of tender documents and issue call for tenders |
| 89 | C3.1R3  Genetic improvement of the Cyprus sheep and goat population | Target | Upgrade of record keeping in farms and participation of farmers in AGRICYGEN project |
| 100 | C3.1I7  Scheme for the enhancement of the competitiveness and/or the energy efficiency of large enterprises in Cyprus | Milestone | Start of the grant scheme on large enterprises |
| 112 | C3.1I12  Waste management towards circular economy | Milestone | Signature of the contract for the installation of Green kiosks |
| 128 | C3.2I2  Innovation funding programmes for start-ups, innovative companies and SMEs | Target | Organisations supported to carry out R&I related activities |
| 156 | C3.4R1  Enhance the administrative capacity and improve the functioning of public administration for better policy making and implementation | Milestone | New human resources management framework for Cyprus Police |
| 163 | C3.4R5  Enhancement of the capacity of the Law Office | Milestone | New IT system for the Law Office |
| 167 | C3.4I3  Economic Policy Modelling Hub | Milestone | Setting up a Modelling Hub for Economic Policy Analysis |
| 180 | C3.4R8  Efficiency of Justice | Milestone | Entry into force of new Rules of Civil Procedure |
| 191 | C3.5R1     Completing the legal framework for Crisis Management for Credit Institutions | Milestone | Entry into force of the amendment of the national insolvency framework for credit institutions, and introduction of government tools for preservation of financial stability |
| 196 | C3.5R3  Strategy for addressing inadequacies of the property transaction system (title deeds) | Milestone | Review of the Streets and Building Regulation |
| 203 | C3.5R7  Strategy for Combating Financial Illiteracy | Milestone | Strategy for Combating Financial Illiteracy |
| 205 | C3.5R8     Enhancing supervision of Insurance and Pension Funds | Milestone | Supervisory tools including data collection and analysis tool |
| 206 | C3.5I1     Enhancement of the Supervisory Function of the Cyprus Securities and Exchange Commission | Milestone | Digital system for supervision of transactions for the Cyprus Securities and Exchange Commission |
| 207b | C3.5R9 Improving tax collection and effectiveness of the Tax Department | Milestone | Purchase of the new building for the integrated Nicosia District Office and Large Taxpayers’ Office |
| 212 | C3.5I2 Modernisation of Customs and Electronic Payment System | Target | Putting into operation the information systems– envisaged under the Union Customs Code (UCC) |
| 217 | C4.1I1  Expansion of Very High Capacity Networks in underserved areas | Milestone | Start of very high capacity networks’ deployment in underserved areas |
| 225 | C4.2R1  Digital Services Factory | Target | Expansion of delivery of government services online through the Digital Services Factory |
| 231 | C4.2R4  Setting up the beneficial ownership registry | Milestone | Beneficial ownership registry available for use |
| 241 | C5.1R2  A new teacher and school evaluation system | Milestone | Entry into force of the law for establishing a new Teacher and School Evaluation mechanism |
| 243 | C5.1R3  Gradual extension of free compulsory pre-primary education from the age of four | Milestone | Entry into force of the new Law regarding the gradual extension of free compulsory pre-primary education from the age of four years and adoption of aid schemes by the Council of Ministers |
| 28b | C6.1I1 Scaled-up measure: Promoting renewables and individual energy efficiency measures in dwellings and tackling energy poverty in households with vulnerable electricity consumers | Target | Dwellings and households with vulnerable electricity consumers having improved their energy performance |
|  |  | Instalment Amount | EUR 139 544 839 |

1.6.Sixth Instalment (non-repayable support):

|  |  |  |  |
| --- | --- | --- | --- |
| Sequential Number | Related Measure (Reform or Investment) | Milestone / Target | Name |
|  |  |  |  |
| 19 | C2.1R1  Green Taxation | Milestone | Entry into force of a law introducing a carbon tax for fuels, a levy on water and a charge on household/ landfill waste |
| 40 | C2.1I7  Mass installation and operation by the Distribution System Operator (DSO) of Smart Metering Infrastructure (Advanced Metering Infrastructure) | Milestone | Contract Signature for smart electricity metering infrastructure |
| 52 | C2.2R1  Establishment of an Intelligent Transport System using Digital Twin technologies | Target | Delivery and installation of at least 150 sensors |
| 57 | C2.2I1  Implementation of Sustainable Urban Mobility Projects (SUMP) and accessibility enhancing measures | Milestone | Contracts signature for the construction work of sustainable transport infrastructure and ancillary installations |
| 69a | C2.3I2  Water Treatment Plants: upgrade for water quality improvement | Milestone | Completion of the works for the installation of activated carbon polishing units in Tersefanou, Asprokremmos and Limassol Water Treatment Plants |
| 72 | C2.3I3  Integrated Monitoring and Control Management System for the Water Development Department’s infrastructure | Target | Delivery and installation of at least 50% of the equipment |
| 78 | C2.3I5  Anti-flood and water collection measures | Milestone | Completion of construction works for the rainwater collection and recycling system in Kladeri area |
| 80 | C2.3I6  Enhance water security for Nicosia and Larnaca regions | Target | Completion of construction of two glass lined steel reservoirs |
| 103 | C3.1I8  Enhancing the added value of the tourism sector with emphasis on the country side, mountainous and remote areas | Target | Grant to SMEs to promote the tourism sector |
| 144 | C3.3I2  Creation of a Regulatory Sandbox to enable FinTech | Milestone | Regulatory Sandbox with a view on FinTech and innovative technologies |
| 169 | C3.4R6  New legal framework for Local Authorities and relevant support measures | Milestone | New legal framework on local authorities |
| 171 | C3.4R7  Urban land consolidation | Milestone | Entry into force of the law on urban land consolidation |
| 181 | C3.4R8  Efficiency of Justice | Target | Reducing the backlog of cases and appeals |
| 183 | C3.4R9  Digital transformation of courts | Milestone | e-justice system |
| 208 | C3.5R9     Improving tax collection and effectiveness of the Tax Department | Milestone | Integration of operations of the direct tax administration department within the ITAS |
| 216 | C4.1R2  Empower the National Broadband Competence Office (DEC of the DMRIDP) | Milestone | Entry into force of the administrative acts for very high capacity networks’ deployment |
| 246a | C5.1R4  Digital transformation of school units with the aim of enhancing digital skills and skills related to STEM education | Target | Classrooms digitally equipped |
| 274 | C6.1I3 Promoting extensive energy upgrading of housing stock | Milestone | Publication of call for proposals for the support scheme |
|  |  | Instalment Amount | EUR 92 274 759 |

