Cyprus fast-tracks inexperienced economic system transition

Throughout the West, the mantra voiced by policymakers is ‘construct again higher’. Covid has taken its toll on all our industries, companies and markets, and efforts to stimulate restoration at the moment are underway. Eco-friendly initiatives are seen as central to a revival of fortunes. And Cyprus is fast-tracking a transition to a inexperienced economic system – not solely to revive the nation to monetary well being within the wake of the pandemic but additionally to embrace essential new funding alternatives to diversify our economic system.

A key milestone alongside the trail in direction of a extra sustainable future was achieved in December when, as a part of our efforts on cleaner vitality era, the European Funding Financial institution (EIB) agreed to supply substantial backing for the development of the €152 million gas-fired Vasilikos energy plant on the south coast, which can contribute to the manufacturing of sufficient electrical energy to permit us to start shutting down crops reliant on oil.

Additionally in 2020, we started work on a €289 million floating LNG storage and regasification unit in Vasilikos Bay, once more considerably financed by the EIB, which is predicted to cut back our carbon footprint by round 30 per cent. In fact, we’re dedicated to renewables however the transition from fossil gas is not going to be achieved in a single day – the main target will probably be on their gradual alternative.

Sustainability is on the coronary heart of our financial plans, with lots of the UN’s Sustainable Growth Targets for 2030 strongly informing technique. There’s a lot that we have to change. Along with decreasing our reliance on fossil fuels for energy era, we should enhance the effectivity of waste and water administration and get extra environmentally-friendly automobiles on our roads.

EU ‘Inexperienced Deal’ key to progress 

A major catalyst for progress on these and different environmental and sustainability initiatives is the European Union’s Restoration and Resilience Facility. Underneath the challenge, Cyprus is bidding for €978 million in direct grants conditional on plenty of reforms – some lengthy overdue – and progress on our Nationwide Restoration Plan. The plan seeks to advance reforms in areas starting from public well being, the labour market to schooling; promote financial diversification; in addition to improve the funding and digital environments.  And critically, reflecting our overarching ambition, it can speed up the transition to a inexperienced economic system, with an emphasis on vitality effectivity, sustainable transport, cleaner vitality and waste and water administration.

We’re assured of introducing the measures required to entry EU restoration funds, in so doing strengthening an already enticing enterprise atmosphere. Cyprus was final yr named the most improved nation within the IMD World Competitiveness Centre Report, whereas Overseas Direct Funding (FDI) reached file ranges on the eve of the pandemic.

Like many developed nations, we took a massive FDI hit final yr, however we anticipate renewed investor curiosity within the months to come back, as we advance our inexperienced agenda. The EU’s restoration funds will help revolutionary new environmental insurance policies, a few of that are already being utilized to established sectors, reminiscent of transport and tourism, and assist to form an rising new space, funding funds.

As a number one maritime nation, with the third-largest service provider fleet in Europe, we consider that we should always play a strategic position in making an attempt to cut back the transport business’s greenhouse fuel emissions.  Cyprus is eager to see ship-owners use cleaner fuels, energy-efficient applied sciences and even take into account the electrification of their vessels. However they must be incentivised. We goal to do that via a collection of inducements.

From this yr, Cyprus-flagged ships, of which there are over a thousand, will obtain as much as a 30 per cent low cost on tonnage tax, predicated on measures they take to cut back their influence on the atmosphere by, for example, slicing general gas consumption and utilizing decrease carbon-emitting fuels.

Greening of tourism 

Tourism has lengthy helped to maintain the Cypriot economic system but we’re acutely acutely aware of our duty to correctly husband our pure sources. Subsequently, we reward lodge compliance with environmental requirements and require them to show sustainable enterprise practices. We additionally encourage vacationers to pay visits to out-of-the-way elements of the island to assist bolster their economies. Self-drive village routes, countryside strolling trails, agrotourism and schemes to help feminine entrepreneurs in rural tourism typify our method.

Marshalling native and worldwide actors, the NGO Cyprus Sustainable Tourism Initiative  has been performing an essential position in progressing such initiatives in addition to environmental conservation insurance policies to guard our seashores and coastal waters. The great work being achieved will hopefully lay the foundations for a stronger, extra resilient tourism sector when guests start returning in numbers in the summertime.

The diversification of Cyprus’s touristic providing away from its conventional ‘solar and sand’ holidays has additionally led to the launch of TourInvest, a one-stop store for personal fairness and household workplaces to help the touchdown of high-value investments into initiatives that align with the federal government’s inexperienced technique, with a mountain spa and a vineyard amongst present initiatives accessible to environmentally acutely aware traders.

Sustainable financing 

In the meantime, demand for, and curiosity in, a lesser-known function of the Cypriot enterprise panorama has gathered tempo in the course of the pandemic. Cyprus has been described as Europe’s new funding fund hotspot.  Based on the Cyprus Securities and Trade Fee (CySEC), on the finish of the second quarter of 2020, the worth of whole belongings beneath administration was 7.97 billion euros, a 5.3 per cent enhance on the primary quarter. Certainly, Cyprus is reported to point out the biggest annual enhance within the worth of belongings beneath administration in recent times.

We recognise that Covid has given impetus to ESG investing, as traders’ sustainability issues develop, notably amongst millennials. But ‘Inexperienced’ funds not solely enchantment to ethically-minded traders, they’re seen as secure havens in these unsure instances. Consistent with our ambition to be a beacon of sustainable financial improvement within the area, Cyprus needs to be within the vanguard of this new funding development, and is giving precedence to ESG funds in addition to growing sustainable finance requirements for all of Cyprus’s banks and monetary companies organisations.

Regulation of this rising sector will probably be key to sustaining investor confidence. Certainly, CySEC is dedicated to fostering each corporations’ compliance with the brand new requirements and their ESG tasks typically – taking motion the place it sees a threat of mislabeling, misrepresentation or miss-selling, with a purpose to defend shoppers. Furthermore, with our rising experience on this space, we’re additionally capable of contribute at international stage to the talk on sustainable finance.

As we emerge from the shadow of the pandemic, we now have a novel alternative to rebuild our economies in a extra sustainable approach. Cyprus is decided to speed up the method as a result of we perceive that the adoption of a inexperienced agenda is important to advancing monetary and improvement objectives. Solely final month, the federal government introduced €90 million value of help for companies to facilitate the transition to the round economic system. Overseas funding directed at key sectors will expedite the method.  However we’re growing and implementing eco-friendly insurance policies to paved the way – turning the local weather and environmental challenges into alternatives.