14 November 2023

Belgium is set to embark on a transformative journey in 2023 with its modified recovery and resilience plan, gaining a positive nod from the EU Commission. This new strategic plan, backed by 5 billion euros in grants and 264 million euros in loans, outlines 40 reforms and 119 investments, with a special focus on the REPowerEU chapter valued at 726 million euros. These funds make the approved plan worth 5.3 billion euros. 

What is Next Generation EU? 

Next Generation EU (NGEU) is a temporary recovery instrument to help repair the immediate economic and social damage brought about by the coronavirus pandemic. 

The Recovery and Resilience Facility (RRF) is the centerpiece of NGEU with loans and grants available to support reforms and investments undertaken by EU countries. 

To access NGEU funds, each Member State is required to develop a National Recovery and Resilience Plan (NRRP), setting out a coherent package of reforms and investment for the period 2021-26. 

Belgium receiving finances from the temporary mechanism  

In order to address the economic crisis resulting from Covid 19 in a fair, equitable and environmentally conscious manner, the European Commission will support efforts at national level, in particular in the most affected countries through the Next Generation EU. The recovery plan will raise funds by temporarily raising the own resources ceiling to 2% of the EU’s gross national income, allowing it to borrow this 750 billion euros on the financial markets.  

Belgium was one of the first countries receiving a pre-financing payment (770 milion euro) under the Recovery and Resilience Facility (RRF) in 2021. This helped to kick-start the implementation of the crucial investment and reform measures outlined in Belgium’s recovery and resilience plan.  

In the modified plan of 2023, Belgium has requested extra funding in grants and loans to cover 40 reforms and 119 investments. Also adding a RePowerEU chapter to include 4 new reforms, 17 new investments, 7 transferred investments from the original plan, and one scaled-up investment. Additionally, Belgium has proposed changes to 63 measures from the original RRP. This is based on: 

  • Circumstances hindering the fullfillment of certain measures as originally planned, including a high inflation experienced in 2022 and supply chain distruptions caused by Russia’s war of aggression against Ukraine; 
  • The request to take up 264 million euros in RRF loans; 
  • The allocation of grants from 5.9 billion euros to 4.5 billion euros, as a result of the June 2022 update to the RRF grants allocation key, which reflects Belgium’s comparatevlily better economic outcome in 2020 and 2021 than initially foreseen. 

RePowerEU chapter: shaping a fossil fuel-independent europe 

Belgium’s REPowerEU chapter stands out with 4 new reforms, 17 investments, and a commitment to achieving energy independence from Russian fossil fuels by 2030. This segment of the plan emphasizes energy efficiency in buildings, industry decarbonization, renewable energy deployment, hydrogen production, and road transport decarbonization. 

Adaptations and modifications for 2023 

The modifications to the original plan are rationalized by various factors, including challenges stemming from high inflation in 2022, supply chain disruptions due to Russia’s war of aggression against Ukraine, and the decision to avail 264 million euros in RRF loans. A noteworthy revision involves reducing Belgium’s maximum RRF grant allocation from 5.9 billion euros to 4.5 billion euros, aligning with the country’s favorable economic performance in 2020 and 2021. 

Financing the modified plan 

To fund the revised plan, Belgium leverages the Brexit Adjustment Reserve, allocating 229 million euros, and secures an additional 264 million euros through loans. Coupled with existing RRF and REPowerEU grants (4.5 billion euros and 282 million euros, respectively), the modified recovery and resilience plan boasts an impressive 5.3 billion euros. 

Green transition dominance 

Belgium’s modified plan underscores a robust commitment to environmental sustainability, allocating 51% of funds to climate-centric measures, surpassing the mandatory 37% target. Key initiatives within the REPowerEU chapter, such as reforming appeal procedures and supporting renewable energy in social housing, contribute significantly to this green transition. 

Digital preparedness and social resilience 

Despite a downward revision in RRF allocation, Belgium maintains a robust digital agenda, allocating 27% of funds to the digital transition. The plan champions cybersecurity, connectivity, public services, education, health, and culture. Social resilience remains a cornerstone, with a continued focus on employability and skill enhancement, addressing unexpected challenges without compromising on ambition. 

Next steps for the Belgian Recovery and Relisience plan 

The ball is now in the Council’s court, with a four-week window to endorse the Commission’s assessment. This endorsement unlocks €102 million in pre-financing for REPowerEU funds. As Belgium moves forward, the Commission will monitor progress, authorizing further disbursements based on the successful fulfilment of outlined milestones and targets, marking a pivotal phase in Belgium’s journey toward recovery and resilience. 

With FI Group as your reliable partner, you can navigate the evolving landscape of R&D funding and fully leverage the available incentive measures. 

Yvette Poumpalova 

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