1.7.Seventh Instalment (non-repayable support):

|  |  |  |  |
| --- | --- | --- | --- |
| Sequential Number | Related Measure (Reform or Investment) | Milestone / Target | Name |
|  |  |  |  |
| 1 | C1.1R1  National Centre for Clinical Evidence and Quality Improvement | Target | Clinical protocols prepared, audited and peer reviewed |
| 25 | C2.1I1  Promoting energy efficiency investments in SMEs and non-profit organisations | Target | Entities (SMEs, non-profit organisations) having implemented energy efficiency interventions |
| 31a | C2.1I3  Encouraging the use of renewables and energy savings by local/wider public authorities and facilitating the transition of local communities towards climate mitigation & adaptation | Target | Investments undertaken by local and wider public authorities that have improved their energy performance |
| 33 | C2.1I4  Encourage the reduction of CO2 emissions in businesses | Target | Undertakings having developed their GHG emissions reduction action plans |
| 39 | C2.1I6  Upgrading renewable energy and smart grids testing infrastructure at the University of Cyprus | Milestone | Delivery, successful installation and acceptance of the equipment for smart grids |
| 41 | C2.1I7  Mass installation and operation by the Distribution System Operator (DSO) of Smart Metering Infrastructure (Advanced Metering Infrastructure) | Target | Delivery and installation of smart meters |
| 54 | C2.2R2  Provide the regulatory framework for an interoperable and effective electric vehicle (EV) recharging infrastructure and an efficient EV recharging market | Milestone | Entry into force of legislation related to electric vehicle charging points |
| 60 | C2.2I2  Creation of electro-mobility infrastructure | Target | Installation of at least 330 charging points, due to the support granted |
| 62a | C2.2I3  Promote widespread use of Electric Vehicles (EVs) | Target | Purchase of electric vehicles, electric bicycles, due to the support granted |
| 64 | C2.2I3  Promote widespread use of Electric Vehicles (EVs) | Target | Scrapping of high emission vehicles, due to the support granted |
| 75 | C2.3I4  Smart Water and Sewerage Networks Management | Target | Delivery and installation of at least 200 quality and pressure sensors |
| 98 | C3.1I6  Scheme for modernisation and digitalisation of enterprises engaged in manufacturing and trading of agricultural products | Target | Grants to SMEs engaged with trade and production of agricultural products |
| 101a | C3.1I7  Scheme for the enhancement of the competitiveness and/or the energy efficiency of large enterprises in Cyprus | Target | Grants to large enterprises |
| 107 | C3.1I10  Enrichment of the tourism product in rural, mountainous and remote areas | Milestone | Aphrodite Route |
| 124 | C3.2R3  Policies to foster access to publicly funded research infrastructure and laboratories | Milestone | Collaboration of Research Performing Organisations with business and spin-offs |
| 142 | C3.3R5  Strategic Investor of the Cyprus Stock Exchange | Milestone | Selection of a strategic investor to buy a controlling stake in Cyprus Stock Exchange |
| 159 | C3.4R2  Regulate flexible working arrangements in the public sector | Milestone | Implementation of flexible working arrangements |
| 170 | C3.4R6  New legal framework for Local Authorities and relevant support measures | Target | Number of local authority staff participating in capacity building |
| 174 | C3.4I4  Enhancing e-system for issuing building permits | Milestone | Enhancement of planning and control and project management functionalities of Hippodamos |
| 177 | C3.4I6  Regeneration and Revitalisation of Nicosia Inner City | Target | Rooms renovated and converted to student dorms |
| 198 | C3.5R4  New legal framework and system of exchange of data and credit bureau | Milestone | Upgraded digital system of exchange of data and credit bureau |
| 200 | C3.5R5  Action plan for the development of a liability monitoring register | Milestone | Action plan for the development of a liability monitoring register |
| 210 | C3.5R10     Addressing Aggressive Tax Planning | Milestone | Entry into force of the law to tackle aggressive tax planning via payments to low tax jurisdictions |
| 215 | C4.1R1  Empower the National Regulatory Authority (OCECPR) | Milestone | The web portal on broadband and infrastructure mapping is operational and accessible to the target audience |
| 218 | C4.1I1  Expansion of Very High Capacity Networks in underserved areas | Target | Expansion of very high capacity networks’ deployment in underserved areas |
| 227 | C4.2R2  Definition and implementation of a new cloud policy with regard to government IT systems and services | Milestone | The government cloud (G-cloud) is operational |
| 234 | C4.2I1  Digitalisation in various Central Government Ministries - Services | Target | Advancement of the digital upgrade of a number of central government ministries and departments |
| 237 | C4.2I2  Digitalisation of the Cyprus Ports Authority | Target | Advancement of the digital upgrade of the Cyprus Ports Authority |
| 239a | C5.1R1  Addressing skills mismatch between education and labour market (Secondary and Higher Education) | Milestone | Implementation of key measures from the National Action Plan |
| 247 | C5.1R4  Digital transformation of school units with the aim of enhancing digital skills and skills related to STEM education | Target | Curriculum transformation and production of educational material for digital skills and STEM methodology |
| 253 | C5.1I2  Skilling, Reskilling and Upskilling | Target | Completion of trainings for at least 11 500 participants |
| 258 | C5.2I1  Improving the effectiveness of the Department of Labour and Public Employment Services and reinforcing support for young people | Target | Implementation of completed, fully operational platforms |
| 261 | C5.2I2  Establishment of multifunctional centres and childcare centres | Milestone | Adoption of a national strategy on early childhood education and care (ECEC) and an accompanying action plan by the Council of Ministers |
| 262 | C5.2I2  Establishment of multifunctional centres and childcare centres | Target | Grant awarded to at least ten local authorities/ Non-Governmental Organisations for establishing or enhancing Multifunctional Centres or Child Centres |
| 264 | C5.2I3  Establishment of Home structures for children, adolescent with conduct disorders and persons with disabilities and people in need of long term care (LTC) | Target | Buildings for the needs of children or persons with disabilities and support for homes for children, adolescents with conduct disorders and people in need of long-term care (signing of contracts/funding agreements) |
| 267 | C5.2I4  Child Centres in Municipalities | Target | Construction of at least four child centres |
| 31b | C6.1I2 Scaled-up measure: Encouraging the use of renewables and energy savings by local/wider public authorities | Target | Reduced primary energy consumption due to investments undertaken by local and wider public authorities, improving their energy performance |
| 62b | C6.1I4 Scaled-up measure: Promote widespread use of Electric Vehicles (EVs) | Target | Purchase of electric vehicles, electric bicycles due to the support granted |
| 101b | C6.1I5 Scaled-up measure: Scheme for the enhancement of the competitiveness and the energy efficiency of large enterprises in Cyprus | Target | Grants to large enterprises |
| 276 | C6.1I7 Thematic research in enterprises for energy production, storage, transmission and distribution solutions | Milestone | Signature of grant agreements for the whole budget |
|  |  | Instalment Amount | EUR 168 174 305 |

