1.Executive summary

In 2022, Slovenia’s economy continued to face headwinds stemming from the war in Ukraine and continued supply disruptions, high energy prices and persistent inflation. To tackle these challenges, Slovenia submitted on 14 July 2023 a modified national Recovery and Resilience Plan (RRP), including a REPowerEU chapter.

The REPowerEU chapter submitted by Slovenia includes one scaled-up reform and four investments, two of which are a scale-up of existing measures. The scaled-up reform is expected to accelerate further the deployment of renewable energy installations by removing regulatory barriers and creating a supportive policy framework. The new investments include (i) decarbonisation of small, medium, and large enterprises, and (ii) strengthening of the electricity distribution network. The two scaled-up investments concern (i) the energy efficient restructuring of district heating systems with renewable energy sources and (ii) the deployment of alternative fuels infrastructure and zero-emission vehicles.

The modified RRP continues to provide an adequate response to a large set of economic, social and environmental challenges faced by Slovenia despite the revisions proposed under Articles 18(2) and 21(1) of the RRF Regulation. Importantly, as no reforms have been removed, the modification of existing measures does not have a significant impact on the coverage of a significant subset of the challenges identified in the relevant country-specific recommendations. The original 16 components, with the added REPowerEU chapter, continue to address the six pillars of the RRF, and the plan continues to contain robust milestones, targets and verification mechanisms, and remains coherent with other policy commitments.

In addition, Slovenia’s investments in the green transition have been further enhanced, in particular in the areas of renewable energy, energy efficiency, and sustainable mobility. In this regard, the objective of the REPowerEU chapter is to reduce the overall dependence on fossil fuels and facilitate the deployment of renewables through an enhanced reform and several investments in industry decarbonisation, zero-emission transport and its interconnectedness, grids, and energy efficiency.

The modifications submitted by Slovenia affect 30 measures on the basis of Article 18(2) of the RRF Regulation and 33 measures on the basis of Article 21(1) of the RRF Regulation. In addition to this, the modified RRP submitted by Slovenia rectifies clerical errors that do not reflect the content of the initial plan submitted by Slovenia in 28 measures.

On 31 August 2023 Slovenia also submitted a request for additional RRF loan support based on Article 14(2) of Regulation (EU) 2021/241. This request introduces one new reform, and affects one investment in component 4 (sustainable transport), as well as one investment in the area of sustainable energy renovation of buildings.

For the modification of its RRP, Slovenia relied on the following legal bases: Article 18(2) to take into account the updated maximum financial contribution published on 30 June 2022, Article 14(2) to request additional repayable support, Article 21(1) to amend the RRP due to objective circumstances, and Article 21c to include additional resources from ETS revenues and from the Brexit Adjustment Reserve (BAR) for its REPowerEU chapter.

Based on the assessment of the submitted modification and the REPowerEU chapter, Slovenia’s modified plan receives an A-rating on all criteria (including the two additional criteria for the REPowerEU chapter), except for costing, where the plan receives a B-rating (unchanged from the assessment of the initial plan).

(1)
Balanced Response

(2)
CSRs

(3)
Growth, jobs…

(4)
DNSH

(5)
Green target

(6)
Digital target

(7)
Lasting impact

(8)
M & T

(9)
Costing

(10)
Control Systems

(11)
Coherence

(12) REPowerEU

(13) Cross-border

A (48.88%)

A (20.01%)

2.Objectives of the modification of the plan

Slovenia’s modified recovery and resilience plan (RRP) includes a new REPowerEU chapter pursuant to Article 21(c) of the RRF Regulation as a response to the current geopolitical and energy challenges of the European Union. The amendment of the RRF Regulation provides for additional support for reforms and investments helping to phase out imports of Russian fossil fuels and providing clean, affordable and secure energy to households and businesses across Europe. The modifications proposed under the plan and the newly integrated REPowerEU chapter are aimed at addressing the relevant country specific recommendations for Slovenia.

Pursuant to Article 18(2) of the RRF Regulation, Slovenia has justified a part of its modifications by the decrease of its maximum financial contribution from EUR 1.8 billion to EUR 1.5 billion. The maximum financial contribution for Slovenia was updated on 30 June 2022 and reflects Slovenia’s comparatively better economic outcome in 2020 and 2021 than initially expected during the COVID crisis. To take this update into account, Slovenia proposed to remove 6 investments from its RRP, while an additional 23 investments are to be downsized. Moreover, pursuant to Article 14(2) of the RRF Regulation, Slovenia requested EUR 427 million in additional loans to support one reform and two investments related to the sustainable renovation of buildings and sustainable transport.

Pursuant to Article 21(1) of the RRF Regulation, Slovenia requested the modification of 32 measures, which are no longer achievable due to objective circumstances. These cover multiple factors such as price increases, high inflation and delays in the supply chain, higher construction prices and disruptions of construction materials. The procurement of some of the initial projects under the Slovenia’s RRP has become more costly than expected and this has led to visible delays in some procurement processes. Furthermore, following the recent floods in Slovenia, the documentation for several projects will need to be accordingly adjusted, which will delay the implementation of some projects beyond 2026, therefore the loan allocation for flood safety investments is being reduced by EUR 60 million. Overall, this has ultimately resulted in adjustments of milestone and target values, modifications of the scope of measures or postponement of the timelines.

The main elements of the amended RRP and REPowerEU chapter are listed below by component:

Component 1 (Renewable energy and energy efficiency)

C1.K1.RC Energy efficiency in the economy: Based on Article 21 of the RRF Regulation, the scope of the reform is amended, due to a better alternative more conducive to reaching the policy objective of the measure. In particular, the amended reform foresees the adoption of an Action Plan on energy efficiency in the economy that provides for the introduction of a digitalised method of reporting data on energy audits by enterprises, as well as for monitoring of potential and achieved energy savings. Consequently, the related M8 is modified, while T9 and T10 are modified and attached to investments that directly contribute to their achievement (i.e. investment C1.K1.IG and a new investment C5.K17.ID under REPowerEU) and operationalise the aforementioned Action Plan.

C1.K1.ID Energy efficient restructuring of district heating systems to renewable energy sources: Based on Article 21 of the RRF Regulation, the targets are adjusted due to price increases.

