Breaking news

Cyprus Unveils Measures to Protect Water and Boost Agriculture

At the Provincial Agricultural Office of Paphos, Minister of Agriculture, Rural Development and Environment Maria Panagiotou detailed a series of decisive measures approved by the Cabinet. These initiatives seek to overhaul the nation’s water management policies and bolster fire prevention in rural areas, addressing the twin challenges of severe drought and climate-driven extremities.

Holistic Approach to Water Management

Following extensive consultations with local agricultural stakeholders and producers, Minister Panagiotou underscored that the transformation of irrigation practices relies on comprehensive water resource management. In a period marked by one of the worst droughts in Cyprus’s history, the government has charted a new course toward sustainability through substantial investments, technological innovations, and active community engagement.

Advancing Desalination and Infrastructure Investments

A pivotal component of the new water strategy is the shift to relying predominantly on desalinated water. For the first time, the 2026 budget proposals include over €140 million dedicated to the procurement of desalinated water, marking a strategic move away from previous practices that diverted valuable supplies away from irrigation. Key elements of the plan include:

  • The cessation of reserve desalination usage by dedicating desalinated water exclusively for water supply, thereby reserving dam storage for irrigation purposes.
  • Activation of four mobile desalination units at strategic locations—Moni, Limassol Port, Kissonerga, and Garrulis—with a target daily output of 47,000 cubic meters by January 2026.
  • Commissioning three new desalination units in Episkopi, Vasiliko, and Ammochostos to elevate daily production to 77,000 cubic meters and enhance supply capacity by 32%.
  • Establishment of permanent desalination facilities in free Ammochostos and Eastern Limassol, designed to operate on renewable energy sources by 2029.
  • An investment of €200 million in maintenance, network upgrades, and loss reduction projects.
  • Strengthening of the Water Development Department with 54 new recruits since 2023 and the rollout of the “Stagonometro” monitoring initiative in collaboration with KOIOS to track water consumption.
  • A comprehensive review of Cyprus’s water policy and planning through 2050 to recalibrate long-term national targets.

Minister Panagiotou noted that 37% of agricultural water needs are already met by reclaimed water—a historic record for Cyprus—and additional projects in Larnaca, Nicosia, and Aradippou are expected to further raise this percentage.

Wildfire Prevention and Revitalization of Abandoned Agricultural Land

In a parallel effort to mitigate wildfire risks and support rural prosperity, the Cabinet approved a package of measures totaling €5.25 million aimed at activating abandoned farmlands. This initiative is designed not only to reduce wildfire hazards by cutting back on combustible biomass but also to stimulate agricultural activity. The State Support Plan, with a budget of €4.1 million, offers:

  • Up to €1,414 per decare for rehabilitating neglected or abandoned agricultural land.
  • Additional support of up to €60 per decare for sustaining reforested plots with permanent dryland plantations.

Under the LEADER program, which is allocated €1.15 million, further funding will support the acquisition of firefighting and fuel-cleaning equipment by rural communities and the implementation of controlled grazing in areas susceptible to wildfire risks. Minister Panagiotou emphasized that these measures, financed for the first time, are emblematic of the government’s commitment to empowering local communities and protecting Cyprus’s environmental and agricultural heritage.

Long-Term Vision and Call to Action

Highlighting the unprecedented nature of the current drought, Minister Panagiotou stated, “This drought may be the worst our nation has ever experienced. We are not sugar-coating the facts, and our actions reflect our steadfast commitment to resolving these issues.” The Minister stressed that practical and sustained efforts are crucial to eliminating water wastage and ensuring an abundant water supply for all citizens, communities, and producers. The government’s resolute approach, which includes immediate operational enhancements and long-term strategic reforms, is set to deliver concrete, wide-reaching benefits for the nation’s water security and agricultural resilience.

Ensuring a Secure Hydrological Future

The comprehensive reforms, ranging from the reallocation of desalinated water to multi-million euro infrastructural investments and robust fire prevention strategies, aim to secure both the present and future of Cyprus’s water resources and agricultural potential. This decisive policy shift stands as a testament to the government’s leadership, unwavering determination, and pursuit of long-term sustainability in the face of escalating climatic challenges.