1.8.Eighth Instalment (non-repayable support):

|  |  |  |  |
| --- | --- | --- | --- |
| Sequential Number | Related Measure (Reform or Investment) | Milestone / Target | Name |
|  |  |  |  |
| 6 | C1.1I1  New facilities for the Cyprus Blood Establishment and procurement of the latest technology attendant equipment | Milestone | New blood establishment facilities including all equipment are fully operational |
| 11 | C1.1I4  Accreditation of public and private hospitals | Target | Health institutions having benefitted from the scheme covering accreditation related costs |
| 14 | C1.1I6  Deployment of generic cross border e-health services in Cyprus | Milestone | Full operation of cross-border healthcare data exchange |
| 66 | C2.3R1  Water Resource Management Reform | Milestone | Adoption of an action plan on water resource management |
| 69b | C2.3I2  Water Treatment Plants: upgrade for water quality improvement | Milestone | Completion of the works for the replacement of the chlorination infrastructure for the five WTPs |
| 81 | C2.3I6  Enhance water security for Nicosia and Larnaca regions | Target | Completion of construction of three glass lined steel reservoirs and 1 concrete water reservoir |
| 84 | C2.3I8  Protection of the marine ecosystem from hazards through oil spills | Milestone | Delivery, quality inspection to verify their operational effectiveness and acceptance of three vessels and two aerial spraying systems |
| 94 | C3.1I2  Enhancement of isotopic database of traditional Cypriot products | Target | Local traditional foods/ drinks connected to the system |
| 111 | C3.1R5  Establishment of a Coordinating Body between central and local government | Milestone | Legislation on coordination between Central and Local Government |
| 161 | C3.4R3  Introduce new framework for evaluation and selection process for filling public service vacancies and new regulations for the evaluation of employees’ performance | Milestone | New framework for performance evaluation and filling of vacancies in the public service. |
| 165 | C3.4I2  Digitalisation of the law-making process | Milestone | Implementation of the Cyprus Legislation Preparation Platform |
| 184 | C3.4R9  Digital transformation of courts | Milestone | Digital audio recording in court proceedings |
| 202 | C3.5R6 Reinforcing and strengthening the insolvency framework | Milestone | Operation of all digital systems developed for the Department of Insolvency |
| 204 | C3.5R8     Enhancing supervision of Insurance and Pension Funds | Target | Strengthening the human resources of the Registrar of Occupational Retirement Benefits Fund (RORBF) and the Insurance Companies Control Service (ICCS) |
| 221 | C4.1I2  Enhance building cabling to be “Gigabit-ready” and promote connectivity take-up | Target | Completion of intra-building Gigabit-ready cabling |
|  |  | Instalment Amount | EUR 80 846 787 |