C1.K1.IE Production of electricity from renewable energy sources: Based on Article 21 of the RRF Regulation, the targets are adjusted due to price increases. The timeline for M15 is prolonged by 1 year due increase in investment costs, requiring a reallocation of funds between the two lots (i.e. hydropower and geothermal sources (lot 1) and solar power for public buildings (lot 2), leading to a delay in the communication of awards. The existing deadline for the end target (T16) would be maintained.

C1.K1.IF Strengthening the electricity distribution network: Based on Article 21 of the RRF Regulation, the targets are adjusted downward due to price increases.

C1.K1.IG Increasing energy efficiency in the economy: Based on Article 18 (2) of the RRF Regulation, the investment is reduced and its focus directed to the operationalisation of the Action Plan (M8) under reform C1.K1.RC.

Component 2 (Sustainable renovation of buildings)

C1.K2.RA Reform of the planning and financing of the energy renovation of buildings in the public sector: Related to the removal of T28 and due to Article 18(2), Slovenia is modifying the reform C1.K2.RA and the related M20 on the establishment of a revolving fund for the energy renovation of buildings in the public sector, the proposed alternative reform entails the development of an action plan for the energy renovation of public buildings.

C1.K2.IB Sustainable renovation of buildings: Based on Article 18(2), due to downwards update of the maximum financial contribution, and based on Article 21(1), due to increased inflation and increased renovation works cost, Slovenia is decreasing the allocation and consequently the values of T24 and T25 for the investments in renovation of publicly owned buildings of high administrative and social importance, as well as the allocation and T27 for renovation of publicly owned residential buildings. Furthermore, based on the Article 21(1), due to increased inflation and increased renovation works cost, Slovenia is decreasing T26 for individual upgrades of technical building systems. Furthermore, based on Article 18(2) Slovenia is also removing the investment and T28 in sustainable renovation of public buildings financed under the revolving fund. Based on Article 14(2), Slovenia is increasing the financing for the investments in sustainable renovations of buildings of high administrative and social importance, and energy and sustainable renovation of buildings through individual upgrades of technical building systems.

Component 3 (Clean and safe environment)

C1.K3.RD (Increasing the efficiency of the functioning of public services for environmental protection): In line with Article 21(1) of the RRF Regulation, due to the involvement of numerous stakeholders in the preparation of the reform providing substantial input during the public consultations which delayed the overall process, Slovenia is extending the deadline for the implementation of the milestone from Q4 2022 to Q4 2023.

C1.K3.IF (Reducing flood risks and reducing the risk of other climate-related disasters): In line with Article 18(2), due to a downwards revision of the maximum financial contribution and in line with Article 21(1), due to increases in the prices of materials and construction services and the recent catastrophic floods in Slovenia, the targets are being reduced accordingly. For the same reasons, the timeline for implementation has also been moved from Q4 2022 to Q3 2024 and the scope of the eligible target areas has been expanded.

C1.K3.IG (Centre for seed, nurseries and forest protection): In line with Article 21(1) of the RRF Regulation, due to the implications of the COVID-19 pandemic and disrupted functioning of competent institutions, as well as due to higher labour and material prices, Slovenia is reducing the surface of the research area and postponing the completion of the Centre from Q4 2024 to Q4 2025.

C1.K3.II (Drinking water supply and saving projects): In line with Article 18(2) of the RRF Regulation, the investment is being reduced. The related targets will remain the same as the projects will be smaller in size.

Component 4 (Sustainable transport)

C1.K4.RA Reform of the organisation of public passenger transport: The revision of the description of M54 in line with Article 21(1) of the RRF Regulation clarifies that the Public Passenger Transport Management Company will propose instead of draft amendments to public passenger legislation and other acts. To duly respect its internal procedures and recruitment procedures, Slovenia proposed that the Public Passenger Transport Management Company (M55) would become operational on Q4 2023, four quarters later than initially planned. After an annulment of the public tender award for new public transport concessions by the National Review Commission, Slovenia postponed the T56 (increasing use of the public passenger transport) by two years to Q2 2025.

C1.K4.ID Digitalisation of rail and road infrastructure: Under Article 18(2) of the RRF Regulation, Slovenia proposes to remove the investment on the Digitalisation of Rail Transport. Consequently, the investment will be limited to the Digitalisation of 70 km of Road Transport. Under Article 18(2) of the RRF Regulation, Slovenia proposes to proportionally reduce target of the investment into upgraded railway lines.

C1.K4.IE Promoting the deployment of alternative fuels infrastructure in transport: Under Article 21 of the RRF Regulation and due to the increased price of inputs for the purchase and installation of recharging stations during the period of implementation of the RRP. Slovenia is proportionally reducing the number of the operational recharging points for electric vehicles owned by public administration and for points accessible to the public for electric vehicles from targets 65 and 66. Under Article 21 and to reflect the latest legislative changes at the European level, Slovenia is revising description of the milestone to align with the definitions set out in the currently applicable EU legislation on alternative fuels infrastructure in force instead of the reference to definitions in the Directive (EU) 2018/2001.

C1.K4.IA Further increasing railway infrastructure capacity: Under Article 14(2) of the RRF Regulation Slovenia proposes an increase of ambition in investment C (Further increasing railway infrastructure capacity with the upgrade of Nova Gorica railway station and the addition of 46 km of upgraded railway lines on two regional railway sections (Bled Jezero- Bohinjska Bistrica and Sveti Daniel-Dravograd-national border). Slovenia has also proposed to increase financing of existing measures – Upgrade of Ljubljana railway station and on the upgrade of Ljubljana-Brezovica-Borovnica railway line.

C1.K4.RF: Reform on further deployment of alternative fuels infrastructure and zero-emission transport: Slovenia is introducing a reform on the further deployment of alternative fuels infrastructure and zero-emission transport under Article 14 (3). The reform aims to facilitate the deployment of alternative fuels infrastructure in the transport sector. The reform is expected to establish an efficient system for strategic planning of alternative fuels (infrastructure, the integration of transport into the electricity system to protect and stabilise the energy network and the financing of investment and other measures to support zero-emission transport.

Component 5 (Circular economy – resource efficiency)

C1.K5.IB: Integrated Strategic project for the Decarbonisation of Slovenia through the Transition to a Circular Economy: Slovenia is lowering the target 73 for the investments regarding the transition to a circular economy. The change is justified under Article 18(2) of the RRF Regulation.

