The European Commission today welcomed the proposal to amend the Slovenian Recovery and Resilience Plan. The amendment to the plan also needs to be approved by the Council of the European Union. The renewed plan, which now also includes a REPowerEU chapter, will be worth EUR 1.61 billion in EU grants and EUR 1.07 billion in loans. It will cover 34 reforms and 49 investments.
REPowerEU
On 14 July 2023, the Slovenian Government launched a formal dialogue with the European Commission (EC) to amend Slovenia’s Recovery and Resilience Plan (RRP), which is the basis for the use of the European Recovery and Resilience Mechanism (the Mechanism). In the proposed amendment to the plan, the Government addressed the reduction of the available Mechanism grants, the additional European funding to achieve the objectives of the REPowerEU Plan and other objective circumstances (high inflation and supply chain disruptions due to the war in Ukraine). At the end of August, the Government also submitted to the EC a list of possible areas for additional borrowing from the Mechanism for coordination.
Grants
The amendment to the NOO also addresses the revision of the amount of available grants. According to the data published by the EC in June 2022, the maximum grant contribution of the Mechanism for Slovenia is EUR 1.49 billion, instead of EUR 1.78 billion as planned when the plan was first approved in 2021. This is because the original 2021 calculation was based on the autumn 2020 economic forecast, while the latest EC calculations take into account real gross domestic product (GDP) figures. Due to better development in 2020 and 2021, Slovenia is entitled to EUR 286 million less in grants and has had to adjust the planned measures as they can no longer be implemented to the extent originally planned. The Government will seek other financial resources to implement the activities excluded from the NOO framework due to the reduction of available funds, which are important for the country’s recovery.
Loans
At the time of the endorsement of the NOO by the Council of the EU in July 2021, it was foreseen that Slovenia would also benefit from EUR 705 million of loans from the Mechanism.
Following the recent floods, the Government has reconsidered the borrowing from the Mechanism and at the end of August submitted to the EC a list of possible areas for increased lending. The new plan is to use up to EUR 1.07 billion of the loans.
The additional loans, worth EUR 404.5 million, include an increase of two investments of the original plan and the addition of three new investments to increase railway infrastructure capacity. The investments concern the upgrading of railway stations and strategic railway lines, including infrastructure affected by the recent floods. An additional EUR 22.5 million of loans will be used to finance investments in the sustainable renovation of buildings.
A new EUR 45 million grant and EUR 220 million loan will be made available to reduce flood risk and the risk of other climate-related disasters.
With the increase in REPowerEU grants and loans from the Mechanism, Slovenia is further strengthening its efforts towards a green transition. Out of the total funds available under the NOO, 48.9% will be directed towards climate objectives (compared to 42.45% in the original plan).
To date, Slovenia has received EUR 281 million in grants, including EUR 50 million as the first instalment and EUR 231 million in advance payments. Slovenia sent a second payment request to the EC this month, containing the second and third instalments for grants and the first instalment for loans. The gross value of the second payment request will be known in the coming weeks.
