NextGenerationEU: Commission endorses Czechia’s €9.2 billion modified recovery and resilience plan, including a REPowerEU chapter
Today, the Commission has adopted a positive assessment of Czechia’s modified recovery and resilience plan, which includes a REPowerEU chapter. The plan is now worth €9.2 billion (€8.4 in grants and €818 million in loans) and covers 58 reforms and 105 investments.
Czechia has added further investments to its original plan, such as the construction of affordable housing and the strengthening and digitalisation of its electricity distribution systems. Czechia has also scaled up measures which were already included in the original plan, such as boosting the cybersecurity of digital public administration systems, and made changes to a number of other measures.
Czechia’s changes to the original plan are based on the need to factor in:
supply chain disruptions;
the increased costs of construction due to higher costs for raw materials;
the high inflation experienced in 2022 and 2023, which affected the costs of public procurement; and
the upward revision of its maximum RRF grant allocation, from €7.04 billion to €7.67 billion. This upward revision is a result of the June 2022 update to the RRF grants allocation key and reflects Czechia’s comparatively worse economic outcome in 2020 and 2021 than initially projected.
Importantly, Czechia has added a REPowerEU chapter to its plan, including 15 reforms and nine investments to deliver on the REPowerEU Plan’s objectives to make Europe independent of Russian fossil fuels well before 2030, in light of Russia’s invasion of Ukraine. These 24 measures aim at accelerating the Renovation Wave, the European Green Deal’s key initiative to improve energy efficiency by renovating both public and private buildings, and further boosting the transition towards renewable energy by streamlining permitting procedures, strengthening the domestic electricity grid, and facilitating the production of clean energy by leveraging solar and wind power.
To finance the increased ambition of its plan, Czechia has requested to transfer to the plan its share of the Brexit Adjustment Reserve (BAR), in line with the REPowerEU Regulation, amounting to €55 million. These funds, added to Czechia’s RRF and REPowerEU grants allocation (amounting to €7.67 billion and €681 million, respectively) and to its RRF loan request of €818 million, make the approved modified plan worth €9.2 billion.
An additional boost to Czechia’s green transition
The modified plan has a strong focus on the green transition, devoting 42.9% (up from 42.4% in the original plan) of the available funds to measures that support climate objectives.
The reforms and nine investments included in the REPowerEU chapter strongly contribute to the green transition. The reforms will, for example, facilitate the Renovation Wave by: supporting households, businesses and public sector entities that are renovating their buildings by advising how to do so; streamlining and accelerating permitting for renewables; simplifying the linking of renewables to the grids; and providing support to energy communities. The investments will facilitate the modernisation and digitalisation of the electricity grid, develop new photovoltaic energy sources, electrify railways, support the purchase of electric or hydrogen vehicles and cargo e-bikes by private companies, and promote green skills and sustainability in universities. The reforms and investments in the area of energy and transport which have been scaled up in the modified plan will also incentivise the uptake of renewable energy and improve energy efficiency.
The plan maintains support for improving the energy performance of railway station buildings, public buildings, university facilities, pre-school childcare facilities, social services infrastructure, buildings in regenerated brownfields and public lighting. Measures in the transport sector include modernising and digitalising railway infrastructure, purchasing zero-emission trolleybuses and trams in Prague and deploying charging infrastructure for public transport in the city.
Reinforcing Czechia’s digital preparedness and social resilience
Czechia’s revised plan’s digital ambition has increased, thanks to more investments in the cybersecurity of digital public administration systems. The plan now devotes 22.8% (up from the previous 21.4%) of its total allocation to support the country’s digital transition.
The modified plan’s social dimension remains very ambitious, with Czechia putting forward further reforms aimed at strengthening the provision of affordable housing, improving childcare services, and the digitalisation of services to citizens and businesses. The investment in these services concerns facilities all around the country, thereby increasing the plan’s local and regional impact.
Next steps
The Council will now have, as a rule, four weeks to endorse the Commission’s assessment. The Council’s endorsement would allow Czechia to receive €147 million in pre-financing of the REPowerEU funds and to present its second and third payment requests under the RRF. Under the RRF, Czechia has so far received €915 million in pre-financing in September 2021 and €928 million as a first payment in March 2023.
The Commission will authorise further disbursements based on the satisfactory fulfilment of the milestones and targets outlined in Czechia’s recovery and resilience plan, reflecting progress on the implementation of the investments and reforms.
Members of the College said
President of the European Commission Ursula von der Leyen said:
“I’m glad to announce that we have approved Czechia’s revised recovery and resilience plan, including a new REPowerEU chapter. The revised plan brings €2.2 billion in additional funding for Czechia. This includes €736 million under REPowerEU for reforms and investments in a stronger electricity grid, more renewable energy, energy efficiency, clean transport and, very importantly, the skills needed to support Czechia’s industry and succeed in the green transition. The European Commission will continue to support Czechia along the way.”