1.9.Ninth Instalment (non-repayable support):

|  |  |  |  |
| --- | --- | --- | --- |
| Sequential Number | Related Measure (Reform or Investment) | Milestone / Target | Name |
|  |  |  |  |
| 2a | C1.1R1  National Centre for Clinical Evidence and Quality Improvement | Target | Clinical protocols prepared, audited and peer reviewed |
| 2b | C1.1R1  National Centre for Clinical Evidence and Quality Improvement | Milestone | Development of IT system including an e-learning platform completed and system is operational |
| 4 | C1.1R2  Design of an Electronic platform for the surveillance of Nosocomial Antibiotic Consumption and Healthcare – Associated Infections | Milestone | Electronic platform including monitoring system is fully operational |
| 8 | C1.1I2  Cyprus Innovative Public Health information and communications technology (ICT) System | Target | Sentinels entering data in the Influenza Sentinel Surveillance System module |
| 10 | C1.1I3  Purchase/replacement of medical equipment in hospitals | Target | Health institutions having benefitted from the financial support scheme |
| 15 | C1.1I7  Public warning system for supporting emergency operations through SMS | Milestone | Newly established public warning system and its monitoring system are fully operational |
| 26 | C2.1I1  Promoting energy efficiency investments in SMEs and non-profit organisations | Target | Entities (SMEs,non-profit organisations) having implemented energy efficiency interventions |
| 37 | C2.1I5  Energy Efficiency Upgrading of public buildings | Target | Completion of installation of photovoltaic systems in water pump stations and fire stations |
| 44 | C2.1I8  Monitoring and reduction of GHG emissions in agriculture | Target | Reduction of GHG emissions from agriculture |
| 46 | C2.1I9  Forests fire protection | Milestone | Delivery of firefighting aircraft, vehicles and equipment |
| 48a | C2.1I10  Market Management System (MMS) to facilitate the opening of the electricity market to competition | Milestone | Go live of the MMS and related training of the personnel. |
| 53 | C2.2R1  Establishment of an Intelligent Transport System using Digital Twin technologies | Target | Delivery and installation of a total of 300 sensors |
| 56 | C2.2R3  Progressively phase out the most polluting vehicles, especially in polluted urban areas | Milestone | Implementation of at least two measures aiming at the exclusion of polluting vehicles |
| 70 | C2.3I2  Water Treatment Plants: upgrade for water quality improvement | Target | Completion of extension works and automation system at Asprokremmos Water Treatment Plant |
| 77b | C2.3I5  Anti-flood and water collection measures | Milestone | Completion of construction works of drainage network and reconstruction of streets and pavements in areas of Nicosia |
| 79 | C2.3I5  Anti-flood and water collection measures | Milestone | Completion of construction works for the flood channel in Livadia |
| 108 | C3.1I10  Enrichment of the tourism product in rural, mountainous and remote areas | Target | Grants to enterprises and local community boards to promote micro and small businesses in the creative and manufacturing sectors, such as artists, handcrafts and traditional products |
| 115 | C3.1I12  Waste management towards circular economy | Target | Completion of installation and start of operation of the green kiosks |
| 126 | C3.2I1  Set up and operate a central Knowledge Transfer Office (KTO) | Target | Case files closed attesting provision of relevant knowledge transfer services |
| 137 | C3.3R2  Enhancing Fast-Track Business Activation Mechanism | Target | Establishment of a platform where investors can track their online application and interact with the competent authorities and assessments of applications for investment through the platform |
| 138 | C3.3R3  Modernisation of the Companies Law | Milestone | Submission of the draft law to the Parliament for approval, restructuring the Companies Law |
| 141 | C3.3R4  Design and establish a National Promotional Agency | Milestone | Start of operations of Cyprus National Promotional Agency |
| 157 | C3.4R1  Enhance the administrative capacity and improve the functioning of public administration for better policy making and implementation | Milestone | Implementation of the Action Plan on the efficient management of human resource issues in the national public administration |
| 162 | C3.4R4  Strengthen administrative capacity and transparency through the professionalisation of public procurement and further digitalisation of its process | Milestone | New integrated e-procurement system |
| 166 | C3.4I2  Digitalisation of the law-making process | Milestone | Digitalisation of laws & regulations in the new platform |
| 168 | C3.4I3  Economic Policy Modelling Hub | Target | Number of developed impact assessment models and data analysis tools |
| 172 | C3.4R7  Urban land consolidation | Target | Number of master plans for urban planning |
| 185 | C3.4I7  Training of judges | Target | Training of judges |
| 213 | C3.5I2     Modernisation of Customs and Electronic Payment System | Target | Putting into operation of the information systems envisaged under the UCC |
| 219 | C4.1I1  Expansion of Very High Capacity Networks in underserved areas | Target | Completion of very high capacity networks’ deployment in underserved areas |
| 228 | C4.2R2  Definition and implementation of a new cloud policy with regard to government IT systems and services | Target | The government cloud (G-cloud) in two data centres is operational and offering cloud services |
| 230 | C4.2R3  Police Procedures digitalisation on Digipol | Target | Citizens use Digipol |
| 235 | C4.2I1  Digitalisation in various Central Government Ministries - Services | Target | Finalisation of the digital upgrade of a number of central government ministries and departments |
| 238 | C4.2I2  Digitalisation of the Cyprus Ports Authority | Target | Finalisation of the digital upgrade of the Cyprus Ports Authority |
| 240 | C5.1R1  Addressing skills mismatch between education and labour market (Secondary and Higher Education) | Target | Secondary education teaching staff trained |
| 242 | C5.1R2  A new teacher and school evaluation system | Target | Training of teaching staff |
| 250 | C5.1R5  E-skills Action Plan – Implementation of specific actions | Milestone | Implementation of key measures from the e-Skills Action Plan |
| 254 | C5.1I2  Skilling, Reskilling and Upskilling | Target | Completion of trainings for at least 25 600 participants |
| 256 | C5.2R2  Flexible Work Arrangements in the Form of Telework | Target | Grant awarded for at least 400 persons in telework |
| 259 | C5.2I1  Improving the effectiveness of the Department of Labour and Public Employment Services and reinforcing support for young people | Target | Grant awarded to employers for hiring at least 600 young people not in employment or in education or training (NEETs) |
| 269 | C5.2I5  Construction of Two Model Special Education Schools | Milestone | Completion of construction of Apostolos Loukas & Red Cross Special needs school |
| 272 | C6.1R1 Regulating and facilitating the participation of Active Customers, Renewable Self-consumers, Citizen Energy Communities, Renewable Energy Communities and Demand Response through Cumulative Representation in the electricity market | Milestone | Expanding the competencies of the single contact point established as per the Renewable Energy Directive (EU) 2018/2001, to also serve as a contact point regarding the renewable and citizens communities, Active customers and Renewable self-consumers |
| 274 | C6.1R2 Establishment of the regulatory framework for the connection of EV recharging points to the distribution network | Milestone | Regulatory Decision/s for the connection of EV recharging points to the distribution network |
|  |  | Instalment Amount | EUR 60 135 712 |

