16 November 2023

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 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 750 billion euro on the financial markets. Part of it has been allocated towards Belgium’s Recovery and Resilience plan, which has been revised in 2023 so that the plan receives 5.3 billion euros. 

5.3 billions euros towards the Belgian Recovery and Resilience Plan 

Belgium was one of the first countries that received a pre-financing payment (770 milion euro) under the Recovery and Resilience Facility (RRF) in 2022. This helped to kick-start the implementation of the crucial investment and reform measures outlined in Belgium’s original Recovery and Resilience plan.  

Of the 750 billion euro of European NEXT Generation EU aid, some 4.5 billion euro was earmarked for Belgium. In 2023, Belgium has proposed a new plan, requesting extra unding 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.  

70% of the originally agreed plan budget needed to be disbursed between 2021 and 2022, but circumstances have hindered 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. 

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. 

Funding the Belgian Recovery and Resilience Plan  

The recovery of the economy is an opportunity to accelerate the transition towards a more sustainable, smarter and more inclusive growth, while strengthening the social economic and climate resilience.  

Where the original plan was entirerly funded by grants allocation under the Recovery and Resilience Fund (RRF) (with a total value of 5.9 billion euros). The newly proposed plan will be now funded by both grants and loans: 

  • 264 million euros in RRF loans 
  • 4.5 billion euros in grants 

Aligning with the country’s favorable economic performance in 2020 and 2021.The six obvjectives envisaged by the Belgian NRRP should be completed by 2026

Belgium’s National Recovery and Resilience Plan will be structured around six strategic axes, with each ax containing specific measures and expenditures. Each of these are fitted within one or more of the main pillars the Recovery and Resilience Facility is based upon:   

  1. Green transition 
  2. Digital transformation 
  3. Smart, sustainable, and inclusive growth 
  4. Social and territorial cohesion 
  5. Health, and economic, social and institutional resilience 
  6. Policies for the next generation, children and youth 

Changes in the green transition and the digital transformation 

The Belgian RRP, divided over three-country regions, includes a total of 140 reform or investment projects explaining how it will invest the first financial supports received between 2021and 2023.   

Where the EU expected at least 37% of the funds allocated to climate objectives, Belgium will now dedicate no less than 51% of its budget to these objectives. Key initiatives within the REPowerEU chapter, such as reforming appeal procedures and supporting renewable energy in social housing, contribute significantly to this green transition. 

Despite a downward revision in RRF allocation, Belgium maintains a robust digital agenda in 2023, allocating 27% of funds to the digital transition (20% was required by the EU). 

The remaining reforms focus on strengthening the social and economic resilience in Belgium. 

Which are the main country challenges being tackled?

Belgium’s comprehensive recovery and resilience plan is poised to bring about transformative changes by addressing the nation’s specific challenges through a strategic combination of reforms and targeted investments. With a deadline set by the Regulation on the Recovery and Resilience Facility for completion by August 2026, Belgium is committed to fostering lasting and sustainable growth across various sectors. 

Green transition: nurturing a sustainable future 

  • Renovation and sustainability: Belgium recognizes the urgency of energy-efficient renovations and commits over €1 billion to enhance the energy efficiency of its building stock, with a focus on social housing. 
  • Sustainable mobility: A substantial investment of €1.3 billion is allocated to transform mobility, emphasizing railway infrastructure improvement, green public buses, electric charging stations, urban public transport development, and cycling pathway creation. 
  • Decarbonizing energy: the plan supports the decarbonization of the energy sector by investing €390 million in promoting hydrogen as an energy source, accompanied by reforms to facilitate its integration. 
  • Biodiversity and climate adaptation: A €400 million investment aims at reconnecting ecosystems, enhancing protected natural areas, and implementing structural measures to manage water availability, increasing climate change resilience. 
  • Offshore energy island: Belgium plans to develop an offshore energy hub in the north sea, known as the ‘energy island,’ connecting at least 3.15 GW of future offshore wind energy to the onshore electricity grid. 

Digital transition: navigating the digital landscape 

  • Addressing digital challenges: Belgium confronts digital challenges head-on, addressing the lack of digital skills, bolstering infrastructure readiness, and transforming public services through digitalization. 
  • Investing in education: an investment of €440 million is earmarked for an inclusive and future-proof education system, emphasizing digital and STEM skills, ensuring access to digital tools and technology for all students. 
  • Digital transformation of public services: €585 million is allocated for the digital transformation of public administration, the justice system, and healthcare, with a focus on improving access for citizens and businesses and deploying advanced connectivity infrastructure. 

Economic and Social Resilience: Fostering Inclusive Growth 

  • Education and Skills Acquisition: The plan prioritizes effective and inclusive education systems, aligning skills acquisition with current and future labor market needs, particularly in the context of green and digital transitions. 
  • Efficient Public Spending: Belgium aims to improve the quality and efficiency of public spending through spending reviews, reprioritizing towards growth and environmentally friendly expenditures. 
  • Pension Regime Reform: Anticipating long-term benefits, a reform of the pension regime is expected to enhance the sustainability and adequacy of pensions. 
  • Innovation and Reskilling: Significant investments of €450 million in reskilling and upskilling, and €400 million in research and innovation infrastructure underscore Belgium’s commitment to innovation and human capital development. 

Belgium’s recovery and resilience plan, inclusive of ambitious green, digital, and socio-economic measures, positions the country at the forefront of sustainable development, providing a roadmap for other nations to follow in their pursuit of a resilient and future-ready economy. 

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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