EIB Injects €100 Million into Cyprus for Road Upgrades
Cyprus is gearing up for a major road network transformation, powered by a fresh €100 million injection from the European Investment Bank (EIB). This significant funding marks the second tranche of a comprehensive €200 million loan agreement aimed at modernising the island’s transport infrastructure. With the initial project finance of €100 million disbursed in December 2024, the stage is now fully set for wide-ranging works due to be completed by 2029.
The latest tranche will support a multi-year investment programme spearheaded by Cyprus’s Ministry of Transport, Communications and Works. From rural roads to urban bypasses, the plan spans new bridge and tunnel construction, upgrades to existing highways, and safety improvements that cover lighting, signage, and drainage systems.
EIB Vice-President Kyriacos Kakouris captured the essence of the initiative: “This project will make a real difference in daily life—better mobility, safer roads, and stronger climate defences.” His remarks underline the EIB’s long-standing commitment to not just mobility, but also to resilience and sustainability.
Tackling the Roadblocks
While tourists may be familiar with Cyprus’s charming coastlines and ancient ruins, locals have long been grappling with ageing road infrastructure, especially in remote regions. Inadequate maintenance, poor road design, and fragmented connectivity have contributed to congestion, slower economic activity, and safety hazards.
Finance Minister Makis Keravnos highlighted the importance of EIB’s backing: “This partnership allows us to push ahead with vital projects that enhance safety, improve links between regions, and boost sustainable mobility.” In short, it enables the Cypriot government to go beyond patchwork fixes and commit to future-ready infrastructure.
The programme is particularly timely. With climate change making Mediterranean weather increasingly erratic, Cyprus is investing in adaptive measures such as better drainage and smart traffic systems to future-proof its roads.
Connecting Communities, Empowering Economies
Infrastructure is about more than just tarmac. According to Eleftherios Eleftheriou of the Public Works Department: “We’re rolling out projects that support remote areas, increase road safety, address climate challenges, and promote greener modes of travel.” It’s a multi-layered approach designed to boost both accessibility and equity.
Key project components include:
- Major upgrades to national highways
- New bridges and tunnels to eliminate choke points
- Rural road reconstruction to serve isolated villages
- Urban mobility enhancements such as bike lanes and pedestrian paths
- Climate adaptation features like advanced drainage and stormwater systems
The ultimate goal? To create a seamless road network that links the island’s cities, ports, and hinterlands—and to do it sustainably.
A Legacy of Long-Term Commitment
This is far from the EIB’s first foray into Cypriot infrastructure. Since 1998, the bank has invested over €670 million into the island’s road network. The last major road-specific loan, a €112 million package in 2021, helped fund works in Nicosia, Limassol, Paphos, and the energy-critical Vasilikos region.
The EIB’s approach has always been patient capital—steady, long-term investments that compound benefits over decades. As part of the EU’s broader push for cohesion and climate resilience, these road projects align with objectives in the EU Green Deal and the Recovery and Resilience Facility.
Catalysing Broader Development
Good roads catalyse growth—that’s a given. But in Cyprus, the potential ripple effects are even more profound. Improved transport connectivity is expected to enhance:
- Tourism flows, particularly to inland heritage sites
- Agricultural distribution networks
- Labour mobility, helping address regional disparities in employment
- Access to healthcare and education in underserved areas
In addition, the construction phase is poised to create a range of jobs across engineering, project management, and labour, injecting further vitality into the economy.
EIB’s Role in the EU’s Climate Agenda
The European Investment Bank isn’t just a financier—it’s the EU’s climate bank. More than 50% of its global operations now contribute directly to climate action and environmental sustainability. As part of the EU’s Green Deal, the EIB aims to mobilise over €1 trillion in green investment by 2030.
This road investment in Cyprus ticks multiple boxes: it’s about safety, it’s about accessibility, but most importantly, it’s about building infrastructure that can withstand tomorrow’s climate.
“Infrastructure that doesn’t adapt becomes obsolete,” Kakouris has previously stated, and this ethos drives the bank’s shift towards projects that blend economic utility with environmental foresight.
Paving the Way Forward
With the EIB doubling down on its commitment and the Cypriot government matching stride for stride, the road ahead looks promising. By 2029, residents and visitors alike should benefit from smoother, safer, and greener transport routes across the island.
It’s a transformative moment for Cyprus—a move from patching potholes to building a resilient transport backbone. And as climate resilience becomes non-negotiable in public works, this partnership sets a precedent not just for Cyprus, but for other small EU states facing similar challenges.