Component 6 (Digital transformation of the economy)

C2.K6.RA Digital transformation of the economy (business and industry): Slovenia is amending the timeline for completion of the measure, as well as its costing. Initially, the deployment of the e-identity for businesses envisaged under this reform was intended to be implemented using a hybrid cloud infrastructure (C2.K6.IC), also financed from the RRP. However, the initial hybrid cloud infrastructure (C2.K6.IC) is to be removed due to the downwards update of the maximum financial contribution for Slovenia. This removal of the hybrid cloud investment justifies the prolongation of the timeline of fulfilment of the reform by identifying an alternative solution to implement it through the existing infrastructure of the State Cloud, which needs to be adapted to allow for the deployment of the e-identity. Moreover, the subsequent costs for the e-identity deployment are now envisaged under this measure. The changes are justified under Article 18(2) of the RRF Regulation.

C2.K6.IB Digital transformation programme for industry/businesses: In accordance with Article 18(2) of the RRF Regulation, Slovenia is reducing the allocation of this investment. Moreover, Slovenia is postponing the implementation timeline for the companies due to bottlenecks in supply chains, and eliminates the reference to start-ups under milestone 80, given the unclear distinction between start-ups and small and medium-sized enterprises and the possible overlap between their legal statuses. These changes are justified under Article 21(1) of the RRF Regulation.

C2.K6.IC Establishment of Hybrid Cloud Infrastructure at the Ministry of Economic Development and Technology: In accordance with Article 18(2) of the RRF Regulation, Slovenia is eliminating this investment from the RRP.

C2.K6.ID - Cross-border and Multi-Country Projects – European Common European Data Infrastructure and Services: Slovenia is shifting the timeline for the implementation of this investment from Q2 2024 to Q2 2026, due to objective circumstances beyond the control of the competent ministry given the delays faced by Slovenian companies due to the complexity and the length of the procedure to set up the multi-country project. The changes are justified under Article 21(1) of the RRF Regulation.

C2.K6.IE – Cross-border and Multi-Country Projects – Low-Use Processors and Semiconductor Chips: In accordance with Article 21(1) of the RRF Regulation, Slovenia is reducing the target given that there only two companies applied to the project, and amends the timeline from Q2 2023 to Q2 2024 due to objective circumstances beyond the control of the competent ministry, as this project is an international one in which Slovenia has no influence on the procedures carried out or the arrangements for establishing a value chain between the individual actors involved in the project.

C2.K6.IF Cross-border and multi-country projects – European Blockchain Service Infrastructure: In accordance with Article 18(2) of the RRF Regulation, Slovenia is eliminating this investment from the RRP.

Component 7 (Public transformation of the public sector and public administration):

C2.K7.RD Establishment of a competence centre – human resources centre and increasing skills of staff in the public administration: Slovenia is shifting the timeline for the entry into force of the Civil Service Act from Q4 2023 to Q2 2024. Slovenia is introducing a comprehensive reform of the public sector through the Civil Service Act and the Human Resources Centre - Competence Centre will have broader competences compared with the initial RRP which requires additional time in order to allow enough time to the dialogue with social partners. The changes are justified under Article 21(1) of the RRF Regulation.

C2.K7.IH Gigabit infrastructure: Slovenia is decreasing the subsequent target attached to this investment from providing gigabit infrastructure for 8500 households to 6838 households. This change is justified under Article 21(1) of the RRF Regulation due to the significant increase in costs of related to purchasing equipment and construction.

C2.K7.IJ Digitalisation of education, science and sport: Under this measure, in accordance with Article 18(2) of the RRF Regulation, Slovenia is reducing T108 from 12 to 11 IT solutions to be developed through this investment (the sports IT solution is removed). Moreover, under Article 21(1) of the RRF Regulation, Slovenia is adjusting T106 from 228 to 204 educational institutions to benefit from optical connections above 1Gbps due to price increases and inflation which could not have been foreseen at the time of planning the RRP. Moreover, Slovenia is amending the timeline of implementation of the investment from Q4/2023 to Q2/2024 due to the impact of the recent floods over the selected operators for implementing the investment.

C2.K7.IM Digitalisation in the field of culture: Slovenia is adjusting the timeline for the implementation of this investment from Q4 2025 to Q2 2026. This change is justified under Article 21(1) of the RRF Regulation, due to delays in the recruitment process of the relevant project jobs given the scarcity of available resources on the labour market.

C2.K7.IN Digitalisation in the field of justice: In accordance with Article 18(2) of the RRF Regulation, Slovenia is reducing T105 from 12 to 11 IT systems to be developed, in order to reflect a lower allocation for this investment.

Component 8 (Research, development and innovation):

C3.K8.IB Co-financing of research innovation projects in support of green transition and digitalisation: In line with Article 18(2) of the RRF Regulation, Slovenia is partially removing of the co-financing of longer-term large R&I collaborative programmes in the field of industrial research and experimental development and of projects to promote entrepreneurial RDI investments.

C3.K8.IC Co-financing of projects to enhance the international mobility of Slovenian researchers and research organisations and to promote the international involvement of Slovenian applicants: In line with Article 21(1) of the RRF Regulation, Slovenia is changing the name of the target to “Number of researchers involved in the mobility and/or reintegration project of Slovenian researchers”. The change constitutes a better alternative since it ensures the equal treatment of RRP-funded researchers and researchers who would be funded from the national budget after the completion of the RRP. Moreover, in accordance with Article 18(2), Slovenia is reducing the investment financing researchers involved in the mobility and/or reintegration project of Slovenian researchers.

C3.K8.ID Co-financing of investment in RDI demonstration and pilot projects: In accordance with Article 18(2) of the RRF Regulation, Slovenia proposed a reduction of the amount to be invested in projects to support businesses in the transition to a circular economy.

C3.K8.IE Establishment of the National Food Institute as a central pillar of the innovation ecosystem in food supply chains: In accordance with Article 18(2) of the RRF Regulation, Slovenia is removing the investment in the establishment of a national food institute.

Component 9 (Raising productivity, a business -friendly environment for investors):

C3.K9.IC Support for decarbonisation, productivity and competitiveness of enterprises: Based on Article 18(2) of the RRF Regulation, Slovenia is reducing the grants for the investment towards decarbonisation, productivity and competitiveness of enterprises. Furthermore, based on Article 21, the targets are being additionally lowered due to the higher-than-expected grants per project. As the grants were awarded based on the projects submitted by the enterprises, it was not known in advance how expensive the projects will be and the average amount from previous similar grants issued from other sources was used. However, based on the calls for proposals already conducted, the average project proved to be more expensive.

