The NextGenerationEU (“NGEU”) represents the largest package of economic stimulus measures launched by the European Union to boost the recovery of the European economies after the Covid-19 outbreak.
The key instrument of this package is the Recovery and Resilience Facility (“RRF”), which involves 750 billion euros –390 billion in grants and 360 billion in loans– aimed at repairing the immediate economic and social damage brought about by the pandemic, by building a greener, more digital and more resilient Europe. In this context, the Czech Republic will receive 7 billion euros in grants and 16 billion euros in loans.
The general framework created by the European institutions has been translated into different national recovery plans, such as the Czech “National recovery plan” (the “Recovery Plan”), which was approved by the European Council in mid-July 2020.
Outline of the Czech Recovery Plan
The Czech Recovery Plan addresses common European challenges by embracing the green and digital transitions, to strengthen economic and social resilience and the cohesion of the Single Market. In particular, the Czech Recovery Plan will foster digitalisation, protect the climate through large-scale energy-efficiency renovations, renewable energy, railway infrastructure and sustainable mobility, and include key reforms in the areas of education, health and business environment.
The Recovery Plan devotes 42% of its total allocation to measures that support climate objectives. The Recovery Plan includes investments in renewable energy (480 million euros), the modernisation of district heating distribution networks, the replacement of coal-fired boilers and improving the energy efficiency of residential and public buildings (1.6 billion euros). The Recovery Plan also includes measures for nature protection and water management (141 million euro) as well as investment in sustainable mobility (1.1 billion euros).
Another 22% of its total allocation is devoted to measures that supports the digital transition. The plan provides for investments in digital infrastructure, the digitalisation of public administration, including the areas of health, justice and the administration of construction permits (450 million euros). It promotes the digitalisation of businesses, digital projects in the cultural and creative sectors, digital innovation hubs and the deployment of very high-capacity networks and 5G networks (650 million euros). The Recovery Plan also includes measures to improve digital skills at all levels, as part of the education system and through dedicated upskilling and reskilling programmes (585 million euros).
This breakdown complies with the European Regulation's minimum requirement that at least 37% should be devoted to environmental protection and 20% to the digital transition.
The Czech Government has approved the Recovery Plan by its Decision no. 467 dated on 17 May 2021, which introduces the necessary regulatory modifications to implement the funds according to the Recovery Plan. The Government also approved Statute, Rules of Procedure and Code of Ethics of the Governing Committee of the National Recovery Plan, National Recovery Plan Committee and Detailed description of the division of activities and responsibilities.
The Recovery Plan was officially sent by the Czech Government to the European Commission for approval on 1 June 2021. The Commission issued a positive evaluation on 19 July 2021. The approval of the EU Council is expected in September 2021. The Council's approval of the Recovery Plan would allow for the disbursement of 910 million euros to the Czech Republic in pre-financing (13% of the total amount allocated to the Czech Republic).
The competent body in the Czech Republic will be the Ministry of Industry and Trade. According to the current version of the Recovery Plan, the funds should be open to all companies. Companies can present projects aimed at meeting the objectives of the Recovery Plan, but only new projects or projects under implementation as of 1 February 2020 will be eligible for funding.
Requests for payment may be submitted by the Czech Republic no more than twice a year. The Czech Republic may send the last request to the European Commission by the end of August 2026 and the last payment must be made by the end of 2026 at the latest.
After the Council’s approval, detailed distribution rules shall be adopted. Further information on the Czech Recovery Plan can be found here.