1.10.Tenth Instalment (non-repayable support):

|  |  |  |  |
| --- | --- | --- | --- |
| Sequential Number | Related Measure (Reform or Investment) | Milestone / Target | Name |
|  |  |  |  |
| 12 | C1.1I4  Accreditation of public and private hospitals | Target | Health institutions having benefitted from the scheme covering accreditation related costs |
| 20 | C2.1R1  Green Taxation | Milestone | Impact assessment report measuring the reform’s effect on the environment and the economy |
| 29a | C2.1I2  Promoting renewables and individual energy efficiency measures in dwellings and tackling energy poverty in households with vulnerable electricity consumers | Target | Dwellings and households with vulnerable electricity consumers (including people with disabilities) having improved their energy performance |
| 32a | C2.1I3  Encouraging the use of renewables and energy savings by local/wider public authorities and facilitating the transition of local communities towards climate mitigation & adaptation | Target | Investments undertaken by local authorities that have improved their energy performance |
| 32c | C2.1I3  Encouraging the use of renewables and energy savings by local/wider public authorities and facilitating the transition of local communities towards climate mitigation & adaptation | Target | Grant scheme to support sustainable climate adaptation investments in local (Community) Councils |
| 42 | C2.1I7  Mass installation and operation by the Distribution System Operator (DSO) of Smart Metering Infrastructure (Advanced Metering Infrastructure) | Target | Delivery and installation of smart meters |
| 47 | C2.1I9  Forests fire protection | Milestone | Completion of services |
| 58 | C2.2I1  Implementation of Sustainable Urban Mobility Projects (SUMP) and accessibility enhancing measures | Target | Completion of construction work for at least 52km of sustainable transport routes |
| 59 | C2.2I1  Implementation of Sustainable Urban Mobility Projects (SUMP) and accessibility enhancing measures | Target | Completion of construction work for at least 644 ancillary installations related to sustainable transport |
| 61 | C2.2I2  Creation of electro-mobility infrastructure | Target | Installation of at least 1 200 charging points, due to the support granted |
| 63a | C2.2I3  Promote widespread use of Electric Vehicles (EVs) | Target | Purchase of electric vehicles, electric bicycles, due to the support granted |
| 65 | C2.2I3  Promote widespread use of Electric Vehicles (EVs) | Target | Scrapping of high emission vehicles, due to the support granted |
| 68 | C2.3I1  Choirokitia‐Famagusta Conveyor Replacement | Target | Installation of new pipeline with total length of 20km |
| 73 | C2.3I3  Integrated Monitoring and Control Management System for the Water Development Department’s infrastructure | Milestone | Completion of a fully functional Integrated Monitoring and Control Water Management System |
| 74b | C2.3I4  Smart Water and Sewerage Networks Management | Target | Delivery and installation of biogas unit at the Larnaca Wastewater Treatment Plant |
| 76a | C2.3I4  Smart Water and Sewerage Networks Management | Target | Installation and operation of at least 100 000 smart meters |
| 76b | C2.3I4  Smart Water and Sewerage Networks Management | Target | Development of Digital Twin decision support tool and data bank in Larnaca and design of a customised software solution in Limassol |
| 88 | C3.1R2  On-line platform for improving the trade and information symmetry in the fresh produce supply chain | Milestone | Platform for recording transactions in the local fresh produce market |
| 90 | C3.1R3  Genetic improvement of the Cyprus sheep and goat population | Target | Adoption of advanced recording and genomic evaluation processes, and selection of the best performing animals |
| 99 | C3.1I6  Scheme for modernisation and digitalisation of enterprises engaged in manufacturing and trading of agricultural products | Target | Grants to SMEs engaged with trade and production of agricultural products |
| 102a | C3.1I7  Scheme for the enhancement of the competitiveness and/or the energy efficiency of large enterprises in Cyprus | Target | Grants to large enterprises |
| 104a | C3.1I8  Enhancing the added value of the tourism sector with emphasis on the country side, mountainous and remote areas | Target | Grant to hotels to promote the tourism sector |
| 104b | C3.1I8  Enhancing the added value of the tourism sector with emphasis on the country side, mountainous and remote areas | Target | Grants to promote medical tourism |
| 106 | C3.1I9  Promotion of circular economy in hotel establishments | Target | Coaching scheme for circular economy |
| 110 | C3.1R4  Enhancement of circular economy in the Industry | Target | Aid for SMEs which are moving into a circular operating model |
| 121 | C3.2R1  National R&I Policy and policy tools | Milestone | Completion of the Action Plan for the R&I Strategy |
| 129 | C3.2I2  Innovation funding programmes for start-ups, innovative companies and SMEs | Target | Organisations supported to carry out R&I related activities |
| 131a | C3.2I3  R&I funding program on green transition | Target | Organisations supported by grants on green transition R&I activities |
| 133 | C3.2I4  Funding organisations performing R&D activities on dual technologies | Target | Funding for the development of classified Laboratories |
| 139 | C3.3R3  Modernisation of the Companies Law | Milestone | Entry into force of the Companies Law |
| 148 | C3.3I4  Scheme for the digital upgrade of enterprises | Target | SMEs supported following submission of payment applications. |
| 152 | C3.3I6  State funded equity fund | Target | Investees supported through the Fund |
| 176 | C3.4I5  Smart cities | Target | Development of mobile applications developed as part of the smart cities initiative and installation of smart sensors in service as part of the smart cities initiative |
| 178 | C3.4I6  Regeneration and Revitalisation of Nicosia Inner City | Target | Rooms renovated and converted to student dorms |
| 179 | C3.4I6  Regeneration and Revitalisation of Nicosia Inner City | Milestone | Renovation of Faneromeni School |
| 182 | C3.4R8  Efficiency of Justice | Target | Further reducing the backlog of cases and appeals |
| 211 | C3.5R10     Addressing Aggressive Tax Planning | Milestone | Entry into force of legislative changes addressing the findings of an independent evaluation on the effectiveness of measures related to aggressive tax planning |
| 226 | C4.2R1  Digital Services Factory | Target | Delivery online of at least 70 previously non-digital services to the public through the Digital Services Factory |
| 239b | C5.1R1  Addressing skills mismatch between education and labour market (Secondary and Higher Education) | Target | Completion of the in-job shadowing programme |
| 239c | C5.1R1  Addressing skills mismatch between education and labour market (Secondary and Higher Education) | Target | Laboratories equipped and updated |
| 244 | C5.1R3  Gradual extension of free compulsory pre-primary education from the age of four | Target | Children aged between 4 years and 4 years and 8 months enrolled in public, community and private kindergartens |
| 245 | C5.1R3  Gradual extension of free compulsory pre-primary education from the age of four | Target | At least 675 new places in public kindergartens. Adoption by the Council of Ministers of an action plan which shall describe plans for the gradual expansion of the capacity in public kindergartens and the gradual corresponding reduction of the two aid schemes from the time of the entry into force of the law until the completion of the decrease in compulsory age. |
| 246b | C5.1R4  Digital transformation of school units with the aim of enhancing digital skills and skills related to STEM education | Target | Partial reimbursement for the purchase of digital equipment for pupils |
| 248 | C5.1R4  Digital transformation of school units with the aim of enhancing digital skills and skills related to STEM education | Target | Teachers benefitting from In-Service Training & Professional Development |
| 252 | C5.1I1  Construction of one Model Technical School | Milestone | Completion of construction of one Technical School |
| 260 | C5.2I1  Improving the effectiveness of the Department of Labour and Public Employment Services and reinforcing support for young people | Target | Coaching and career guidance for young people not in employment or in education or training (NEETs) |
| 263 | C5.2I2  Establishment of multifunctional centres and childcare centres | Target | Grant awarded to at least 27 local authorities/ Non-Governmental Organisations for establishing or enhancing Multifunctional Centres or Child Centres |
| 265 | C5.2I3  Establishment of Home structures for children, adolescent with conduct disorders and persons with disabilities and people in need of long term care (LTC) | Target | Buildings for the needs of children or persons with disabilities and support for homes for children, adolescents with conduct disorders and people in need of long-term care |
| 29b | C6.1I2 Scaled-up measure: Promoting renewables and individual energy efficiency measures in dwellings and tackling energy poverty in households with vulnerable electricity consumers | Target | Dwellings and households with vulnerable electricity consumers having improved their energy performance |
| 32b | C6.1I2 Scaled-up measure: Encouraging the use of renewables and energy savings by local/wider public authorities | Target | Reduced primary energy consumption due to investments undertaken by local and wider public authorities, improving their energy performance |
| 275 | C6.1I3 Promoting extensive energy upgrading of housing stock | Target | Households being energy renovated, improving their energy performance |
| 63b | C6.1I4 Scaled-up measure: Promote widespread use of Electric Vehicles (EVs) | Target | Purchase of electric vehicles, electric bicycles due to the support granted |
| 102b | C6.1I5 Scaled-up measure: Scheme for the enhancement of the competitiveness and the energy efficiency of large enterprises in Cyprus | Target | Grants to large enterprises |
| 131b | C6.1I6 Scaled-up measure: Thematic research and innovation funding program on green transition | Target | Organisations supported by grants on green transition R&I activities |
| 277 | C6.1I7 Thematic research in enterprises for energy production, storage, transmission and distribution solutions | Target | Organisations supported by grants on energy production, storage, transmission and distribution solutions R&I activities |
|  |  | Instalment Amount | EUR 102 121 941 |