C3.K9.ID Delivering innovative economic and business infrastructure ecosystems: Based on Article 18(2) of the RRF Regulation, Slovenia is downscaling the investment and proportionally lowering the targets. The reduction of targets eliminates also the pilot project for the management of the zones. Slovenia has stated that it is looking for options to carry this out with national funds.

Component 10 (Labour market – Measures to reduce the impact of the negative structural trends)

C3.K10.RA: Structural measures to strengthen the resilience of the labour market: Due to the need to respond the unforeseeable energy price increases in 2022, Slovenian authorities focused their attention to the creation of an ad-hoc temporary short-time work scheme. This brought valuable new experience in the field of ad-hoc short-time work schemes. Based on these objective circumstances, and in line with Article 21(1) of the RRF Regulation, Slovenia is postponing by 18 months the establishment of a permanent short-time work scheme for severe economic downturns. This will enable the Slovenian authorities to also consider the recent experience with the energy crisis when setting up the new permanent scheme. Further, also in line with Article 21(1), the wording in the description of the measure will be aligned to the one used for the SURE instrument to make it less ambiguous.

C3.K10.IB: Supporting more flexible ways of organising work: In line with Article 18(2) of the RRF Regulation, Slovenia is removing the investment.

C3.K10.IC: Introducing more flexible ways of working, tailored to the needs of people with disabilities, in sheltered workshops and employment centres: In line with Article 21(1) of the RRF Regulation, Slovenia is postponing the achievement of the target due to the objective circumstances – implementation through the initially foreseen agency was replaced with implementation through the Ministry as, this provided a better alternative for the implementation of the investment, while postponing the timeline from Q2 2024 to Q2 2025. As the Ministry is an RRP implementing body with experienced staff, the implementation and verifications chains are expected to be shortened, are expected to bring accountability to the higher level and ultimately are expected to reduce the number of administrative procedures..

C3.K10.ID: Faster entry of young people into the labour market: In line with Article 21(1) of the RRF Regulation, Slovenia is raising the upper age limit of applicants from 25 to 29 years due to record-low unemployment and labour shortages. This changed methodology is in line with the reinforced Youth Guarantee scheme (Council Recommendation 2020/C 372/01), which also broadened the target group from up to 25 to up to 29. Slovenia is also reducing the intermediate target, while keeping the overall target intact.

C3.K10.IE: Training and education of employees: In line with Article 18(2) of the RRF Regulation, Slovenia is removing the investment.

Component 11 (Sustainable development of Slovenian tourism, including cultural heritage)

C3.K11.RA Strengthening the sustainable development of tourism: In line with Article 21(1) of the RRF Regulation, due to a manifestly better alternative, Slovenia is implementing the reform for upgrading data monitoring in the Slovenian Green Tourism Scheme and it is increasing the number of data sources and data providers compared with the initial planning. This increase in ambition requires an additional year and half to ensure availability of data sources and interoperability between databases.

C3.K11.IB The sustainable development of tourist accommodation offers to raise the added value of tourism: In accordance with Article 18(2) of the RRF Regulation, Slovenia is proposing a reduction in the size of the investment for completed energy renovation projects and newly built projects for increasing the energy efficiency of tourist accommodation. In line with Article 21(1) of the RRF Regulation, due to an increase in construction costs and to structural changes in the tourism market, Slovenia is revising the targets and the reform description, shifting the allocation from renovations of larger types of tourism accommodation projects to the construction of smaller types of tourism accommodation projects as it would be a more conducive way to reach the policy objective of the measure.

C3.K11.ID Sustainable restoration and revitalisation of cultural heritage and public cultural infrastructure: In line with Article 18(2) of the RRF Regulation, Slovenia is proposing the downscaling of the investment for renovation of cultural heritage sites. While the target of 15 completed projects will remain unchanged, the average size per project will be lowered.

Component 12 (Strengthening competences, especially digital and those required by new occupations and the green transition)

C3.K12.IG Strengthening cooperation between the education system and the labour market: In accordance with Article 18(2) of the RRF Regulation, Slovenia is removing one of the investment projects (strengthening cooperation between schools and employers in the field of training students to acquire practical health and social care and early childhood education skills).

C3.K12.IH Greening education infrastructure in Slovenia: In accordance with Article 18(2) of the RRF Regulation, Slovenia is removing specific investment projects for the greening of education infrastructure. It shifts some projects from the non-refundable part to repayable part. It also removes some projects from the repayable part.

Component 13 (Effective Public Institutions)

C3.K13.RB Modern and resilient public sector: In line with Article 21(1) of the RRF Regulation, Slovenia is postponing the entry into force of the law regulating the public wage system from Q2 2023 to Q2 2024. The energy crisis and high inflation in 2022 required a change in the timeline of this reform: first a short-term agreement with trade unions on wage adjustment for public employees was found and only then the dialogue with social partners on this key reform was launched. Thus, additional time is needed to complete the dialogue with social partners and draft the legal amendments for adoption.

Component 14 (Health)

C4.K14.RA Healthcare system reform: In accordance with Article 21(1) of the RRF Regulation, Slovenia requested to amend the measure of establishing an independent body to monitor and control quality in the healthcare system and the entry into force of amendments to the Health Care and Health Insurance Act. The envisaged independent body will instead monitor these specialised institutions which are already carrying out the needed health technology assessments. Furthermore, as the changes necessary for the reform go beyond the Health Care and Health Insurance Act, the respective milestone is being amended.

C4.K14.IC Digital transformation of healthcare: Slovenia is postponing the deadlines for a milestone and a target concerning the award of a contract for a national telemedicine system and the use of a central storage of images by health institutions, respectively, in accordance with objective circumstances from Article 21(1). The achievement of the award of contract for a national telemedicine system is being postponed by a year to Q2 2023 as more time is needed for defining and harmonising its technical specifications in view of the numerous new technical technological solutions, which opened up in the field of remote health since the adoption of the original RRP. This requires the inclusion of a wider range of stakeholders and a larger number of technical specifications. The use of the central storage of images in health institutions would be delayed by a year to Q4 2024 as the code list for radiological procedures cannot be completed by the initial deadline.

