Council of the EU approves third amendment to Slovenia's Recovery and Resilience Plan

EU finance ministers have today endorsed the European Commission's positive assessment of the proposed amendment, issued at the end of May. The Slovenian Government submitted the amendment with the aim of restructuring certain investments and maximising the use of available grant funding.

Following the third amendment, Slovenia's RRP now comprises 84 measures (down from 86), of which 36 are reforms (unchanged) and 48 are investments (down from 50), tied to 200 milestones and targets (down from 203).

Approximately 44% of the RRP's funding is now earmarked for green targets, while 23% supports digital transformation.

The amendment to the RRP shifts some loan-funded investments over to grant-funded investments under the Recovery and Resilience Facility (RRF). Following the third amendment, certain activities will be funded through alternative sources, including EU Cohesion Policy grants, as proposed by the ministries.

Several investments originally intended for grant funding have been redesigned to ensure the most efficient use of available resources. Those that the responsible ministries have deemed to be no longer feasible within the specified time limits or in accordance with the RRP will be scaled down, with the remaining funds being redirected to other RRP investments. Ministries plan to continue implementing viable investments that fall outside the current RRP timeframe through alternative funding sources, including EU Cohesion Policy grants.

Examples of major investment adjustments:

• Investment in the energy-efficient restructuring of district heating systems with the use of renewable energy sources will now receive EUR 2.9 million in grants under the RRF (previously EUR 13.5 million). The remaining funds have been redirected to the investments in strengthening the electricity distribution network (transformer stations and low-voltage grid) and sustainable building renovation;
• Investment in strengthening the electricity distribution network (transformer stations and low-voltage network) is now allocated EUR 40 million in grants (previously EUR 30 million) and EUR 7.43 million in loans (previously EUR 50 million) under the RRF;
• Due to the risk of delays to the implementation of projects under the RRP, the targets and scope of the investment in social and economic resilience to climate-related disasters in the Republic of Slovenia have been revised. This investment will now receive EUR 2.11 million in grants (previously EUR 25 million) under the RRF. The National Large Wildfire Centre in Sežana remains part of the RRP. However, funding for the projects National Centre for Coordinated Response to Climate-Related Disasters in Ig and the Sub-centre for the Training of Modular Flood Response Units in Murska Sobota is now planned from European Cohesion Policy funds;
• For investment in reducing flood risks and reducing the risk related to other climate-related disasters, the RRF now envisages to provide grants totalling EUR 51.46 million (previously EUR 45 million) and loans totalling EUR 170.96 million (previously EUR 220 million). This investment covers 10 flood protection projects (down from 11) and the rehabilitation of six landslide-prone sites (unchanged). Additionally, the project to establish a national water control centre and the comprehensive study of flood risk assessment in the river basins of the Republic of Slovenia have been included;
• Investment in increasing railway infrastructure capacity is now set to receive EUR 216.30 million in grants (previously EUR 191.10 million) and EUR 152.66 million in loans (previously EUR 497.50 million) under the RRF. As part of the investment, three railway stations (rather than the initially planned 4) will undergo the planned upgrades. The upgrading of the Ljubljana railway station area, which was initially planned to be financed through the RRF loan funding, will now partly be implemented within the scope of the RRP, specifically the overpass at Dunajska Street. Other activities will be financed from alternative sources (likely cohesion funds). The RRP now includes the upgrades to sections of the Kranj–Jesenice, Ljubljana–Brezovica, Brezovica–Preserje, Preserje–Brezovica, Bled Jezero–Bohinjska Bistrica, Bohinjska Bela–Nomenj and Prevalje–border railway lines, totalling 68.2 km (previously 95 km);
• Investment in the faster entry of young people into the labour market will be implemented on a smaller scale due to a significant drop in youth unemployment. The plan now includes subsidies for 1,950 placements for young people (previously 4,000), with EUR 13.53 million in grants under the RRF (previously EUR 27.55 million);
• Investment in the comprehensive transformation of green and digital education has undergone both content and financial adjustments. The training programme, which is intended to develop digital and sustainable development competences, will now involve 16,000 education professionals and managers (previously 23,637). A total of 14 new projects will be carried out to develop digital and sustainable development competences, as well as financial literacy, among learners. A proposal will be developed for updated and evaluated subject content for existing pedagogical study programmes. In addition, adult financial literacy programmes will be delivered to 3,320 participants. The grant allocation has been reduced to EUR 28.76 million (previously EUR 42.11 million);
• Due to grants being transferred from other investments, which will now be on a smaller scale due to objective circumstances, investment in the greening of educational infrastructure in Slovenia will now receive EUR 67.93 million in grants (up from EUR 40 million) and EUR 58.10 million in loans (down from EUR 73.37 million) under the RRF. Seven projects will now be financed through grants (previously one), and two through loans (previously eight);
• Investment in the effective treatment of communicable and chronic diseases has been adapted due to time constraints. The RRP now includes the construction of the Ljubljana Infectious Diseases Clinic at the University Medical Centre (UKC) Ljubljana up to the construction phase 3, as well as accompanying works from construction phases 4 and 5 (full completion was originally planned). Additionally, four linear accelerators will be provided for the UKC Maribor. The total funding for this investment remains unchanged at EUR 70 million;
• The energy efficient restructuring of district heating systems with the use of renewable energy sources investment has been removed from the RRP. The total allocation of EUR 20 million has been transferred to the strengthening the electricity distribution network investment, which will now receive EUR 40 million in grants (previously EUR 20 million). This investment will provide 227 km of new or reconstructed distribution network (previously 279 km), as well as 613 km of new low-voltage operational distribution network.

Under the revised Recovery and Resilience Plan (RRP), Slovenia is now eligible to receive a total of EUR 2.23 billion by the end of 2026. These funds will be disbursed in 15 tranches (reduced from the originally planned 16), consisting of 10 grant tranches and 5 loan tranches. To date, Slovenia has received EUR 1.1 billion (49.34%) of the total available funding, including EUR 672.51 million in grants (41.68%) and EUR 426.22 million in loans (69.50%). These disbursements were based on advance payments and three payment requests, covering the first four grant tranches and the first two loan tranches. Following its assessment of Slovenia's payment requests, the EC has disbursed the full amounts, having confirmed that Slovenia had met all 64 milestones and targets associated with these tranches.