2.Loan

The instalments referred to in Article 3(2) shall be organised in the following manner:

2.1.First Instalment (loan support):

|  |  |  |  |
| --- | --- | --- | --- |
| Sequential Number | Related Measure (Reform or Investment) | Milestone / Target | Name |
|  |  |  |  |
| 16 | C1.1R3    Gradually shifting the healthcare provision and reimbursement framework towards value-based models. | Milestone | Value-based reimbursement to be reflected for primary and in-patient care |
| 49 | C2.1I11  Ending energy isolation - Project of Common Interest "EuroAsia Interconnector" | Milestone | Start of the construction works of the HVDC Converter Station in Kofinou and the onshore infrastructure in Cyprus |
| 91 | C3.1I1  Marine aquaculture construction | Milestone | Construction of the collaborative marine aquaculture |
| 270 | C5.2R1  Reform of the Social Insurance System and Restructuring of the Social Insurance Services | Milestone | Entry into force of the revised Social Insurance Law |
|  |  | Instalment Amount | EUR 57 471 264 |

2.2.Second Instalment (loan support):

|  |  |  |  |
| --- | --- | --- | --- |
| Sequential Number | Related Measure (Reform or Investment) | Milestone / Target | Name |
|  |  |  |  |
| 17 | C1.1I5     Enhancement, modernisation and upgrade of Cyprus State Hospitals | Target | Enhanced, constructed and/or upgraded State hospitals |
| 153 | C3.3I1  Integrated Information system for the Department of Registrar of Companies and Intellectual Property | Milestone | System hardware and software installation and networking completed |
|  |  | Instalment Amount | EUR 44 951 264 |