C4.K14.ID Optimising accessibility of the health system: In accordance with Article 18(2) of the RRF Regulation, after the downwards revision of the maximum financial contribution, Slovenia is removing the investment for upgraded rehabilitation centre with increased capacity. Around a quarter of the initially planned grant amount will be kept and allocated to the purchase of vehicles for doctors working in emergency centres and of equipment for satellite emergency centres. The target to reduce the average time of arrival of emergency medical assistance remains unchanged.

C4.K14.IE Effective treatment of communicable diseases: After downward revision of the maximum financial contribution, Slovenia requested the removal of the investment for the construction of the Maribor Infective Clinic and consequently for the purchase of its equipment in accordance with Article 18(2) of the RRF Regulation.

Component 15 (Long-term care)

C4.K15.RA Establishing a single system for long-term care: Slovenia is postponing the deadline for implementation of milestones 197 (on the long-term care act) and 198 (on the Implementing acts to the long-term care act) due to objective circumstances (Article 21) and is bringing forward milestone 199 (new contribution to finance the system) and merging it with 197. These changes are needed to make the law more efficient and implementable and constitute a better alternative to the initial plan which envisaged a delayed implementation of the new contribution.

C4.K15.IB Ensuring integrated treatment of persons in need of higher levels of long-term care and more complex nursing services: On the basis of Article 18(2) of the RRF Regulation, this investment is being removed. This removal does not affect the implementation of the corresponding reform (Establishing a single system for long-term care) or any other investment under the same component.

C4.K15.IC Ensuring a safe living environment for dependent persons: On the basis of Article 21(1) of the RRF Regulation, Slovenia is proposing to decrease the target due to increased prices.

Component 17 (REPowerEU chapter)

Under the REPowerEU chapter and based on Article 21c of Regulation (EU) 2021/241, Slovenia has included measures for three new investments, one scaled-up reform, and one scaled-up investment.

New measures:

Strengthening the electricity distribution network (medium-voltage network) (C5.K17.IC)

Slovenia is allocating EUR 20 million for an investment in the upgrade of the medium-voltage network that aims to enable the connection of more renewables to the grid, as well as of heat d pumps and recharging points for electric vehicles. The investment also has a digital aspect, which covers new control systems and sensor technologies that enable interactive and intelligent monitoring, measurement, quality control or management of energy generation, transmission, distribution or consumption within the distribution network. This measure contributes to the objective described in article 21c(3), point (e) of the RRF Regulation.

Energy efficiency and decarbonisation of the economy (C5.K17.ID)

Slovenia is allocating EUR 42 million to support the decarbonisation of small, medium and large enterprises through a range of possible measures, such as introduction of renewables, electrification of production processes, energy and heat storage, and energy efficiency. The implementation of the measure is expected to lead to a reduction in energy demand, including of fossil fuels. This measure contributes to the objective described in article 21c(3), point (b) of the RRF Regulation.

Scaled-up measures:

Reform of the promotion of renewable energy sources in Slovenia (C5.K17.RA)

Slovenia is upscaling Reform A under Component 1 on the accelerated deployment of renewable energy installations by removing regulatory barriers to solar and wind installations related to the accompanying energy use of certain areas, such as roadsides, water surfaces, and rooftops. Furthermore, the upscaled reform is expected to also define the competencies and procedures for overriding public interest. In addition to the entry into force of primary legislation, the upscaled reform includes also the entry into force of a decree on the rules for the siting of photovoltaic installations. This measure contributes to the objective described in article 21c(3), point (b) of the RRF Regulation.

Energy efficient restructuring of district heating systems with the use of renewable sources (C5.K17.IB)

Slovenia is allocating EUR 20 million for the upscale of investment C of Component 1 on the energy efficient restructuring of district heating systems. The investment is expected to increase the share of renewable energy capacity in district heating systems through solutions, such as heat pumps, photovoltaic and geothermal installations. This measure contributes to the objective described in article 21c(3), point (b) of the RRF Regulation.

Promoting the deployment of alternative fuels infrastructure in transport (C5.K17.IE)

Slovenia is allocating EUR 40 million for the upscale of investment E of Component 4 on the deployment of alternative fuels infrastructure in transport and zero-emission mobility through three sub-measures: (i) pilot project for a zero-emission public passenger line with electric or hydrogen-fuelled buses and accompanying recharging infrastructure, (ii) support scheme for purchase of zero-emission vehicles and (iii) deployment of recharging and refuelling infrastructure. This measure contributes to the objective described in article 21c(3), point (e) of the RRF Regulation.

Table 1. Table of new and modified components and associated costs.

Component	Status	Costs (EUR million)
Green transition		1358.95
C1 K1: Renewable energy and energy efficiency	Modified	141.20
C1 K2: Sustainable renovation of buildings	Modified	88.55
C1 K3: A clean and safe environment	Modified	375.80
C1 K4: Sustainable mobility	Modified	708.40
C1 K5: Circular economy – resource efficiency	Modified	45.00
Digital transformation		307.40
C2 K1: Digital transformation of the economy	Modified	50.66
C2 K2: Digital transformation of the public sector and public administration	Modified	256.74
Smart, sustainable, and inclusive growth		611.55
C3 K1: Research, development and innovation	Modified	99.91
C3 K2: Raising productivity, a business-friendly environment for investors	Modified	143.00
C3 K3: Labour market – measures to reduce the impact of negative structural trends	Modified	31.91
C3 K4: Restructuring of Slovenian tourism and investment in infrastructure in the field of tourism and cultural heritage	Modified	111.00
C3 K5: Strengthening competences, in particular digital competences and those required by the professions of the future and the green transition	Modified	225.73
C3 K6: Efficient public institutions	Modified	0.00
Health and welfare		285.79
C4 K1: Health	Modified	166.79
C4 K2: Social security and long-term care	Modified	59.00
C4 K3: Housing	Unchanged	60.00
REPowerEU	New	122.17
Total		2685.86

Other elements not covered by assessment criteria

The description of the administrative setup, gender equality and equal opportunities for all, consultation process, security self-assessment for digital investments and the planned communication strategy as reflected in the previous SWD (2021) 184 final remains valid.

In accordance with Article 18(4)(g) of the RRF Regulation, Slovenia carried out a security self-assessment for investment C (Strengthening the electricity distribution network (medium-voltage network) included in the REPowerEU chapter.

