European Investment Bank survey suggests 51% Cypriot firms have cut investment during COVID-19 pandemic
4 March 2021
EIB Investment Survey unveiled at joint Nicosia Chamber of Commerce and Industry - EIB conference in Nicosia
Finance Minister Petrides outlines priorities for investment in Cyprus
EIB Vice President Pavlova confirms EIB support for economic resiliance and green recovery
Nicosia Chamber of Commerce and Industry of Cyprus and European Investment Bank today presented the main results of the 2020 EIB Investment Survey for Cyprus at the “Investment and Investment Finance in Cyprus” conference in Nicosia.
More than 225 business leaders, economists and public sector partners joined Minister of Finance Constantinos Petrides, Governor of the Central Bank of Cyprus, Constantinos Herodotou and European Investment Bank Vice President, Lilyana Pavlova at the event.
“The EIB has been a key strong partner for Cyprus for more than 40 years and last year the European Investment Bank stepped up support for energy transition and telecom investment in Cyprus. The EIB Group is playing a crucial role and we are ready to provide more targeted financial and technical support for green and smart investment. Today’s discussions show the shared commitment of public and private partners to strengthen green and smart investment in Cyprus and enhance economic resilience to COVID-19. The EIB Investment Survey, outlined today and conducted in Cyprus and across Europe, identifies current investment challenges and priorities for future investment.” said Lilyana Pavlova, European Investment Bank Vice President responsible for Cyprus.
Cyprus through the lens of the EIB Investment Survey
In Cyprus, the survey covered 180 firms. As seen across Europe, investment in Cyprus has been hit by the COVID-19 crisis and outlook remains uncertain. COVID-19 has affected firms’ investment strategies for 2020 with more than half of firms (51%) investing less than planned, above the EU average (45%).
Around three in ten (29%) firms with investment plans for the current financial year, plan to abandon or delay their investments as a result of COVID-19, a share slightly below the EU average (35%). According to the surveyed firms, the pandemic is expected to have a long-term impact on the way they operate, particularly through the increased use of digital technologies in the long-run.
The proportion of firms in Cyprus citing long-term barriers to their investment activities is much higher than the EU average on almost every measure. Energy costs, uncertainty and availability of skills remain the principal barriers to long-term investment cited by firms in Cyprus. Availability of skilled staff is perceived as a barrier by an increasing number of firms, up eight percentage points on EIBIS 2019.
Whilst availability of finance is now perceived much less of a barrier than in EIBIS 2019 but remains well above the EU average.
Cypriot firms lag their EU peers when it comes to investment in digitalization and innovation as around one-third of Cypriot firms (below the EU average), claim to have developed or introduced new products, processes or services as part of their investment activities. Just over half of all firms in Cyprus, below the EU average, have already invested or plan to invest in the next three years in measures to tackle the impact of weather events and reduction in carbon emissions.
Investment in Cyprus compared with EU wide
At the event, EIB’s Head of Economic Studies Pedro de Lima, presented the main results of the 2020 annual EIB Investment Survey (EIBIS) for Cyprus, complemented with the analytical insights of the 2020/21 EIB Investment Report.
Participants discussed the cyclical and structural dynamics behind investment and investment financing in Europe, thereby facilitating an in-depth understanding of the investment situation in each EU economy.
Based on interviews of 12,500 firms across all EU Member States, the EIB Investment Survey provides valuable country-by-country information not available through quantity-based statistics, such as details on investment plans, perceived gaps, the quality of the capital stock, the nature of the investment, financing conditions and the issues impeding investment. The questions relate to firm characteristics and performance, innovation and R&D, digital transformation, past investment activities and future plans, sources of finance, and challenges that businesses face.
The European Investment Bank (EIB) has signed a €2.1 million EU grant with BiH for financing the construction of the wastewater and drinking water systems in the municipalities of Jajce and Zvornik. This investment will help to improve existing and develop new water and sanitation infrastructure that will increase the capacity of water wells and reduce water losses. The aim is to protect public health and the environment from water pollution and ensure reliable water supply and sanitation services for some 93 000 people.
The European Union, through the European Commission, and the Organisation of African, Caribbean and Pacific States (OACPS), has agreed to provide EUR 60 million to the European Investment Bank and African Development Bank’s joint Boost Africa initiative, enabling it to support higher risk investment.
Ministers of State for Foreign Affairs from Germany and Portugal and EIB Vice President Thomas Östros today joined more than 80 business leaders, diplomats from Africa and Europe, financial experts, and development specialists at the Berlin Green Talk to share investment best practice and outline how to accelerate the green transition in the context of EU-Africa relations.