2.3.Third Instalment (loan support):

|  |  |  |  |
| --- | --- | --- | --- |
| Sequential Number | Related Measure (Reform or Investment) | Milestone / Target | Name |
|  |  |  |  |
| 50 | C2.1I11  Ending energy isolation - Project of Common Interest "EuroAsia Interconnector" | Milestone | Completion of construction of converter station |
| 116a | C3.1I11    Improvement and extension of the Cyprus Green Points Network and creation of a network of Collection Points and Recycling Corners | Target | Completion of construction, expansion and start of operation of four Green Points |
|  |  | Instalment Amount | EUR 37 294 483 |

2.4.Fourth Instalment (loan support):

|  |  |  |  |
| --- | --- | --- | --- |
| Sequential Number | Related Measure (Reform or Investment) | Milestone / Target | Name |
|  |  |  |  |
| 18 | C1.1I5     Enhancement, modernisation and upgrade of Cyprus State Hospitals | Target | Enhanced, constructed and/or upgraded State hospitals |
| 51 | C2.1I11  Ending energy isolation - Project of Common Interest "EuroAsia Interconnector" | Milestone | Completed and fully operational facility of the electricity interconnection between Cyprus-Crete (Greece) |
| 92 | C3.1I1  Marine aquaculture construction | Milestone | Operational collaborative marine aquaculture Infrastructure |
| 116b | C3.1I11Improvement and extension of the Cyprus Green Points Network and creation of a network of Collection Points and Recycling Corners | Milestone | Completion of construction, expansion and start of operation of a network of Collection Points and Recycling Corners |
| 117 | C3.1I11     Improvement and extension of the Cyprus Green Points Network and creation of a network of Collection Points and Recycling Corners | Target | Completion of construction, expansion and operation of 14 Green Points |
| 154 | C3.3I1  Integrated Information system for the Department of Registrar of Companies and Intellectual Property | Target | Training of personnel |
| 190 | C3.4I9  Aid Scheme for the private and public sector for certification with ISO 37001 (Anti i  Bribery) | Target | ISO 37001 anti-bribery management systems |
| 271 | C5.2R1  Reform of the Social Insurance System and Restructuring of the Social Insurance Services | Milestone | Completion and go-live of the Integrated Social Security Information System including payment module, benefits administration module, data analytics and interoperability with other systems. |
|  |  | Instalment Amount | EUR 60 602 989 |

 

SECTION 3: ADDITIONAL ARRANGEMENTS

1.Arrangements for monitoring and implementation of the recovery and resilience plan

The monitoring and implementation of the recovery and resilience plan of Cyprus has been set out in the Council of Ministers decision of 14 May 2021, which approved the plan. They shall take place in accordance with the following arrangements:

·The Monitoring Committee, chaired by the Director General of the Directorate General Growth, Ministry of Finance and attended by the Directors-General of Ministries and Deputy Ministries involved in the plan, shall be responsible for centrally monitoring progress in implementation, resolving issues and responding to risks at the highest technical level. It shall convene at least before each submission to the Commission of requests for payment and progress reports provided for under Regulation (EU) 2021/241. It may rely on reporting and other support from the Coordinating Authority.

·The Coordinating Authority, which is the Directorate for Recovery and Resilience of the Directorate General Growth, shall be responsible for the monitoring and implementation of the recovery and resilience plan at operational level. Specifically, the Coordinating Authority is responsible for monitoring, verifying and certifying the achievement of the milestones and targets of measures of the plan and ensuring the timely submission of all information described in Article 22(2), point (d) of Regulation (EU) 2021/241. In performing its monitoring functions, the Coordinating Authority is assisted by two specialised Monitoring Bodies designated for specific measures of the plan.

·The National Control and Audit Coordinator for the implementation of the plan, which is the Verifications and Certification Directorate of the Treasury of the Republic of Cyprus, shall be responsible for supporting the Coordinating Authority in overseeing controls by all stakeholders, including Implementing Bodies, in accordance with the management and control system of the plan and the national and EU legislation. In that respect, it shall also monitor the status of the findings of ex post audits, acting as the intermediate body between the Coordinating Authority and the Internal Audit Service of the Republic of Cyprus and the Audit Office of the Republic of Cyprus (together, “the audit bodies”). The National Control and Audit Coordinator shall not be involved in the planning and execution of the audits, which is within the sole responsibility of the audit bodies. It shall manage and process all information described in Article 22(2), point (d) of Regulation (EU) 2021/241, collected by the Implementing Bodies. In this respect, it has the responsibility to oversee the treatment of serious irregularities, meaning fraud, corruption and conflicts of interests, and ensure that double funding is avoided through controls of the information submitted by the Implementing Bodies.

·The Implementing Bodies shall have the first line responsibility to prevent, detect, report and correct conflicts of interest, corruption and fraud, and avoid double funding. To that end, they shall undertake first level controls and verifications of the physical and financial aspect of the measures under their responsibility and regularly update the Coordinating Authority and the specialised Monitoring Bodies, where relevant, regarding progress in achieving the milestones and targets of the measures under their responsibility and by providing all the necessary supporting documentation.

·The Internal Audit Service of the Republic of Cyprus is responsible for conducting ex post internal audits in any central government body including the audit of the achievement of milestones and targets of the plan, through an appropriate sampling method. The Audit Office of the Republic of Cyprus is responsible for conducting financial, performance and compliance ex post (and in some cases real time) external audits for projects implemented under the national budget through an appropriate sampling method which complies with the International Organisation of Supreme Audit Institutions (INTOSAI) standards. It shall be ensured that the selected sample necessarily includes a sufficient number of measures implemented through the the recovery and resilience plan.