State aid and competition rules fully apply to the measures funded by the Recovery and Resilience Facility. Union funds channelled through the authorities of Member States, like the RRF funds, become State resources and can constitute State aid. When this is the case and State aid is present, these measures must be notified and approved by the Commission before Member States can grant the aid, unless those measures are covered by an existing aid scheme or comply with the applicable conditions of a block exemption regulation, in particular the General Block Exemption Regulation (GBER) declaring certain categories of aid compatible with the internal market in application of Articles 107 and 108 TFEU 1 . When State aid is present and it requires notification, it is the duty of the Member State to notify State aid measures to the Commission before granting them, in compliance with Article 108(3) TFEU. In this respect, the State aid analysis carried out by Slovenia in the recovery and resilience plan cannot be deemed a State aid notification. In as far as Slovenia considers that a specific measure contained in the recovery and resilience plan entails de minimis aid or aid exempted from the notification requirement, it is the responsibility of Slovenia to ensure full compliance with the applicable rules.

3.Summary of the assessment of the plan

3.1Comprehensive and adequately balanced response to the economic and social situation

Slovenia’s modified plan along with the REPowerEU chapter includes a balanced set of reform and investments contributing to the Union’s economic, social and territorial cohesion addressing all six pillars of Article 3 of the Regulation (EU) 2021/241. While the substantial reduction of the allocation of RRF funds to Slovenia and the unexpectedly high inflation since mid-2021 required cutbacks in several investments and the complete exclusion of 12 investments, the modified RRP continues to contribute to all the six pillars referred to in Article 3 of Regulation (EU) 2021/241 as it preserves all reforms, albeit in some cases with an adjusted timeline. On the other hand, the revision of the plan will bring forward a crucial pillar of the long-term care reform. The financing of long-term care, introducing in particular a long-term care insurance, will be integrated in the act establishing long-term care as a social pillar in Slovenia. The new chapter on REPowerEU and measures supported by the additional loans will result in an increase in the contribution to the green transition in both the energy sector and sustainable mobility.

Concerning the green transition, the plan includes measures that aim to unlock the potential of renewable energy sources while ensuring nature protection, to support the energy renovation of buildings, to mitigate climate change risks, to improve water management, to promote sustainable mobility, and to adopt green budgetary planning and foster circular economy. Concerning the digital transformation, targeted measures are expected to contribute to the digitalisation of both the public and the private sector. Those include the further digitalisation of the public sector, measures fostering digital literacy in the education system, the introduction of electronic identification documents for citizens and companies, and some investments in connectivity and digital skills, which aim to reduce the digital divide. The measures that primarily address the pillar of smart, sustainable and inclusive growth include labour market and pension reforms, which aims at contributing to raising the employment rate for older workers and potential GDP growth and address the long-term fiscal sustainability and adequacy of the pension system.

To support social and territorial cohesion the plan includes measures to increase the supply of affordable housing, in particular for young families and marginalised people, measures to bridge the digital divide between rural and urban areas, reforms of the labour market, the healthcare and the long-term care system, as well as investments in lifelong learning. The measures that contribute to the pillar of health, and economic, social and institutional resilience include reforms and investments that aim at strengthening accessibility, effectiveness and financial sustainability of the health and long-term care systems. The plan also includes policies for the next generation such as reforms and investments to improve the quality of education, to equip schools with key infrastructure and competences for the digital and green transition, and to support youth employment.

Table 2: Coverage of the six pillars of the Facility by the new or modified RRP components

	Green transition	Digital transformation	Smart, sustainable & inclusive growth	Social and territorial cohesion	Health, and economic, social and institutional resilience	Policies for the next generation
Green transformation
C1 K1: Renewable energy and energy efficiency	●	○	○
C1 K2: Sustainable renovation of buildings	●		○
C1 K3: A clean and safe environment	●		○	○
C1 K4: Sustainable mobility	●	○	○
C1 K5: Circular economy – resource efficiency	●		○
Digital Transformation
C2 K1: Digital transformation of the economy		●	○
C2 K2: Digital transformation of the public sector and public administration		●	○	○	○
Smart sustainable and inclusive growth
C3 K1: RDI – research, development and innovation	○	○	●
C3 K2: Raising productivity, a business-friendly environment for investors	○	○	●
C3 K3: Labour market – measures to reduce the impact of negative structural trends			●	○	○	○
C3 K4: Restructuring of Slovenian tourism and investment in infrastructure in the field of tourism and cultural heritage	○	○	●	○
C3 K5: Strengthening competences, in particular digital competences and those required by the professions of the future and the green transition	○	○	●	○		●
C3 K6: Efficient public institutions		○	●
Health and welfare
C4 K1: Health		○		○	●	○
C4 K2: Social security and long-term care				○	●	○
C4 K3: Housing				●	○	○
REPowerEU	●	○	○

Key: “●” investments and reforms of the component significantly contribute to the pillar; “○” the component partially contributes to the pillar

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Taking into consideration all reforms and investments envisaged by Slovenia its modified RRP continues to represent, to a large extent, a comprehensive and adequately balanced response to the economic and social situation, thereby contributing appropriately to all six pillars referred to in Article 3 of the RRF Regulation, taking the specific challenges and the financial allocation of Slovenia into account. This would warrant a rating of A under the assessment criterion 2.1 in Annex V to the RRF Regulation.

3.2Link with country-specific recommendations and the European Semester

Overall, the modified RRP provides an adequate response to a large set of economic, social and environmental challenges faced by Slovenia. Measures added through the REPowerEU chapter help maintaining the good coverage of a significant subset of the challenges identified in the relevant country-specific recommendations.

No reforms have been removed and the modification of existing measures does not have a significant impact on the resolution of the relevant challenges identified in the context of the European Semester. The partial removal of certain investments under the Health component, does not present an obstacle to effectively address the long-term fiscal sustainability of the healthcare system (CSR 2022.1.4). Similarly, the removal of an investment under the Long-Term Care component does not affect the implementation of the corresponding reform and therefore does not lower the ambition to address the relevant challenge (CSRs 2019.1.3, 2020.1.2, 2022.1.5). Bringing forward the implementation of a financing system for long-term care is expected to address the fiscal sustainability of long-term care (CSRs 2019.1.3, 2022.1.5) earlier than envisaged in the original RRP. Furthermore, by introducing an additional reform on the further deployment of alternative fuels infrastructure and zero-emission transport, Slovenia addresses relevant challenges in the transport sector (CSRs 2019.3.3, 2020.3.7, 2022.3.5, CSR 2023.3). The new reform aims at establishing an efficient system for strategic planning of alternative fuels infrastructure, the integration of transport into the electricity system to protect and stabilise the energy network and finance investment and other measures to support zero-emission transport.