Bank of Cyprus Upgrade Signals Fresh Optimism For Greek And Cypriot Banks

Regional Banks Enter A More Favorable Cycle

Bank of Cyprus and Eurobank are well positioned to benefit from a renewed re-rating of Greek and Cypriot bank stocks, according to Cyprus-based investment firm Roemer Capital, which upgraded Bank of Cyprus to a buy rating and reaffirmed its positive view on Eurobank.

The firm cited easing geopolitical tensions, resilient economic growth in Greece and Cyprus, lower funding costs and Greece’s expected transition to developed-market status as the main factors supporting the sector.

Roemer Capital also lowered its cost of equity assumptions, updated its forecasts following first-quarter 2026 results and extended its valuation horizon to the end of 2027, raising target prices across its banking coverage.

Bank Of Cyprus Gets The Largest Upgrade

Bank of Cyprus received the biggest revision, with Roemer Capital upgrading the stock from hold to buy and setting a target price of €11.10, implying potential total upside of 27%.

The firm highlighted the bank’s strong capital generation, profitability and projected 100% dividend payout, describing it as the strongest capital-return story among the banks under coverage. Roemer Capital maintained its buy rating on Eurobank, assigning a target price of €4.90 and forecasting potential upside of 28%. The report said the bank is well placed to benefit from loan growth, improving operating performance and merger-and-acquisition synergies.

National Bank of Greece and Piraeus Bank also retained buy ratings, with expected returns ranging from 25% to 36%. Optima Bank was upgraded to buy, while Alpha Bank remained at hold on valuation grounds.

Why Growth Still Sets The Region Apart

According to Roemer Capital, Greek and Cypriot banks continue to benefit from stronger economic fundamentals than many western European peers. The report pointed to faster economic growth, healthier balance sheets, low levels of non-performing exposures, capital ratios approaching 20% and strong customer deposit bases.

Analysts expect performing loans across the sector to grow at a compound annual rate of 6% to 8% through 2028, supported by private investment, digitalisation, green manufacturing, supply-chain expansion and a gradual recovery in household lending.

The report also said the conclusion of lending under the EU Recovery and Resilience Facility is unlikely to materially affect credit growth, as banks have already shifted back towards traditional commercial lending. Roemer Capital expects Euribor to remain between 2.2% and 2.5%, a level it believes should support both lending activity and net interest margins.

Geopolitics, Valuation And Market Structure Support The Case

The report said improving geopolitical conditions have strengthened the investment outlook, noting that Brent crude prices have largely returned to pre-war levels while Greek government bond yields have stabilised at around 3.5%. Although geopolitical risks remain, Roemer Capital believes the likelihood of a major inflationary shock or significant pressure on bank profitability has eased.

Another important catalyst identified by the firm is Greece’s expected promotion to developed-market status by FTSE Russell, STOXX and MSCI over the coming months.

According to the report, the reclassification should improve liquidity and attract a broader base of international investors. Roemer Capital also said Euronext’s acquisition of the Athens Exchange is expected to strengthen market infrastructure and increase international visibility, particularly for Bank of Cyprus and Optima Bank.

The firm noted that Bank of Cyprus has already benefited from its Athens listing, with average daily trading value increasing from less than €400,000 before its September 2024 move to nearly €6 million afterwards.

Economic Momentum Remains A Core Tailwind

Roemer Capital said both Greece and Cyprus have moved beyond post-crisis recovery and are now supported by private-sector-led growth. For Cyprus, the report highlighted recent tax reform and efforts to simplify the legal and regulatory framework, while also noting that limited foreign banking competition continues to support domestic lenders.

Overall, Roemer Capital expects Greek and Cypriot banks to remain well-positioned for profitable loan growth over the coming years.

The Future Forbes Realty Global Properties
Aretilaw firm
eCredo
Uol

Become a Speaker

Become a Speaker

Become a Partner

Subscribe for our weekly newsletter