·The Coordinating Authority shall be the body drawing up the requests for payment to the European Commission. The Coordinating Authority shall be supported by the National Control and Audit Coordinator in retrieving the results of audit procedures undertaken by the audit bodies (including the Internal Audit Service and the Audit Office), as well as all cases of serious irregularities, including cases of fraud or suspicion of fraud, corruption and conflicts of interest, that shall feed into the summary of audits, which shall accompany payment applications.

2.Arrangements for providing full access by the Commission to the underlying data

A dedicated Monitoring Information System (MIS) shall be used by the Directorate for Recovery and Resilience of the Directorate General Growth for the implementation of the plan. Its core functionalities, or a contingent repository system with the required functionalities, shall be in place as attested by an audit report by 31 March 2022. In terms of required functionalities, a repository system shall record and store the relevant data related to the implementation of the recovery and resilience plan, in particular on the achievement of milestones and targets, data on final recipients, contractors, subcontractors and beneficial owners in line with Article 22(2), point (d), sections (i) to (iii) of Regulation (EU) 2021/241, by the first payment request.

In accordance with Article 24(2) of Regulation (EU) 2021/241, upon completion of the relevant agreed milestones and targets in Section 1 of this Annex, Cyprus shall submit to the Commission a duly justified request for payment of the financial contribution and of the loan. Cyprus shall ensure that, upon request, the Commission has full access to the underlying relevant data that supports the due justification of the request for payment, both for the assessment of the request for payment in accordance with Article 24(3) of Regulation (EU) 2021/241 and for audit and control purposes.

:   [(1)](#footnoteref2)
     All footnotes set out in the text on measure C2.1I4 are also applicable to this measure.
:   [(2)](#footnoteref3)
     All footnotes set out in the text on measure C2.1I4 are also applicable to this measure.
:   [(3)](#footnoteref4)
     All footnotes set out in the text on measure C2.1I4 are also applicable to this measure.
:   [(4)](#footnoteref5)
     All footnotes set out in the text on measure C2.1I4 are also applicable to this measure.
:   [(5)](#footnoteref6)
     All footnotes set out in the text on measure C2.1I4 are also applicable to this measure.
:   [(6)](#footnoteref7)
     Except projects under this measure in power and/or heat generation, as well as related transmission and distribution infrastructure, using natural gas, that are compliant with the conditions set out in Annex III of the ‘Do no significant harm’ Technical Guidance (2021/C58/01).
:   [(7)](#footnoteref8)
     Where the activity supported achieves projected greenhouse gas emissions that are not significantly lower than the relevant benchmarks an explanation of the reasons why this is not possible should be provided. Benchmarks established for free allocation for activities falling within the scope of the Emissions Trading System, as set out in the Commission Implementing Regulation (EU) 2021/447.
:   [(8)](#footnoteref9)

    This exclusion does not apply to actions under this measure in plants exclusively dedicated to treating non-recyclable hazardous waste, and to existing plants, where the actions under this measure are for the purpose of increasing energy efficiency, capturing exhaust gases for storage or use or recovering materials from incineration ashes, provided such actions under this measure do not result in an increase of the plants’ waste processing capacity or in an extension of the lifetime of the plants; for which evidence is provided at plant level.
:   [(9)](#footnoteref10)
     This exclusion does not apply to actions under this measure in existing mechanical biological treatment plants, where the actions under this measure are for the purpose of increasing energy efficiency or retrofitting to recycling operations of separated waste to compost bio-waste and anaerobic digestion of bio-waste, provided such actions under this measure do not result in an increase of the plants’ waste processing capacity or in an extension of the lifetime of the plants; for which evidence is provided at plant level.
:   [(10)](#footnoteref11)
     These reference values are based on the definition of non-performing loans as used in the “Monitoring Report on Risk Reduction Indicators” (November 2020), available at https://www.consilium.europa.eu/media/ 46978/joint-risk-reduction-monitoring-report-to-eg\_november-2020\_for-publication.pdf
:   [(11)](#footnoteref12)
     All footnotes set out in the text on measure C2.1I4 are also applicable to this measure.
:   [(12)](#footnoteref13)

    Except projects under this measure in power and/or heat generation, as well as related transmission and distribution infrastructure, using natural gas, that are compliant with the conditions set out in Annex III of the ‘Do no significant harm’ Technical Guidance (2021/C58/01).
:   [(13)](#footnoteref14)

    Where the activity supported achieves projected greenhouse gas emissions that are not significantly lower than the relevant benchmarks an explanation of the reasons why this is not possible should be provided. Benchmarks established for free allocation for activities falling within the scope of the Emissions Trading System, as set out in the Commission Implementing Regulation (EU) 2021/447.
:   [(14)](#footnoteref15)

    This exclusion does not apply to actions under this measure in plants exclusively dedicated to treating non- recyclable hazardous waste, and to existing plants, where the actions under this measure are for the purpose of increasing energy efficiency, capturing exhaust gases for storage or use or recovering materials from incineration ashes, provided such actions under this measure do not result in an increase of the plants’ waste processing capacity or in an extension of the lifetime of the plants; for which evidence is provided at plant level.
:   [(15)](#footnoteref16)
     This exclusion does not apply to actions under this measure in existing mechanical biological treatment plants, where the actions under this measure are for the purpose of increasing energy efficiency or retrofitting to recycling operations of separated waste to compost bio-waste and anaerobic digestion of bio-waste, provided such actions under this measure do not result in an increase of the plants’ waste processing capacity or in an extension of the lifetime of the plants; for which evidence is provided at plant level.

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