Slovenia’s REPowerEU chapter includes a scaled-up reform and investments that aim to increase the share of renewables in the energy mix (addressing CSR 2019.3.3, 2020.3.5, 2020.3.7, 2022.3.2, 2022.3.5,CSR 2023.3). A strengthened reform introduces the Act on the deployment of installations for the production of electricity from renewable energy sources allowing installations to be placed in areas where there is untapped potential due to location restrictions and prohibitions. A related investment will finance measures to increase the energy efficiency of district heating systems through the use of new advanced solutions and technologies for renewable energy production. It will also aim at reducing the use of natural gas in the heating sector thereby contributing to the reduction of the overall reliance on fossil fuels (CSR 2022.3.1, CSR 2023.3), as well as increasing energy efficiency in buildings (CSR 2022.3.4, CSR 2023.3). A scaled-up investment will also facilitate the further deployment of alternative fuels infrastructure and zero-emission transport contributing to the reduction of greenhouse gas emissions and sustainable mobility (CSRs 2019.3.3, 2020.3.7, 2022.3.5, CSR 2023.3).

New investments under Slovenia’s REPowerEU chapter focus on the decarbonisation of industry (CSR 2019.3.2) and on strengthening the medium-voltage electricity distribution network, including through digitalisation (CSR 2022.3.3. CSR 2023.3). The latter is achieved by increasing the capacity of the distribution network to enable the integration of a larger share of electricity from renewable energy sources and by digitalising the network, enabling, inter alia, interactive and intelligent monitoring. The former is achieved through the provision of non-repayable financial incentives for energy efficiency and decarbonisation measures, among other actions.

As the size of the plan increased following an additional loan request, all 2022 and 2023 structural recommendations are considered in the overall assessment.

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The nature and extent of the proposed modifications to Slovenia’s recovery and resilience plan do not have a material impact on the previous assessment (rating of A) of the contribution of the plan to addressing all or a significant subset of challenges identified in the country-specific recommendations, or challenges in other relevant documents officially adopted by the Commission under the European Semester, and of the adequacy of its response to the economic and social situation of Slovenia, as reflected in the previous SWD (2021) 184 final.

3.3Growth potential, job creation, economic, institutional and social resilience, European Pillar of Social Rights, mitigating the impact of the crisis, and social territorial cohesion and convergence

The modification includes the analysis of the general economic impact. The analysis provided by the Slovenian authorities is based on the European Commission’s standard QUEST III R&D model. In line with the original plan’s analysis, the expenditure from the plan has been classified into four model groups of measures: infrastructure investment; various forms of aid; RDI; and human capital.

The model-based analysis on the macroeconomic impact included in the modification continues to show clear long-term positive results despite the lower allocation and increased inflation. Model estimates show that Slovenia’s modified RRP would boost economic growth and raise the level of GDP by around 0.7 % in 2026, when the impact would be highest. The positive effects of the RRP would be maintained after the implementation of the measures, as estimates suggest that GDP would be on average higher by around 0.5 % per year in 2027-2040. The analysis presented only takes into account the effects of investment measures in isolation, however, given Slovenia’s significant involvement as a small open economy in international trade flows, it can be expected that other countries’ plans will have significant positive spill-over effects on the Slovenian economy. Furthermore, it can be expected that the proposed reform measures, whose effects are currently not taken into account, will further contribute to strengthening economic growth (especially in the long term). Positive effects on economic growth can also be expected from the implementation of other mechanisms which, in addition to the central Recovery and Resilience Facility, from the Next Generation EU instrument.

***

The nature and extent of the proposed modifications to Slovenia’s recovery and resilience plan do not have a material impact on the previous assessment (rating of A) of the plan’s impact on the growth potential, job creation, and economic, social and institutional resilience of the Member State, on contributing to the implementation of the European Pillar of Social Rights, including through the promotion of policies for children and youth, and on mitigating the economic and social impact of the COVID-19 crisis, thereby enhancing the economic, social and territorial cohesion and convergence within the Union, as reflected in the previous SWD (2021) 184 final.

3.4The principle of ‘do no significant harm’

The modifications of the measures included in the RRP do not have an impact on the assessment of the principle of ‘do no significant harm’ which remains identical.

Slovenia’s REPowerEU chapter and measures supported by the additional loan request includes a systematic assessment of each measure against the principle of ‘do no significant harm’ (DNSH), for each of the six environmental objectives within the meaning of Article 17 of the Taxonomy Regulation. While Slovenia’s assessment stresses the positive impact mainly on climate objectives, it also provides information allowing to assess that measures will comply with the ‘do no significant harm’ principle.

For some measures where calls for projects are necessary to select specific projects, ensuring adherence with the ‘do no significant harm’ principle will require introducing specific safeguards in the milestones associated with each measure, to monitor the implementation of the measures. This is the case for Investment D: Energy efficiency and decarbonisation of the economy (C5.K17.ID), Investment B (Energy efficient restructuring of district heating systems with the use of renewable sources) (C5.K17.IB), and Investment C: Strengthening the electricity distribution network (C5.K17.IC).

Specific safeguards have also been introduced for measures included in the Plan that could potentially lead to investments being made in installations falling within the scope of the EU Emission Trading System (ETS). This is the case for Investment D: Energy efficiency and decarbonisation of the economy (C5.K17.ID). To comply with the ‘do no significant harm’ principle, the selected projects need to ensure that greenhouse gas emissions following the investment are below the relevant benchmark for free allocation relevant to the activity concerned.

In addition, specific safeguards have been included to ensure that biomass solutions under the scaled-up Investment B (Energy efficient restructuring of district heating systems with the use of renewable sources) (C5.K17.IB) exclude the use of biomass in breach of the requirements of Directive (EU) 2018/2001. As concerns Investment C: Strengthening the electricity distribution network (C5.K17.IC), a reference to Article 17 of Regulation (EU) 2020/852 has been made explicitly.

