The Cabinet approved on Tuesday the establishment of a national development agency following a proposal tabled by the the Finance Minister. It is expected that the agency will be ready at the end of 2025 or early 2026 to start its activities, with a substantial allocation of funding.

Finance Minister Makis Keravnos told the press after the meeting of the Cabinet that Cyprus is the only country in the EU that does not have such an agency and therefore a study was assigned to a specific firm for recommendation. This study was delivered this month and approved today by the Council of Ministers and as the Minister said the agency’s aim is to strengthen the state's initiatives to improve access to financing for SMEs, start-ups and the self-employed.

Keravnos said that this agency will intervene, where there are gaps, in the financing of enterprises. The study for the establishment of this agency is included in the resilience and recovery plan, and is linked to the milestone of the fourth tranche to be submitted in June 2024.

According to the Minister, in addition to the state, the financial partners include the European Investment Bank and the European Investment Fund and it is estimated that the state will be asked, within the first five years of the agency’s operation, to pay 107 million euros.

He noted that the aim of the agency is not to maximize profits but to serve a greater purpose for the economy of Cyprus, that is to strengthen the competitiveness of SMEs.

Keravnos further said that the proposed financing tools will be granted with the participation of banks and relate to small amounts of borrowing and receiving a counter-guarantee from the EIB. Thus, he emphasised, there will be no impact on the public debt from the agency’s activities.