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Cyprus To Build €17 Million Reservoirs For Irrigation Supply

Addressing Critical Irrigation Needs

The Department of Water Development has embarked on a transformative project in the Vathiagia area, destined to resolve the irrigation challenges faced by hundreds of farmers. With a budget of €17 million, the initiative involves constructing two massive earthen reservoirs with a combined capacity of 3,000,000 cubic meters. These reservoirs will store reclaimed water from the Mia Milia intercommunal treatment facility, ensuring a reliable supply during the winter months.

Modernizing Infrastructure In Tandem

The project is being developed alongside the upgrade of the main sewage pipeline in Mia Milia, replacing infrastructure that has been in place since 1972. Funded by the European Union and implemented by the Nicosia District Administration in coordination with state authorities, the upgrade will allow treated water to be redirected to government-controlled areas, including the Kaimakli Industrial Zone. Daily supply is expected to reach around 21,000 cubic meters by the end of the year.

A Comprehensive €80 Million Infrastructure Plan

The reservoirs form part of a broader €80 million programme that also includes pumping stations, transfer pipelines and expanded irrigation networks across Mesaochia, Dali and Athienou. Current demand is estimated at 4.5 million cubic meters, while the new infrastructure is expected to increase annual supply to more than 10.1 million cubic meters, supporting further agricultural activity.

Benefiting Communities And Enhancing Resource Management

Farmers in Idalio, Potamia and Limbi are expected to benefit directly, while municipalities such as Gerio and Latsia will use reclaimed water for green areas. The water is suitable for most crops, with the exception of leafy vegetables and produce consumed raw.

A Model Of Cross-Community Cooperation

The operational costs of the Mia Milia Treatment Plant are split 70% for the Republic of Cyprus and 30% for the Turkish Cypriot community. This arrangement stands as a concrete example of shared resource management. Correspondingly, 70% of the generated reclaimed water, equating to 21,000 cubic meters daily, will be transported via pipeline to the new reservoirs in Vathiagia.

Environmental Commitment And Renewable Energy Integration

The site previously contained industrial waste reservoirs, which required an environmental assessment. Elevated levels of nickel and zinc were identified in the soil, leading to an on-site remediation process costing €370,000. The treated soil will be reused in construction, while photovoltaic systems are planned to support energy needs and reduce operational costs.

Supporting Biodiversity And Circular Economy Initiatives

Located near the Natura 2000 area “Alykos Potamos – Agios Sozomenos,” the project has been assessed to ensure limited environmental impact. The reservoirs are expected to provide a consistent water source for local bird populations. At the same time, the use of reclaimed water supports broader efforts to reuse wastewater in agriculture.

Ongoing Coordination With Local Stakeholders

Planning has involved consultations with farmers and local authorities to align infrastructure development with local needs. Construction is expected to begin once permits are issued, starting with the eastern reservoir, with a capacity of 1.4 million cubic meters.

Looking Ahead

Upon completion, this project marks a significant step forward for Cyprus. It not only enhances water resource management but also reinforces a collaborative framework for shared natural resources. Cyprus is poised to transform wastewater into a valuable ally in agricultural sustainability and economic growth.

S&P Affirms Cyprus At A- With Positive Outlook

S&P Global Ratings confirmed Cyprus’s sovereign rating at A- with a positive outlook on March 20, 2026, according to the Ministry of Finance. This decision reflects stable economic performance despite ongoing external pressures, including geopolitical tensions in the Middle East.

Steady Economic Growth Amid Geopolitical Pressures

S&P expects economic growth to continue at around 3%, slightly lower than in previous years but still above the pace seen in many European economies. Fiscal surpluses are also expected to continue, supporting overall stability.

Robust Debt Management And Fiscal Discipline

Public debt has declined in recent years, supported by strong fiscal performance and higher service exports. Improvements in the banking sector, including lower non-performing loans and stable credit growth, have also contributed to a stronger economic position.

Impact Of The Middle East Conflict

Conflict in the Middle East remains the main external risk. However, the positive outlook indicates that Cyprus is considered capable of managing potential shocks. Future rating changes will depend on public finances, economic performance and foreign investment flows.

Government Policy And Economic Management

According to the Ministry of Finance, the rating reflects continued fiscal discipline and economic management. Recent performance has been supported by the handling of earlier shocks, including the pandemic and the impact of the war in Ukraine.

Industry And Sectoral Insights

S&P noted that key sectors remain stable, despite potential pressure from tourism and energy costs. In particular, the banking sector continues to show strong profitability, capital levels and liquidity.

Energy Security And Future Prospects

Energy remains a key challenge, with costs among the highest in the EU. Plans to develop LNG infrastructure and explore natural gas resources are expected to support supply in the medium term.  Regional energy projects continue to face geopolitical constraints.

Outlook

S&P expects GDP growth to average around 2.8% between 2026 and 2029, while public debt is projected to decline further. Finance Minister Makis Keravnos said the rating confirms the government’s economic policy and supports Cyprus’s position as a stable European economy.

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