***

The nature and extent of the proposed modifications to Slovenia’s recovery and resilience plan do not have a material impact on the previous assessment (rating of A) that no measure for the implementation of reforms and investment projects included in the plan is expected to do a significant harm to environmental objectives within the meaning of Article 17 of Regulation (EU) No 2020/852 (the principle of ‘do no significant harm’), as reflected in the previous SWD(2021) 184 final.

3.5Green transition

All measures in the REPowerEU chapter, as well as the measures supported by the additional loans, are expected to significantly contribute to the green transition as well as to the achievement of the Union 2030 climate targets and of EU climate neutrality by 2050. Moreover, the measures included in the REPowerEU chapter address three out of the six objectives pursued by the Regulation. Furthermore, all the new measures under the REPowerEU chapter, as well as the measures supported by the additional loans, are expected to have a long-term impact.

Under the REPowerEU chapter, one reform is scaled up to facilitate further the deployment of renewable energy sources in certain areas, such as roadsides, water surfaces, and rooftops, and one new investment is added to restructure the existing district heating systems with new RES technologies. As regards decarbonisation of transport, one investment is scaled-up to accelerate the uptake of zero-emission vehicles and charging/re-fuelling infrastructure, by envisaging a support scheme for passenger cars, public transport, and charging or refuelling points. One investment is added that envisages a support scheme for companies to implement decarbonisation measures that are expected to reduce energy demand or/and demand for fossil fuels. The REPowerEU chapter also address the need for upgrades of the electricity distribution network that is expected to facilitate the integration of more renewable energy installations.

Climate target

On the basis of the assessment guidelines provided for sub-criterion 5b, the measures in the modified RRP (incl. the REPowerEU chapter) supporting climate change objectives account for 48.88% of the plan’s total allocation (i.e. above the 37% required), based on the methodology for climate tracking set out in Annex VI to the RRF Regulation. The most important contributions to this target are the investment in energy and energy efficiency, sustainable renovation of buildings, clean and safe environment, sustainable mobility and circular economy.

Additionally, the proposed measures within the REPowerEU chapter supporting climate change objectives account for 79.29% of the REPowerEU chapter’s total estimated costs (i.e. above the 37% required), based on the methodology for climate tracking set out in Annex VI to the Regulation. The most important contributions to this target are the investment in support scheme for decarbonisation of the economy and deployment of alternative fuels infrastructure and support scheme for zero-emission vehicles.

***

Taking into consideration the assessment of all the measures envisaged, the modified recovery and resilience plan, including its REPowerEU chapter, is expected, to a large extent, to make a significant contribution to the green transition or to address the challenges resulting from it and ensures that at least 37% of its total allocation contributes to the climate target. At least 37% of the total estimated costs of the REPowerEU chapter contribute to the climate target. This would warrant a rating of A under criterion 2.5 of Annex V to the RRF Regulation.

3.6Digital transition

Taking into account the downwards adjustment of the financial contribution, the modification of the plan does not impact its ambition towards the digital transition as well as the initial assessment. The modified RRP continues to significantly contribute to the digital transition of the public administration and businesses, including by developing necessary infrastructure (building up connectivity, cloud and improving cybersecurity), deploying advanced and user-friendly digital solutions and services, as well as transforming business processes and closing the digital gap for more traditional companies.

The measures withdrawn or reduced do not impact the overall ambition of the plan regarding the digital transition. The main impact of the revision concerns measures from components 6 and 7 with a decrease in the contribution to the digital target of EUR 19,76 million. Hence, the contribution to the digital transition of the modified RRP (excluding the REPowerEU chapter) stands at 20.01% (EUR 512 million) of Slovenia’s revised maximum contribution of EUR 2,56 billion, which is above the required target of 20% set out in the RRF Regulation.

One of the measures included in the REPowerEU chapter contributes to the digital transition. Investment C – Strengthening the electricity distribution network - includes the deployment of new control systems and sensor technologies that enable the interactive and intelligent monitoring, measurement, quality control or management of energy generation, transmission, distribution or consumption within the distribution network. Moreover, indirect contributions to the digital transition are also present in the REPowerEU chapter, in particular in the case of investments in alternative fuels infrastructure in transport, equipped with appropriate back-end communication hardware and software to record static and dynamic data on the installed recharging/refuelling infrastructure or in the charging infrastructure for electric vehicle charging, integrated into either the electricity distribution or transmission network. Taking into consideration the assessment of all the measures envisaged, the modified RRP is expected, to a large extent, to make a significant contribution to the digital transition and ensures that at least 20% of its total allocation (excluding the measures in the REPowerEU chapter) contribute to support digital objectives. This would warrant a rating of A under criterion 2.6 of Annex V to the RRF Regulation.

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3.7Lasting impact of the plan

The modified RRP maintains the ambition of the initial plan as a whole. The measures included in the plan continue to address the challenges identified. Investments and reforms included in the plan are complementary and can be expected to continue to have a lasting impact. The modification takes into account the reduced financial contribution, higher inflation other factors, such as bottlenecks in supply chains and labour markets that have caused delays. Furthermore, it takes into account the additional loan support for the sustainable renovation of buildings and sustainable transport.

The REPowerEU chapter is also expected to have lasting positive effects on the Slovenian economy. In particular, the REPowerEU measures are expected to contribute to the green transition by supporting Slovenia’s decarbonisation effort through the implementation of the scaled-up reform facilitating the further deployment of renewables energy installations. The implementation of the reform goes hand-in-hand with investments in (i) decarbonisation of industry, (ii) deployment of zero-emission vehicles and its associated infrastructure, (iii) energy efficient district heating systems, and (iv) strengthening the electricity grid. The measures under REPowerEU are expected to have a lasting impact on the reduction of greenhouse gas emissions.

The implementation of the reforms envisaged in the modified recovery and resilience plan is expected to continue to bring about structural changes to the public administration, improving its effectiveness and efficiency. All the reforms are preserved, with some delays in few cases due to unforeseen objective circumstances.

The Commission has already issued positive assessment on a number of reforms that contributed to the high rating under this assessment criteria. Namely, governance of the digital transformation of the administration has been strengthened by establishing the State Administration Informatics Development Council and making it operational, the entry into force of the law on the forms of alternative investment funds, the Debureaucratisation act has entered into force, new public procurement act has simplified the procedures to enable supplementation and clarification of bids when selecting tenderers, and the national monitoring model for quality indicators for long-term care has entered into force.

***

The nature and extent of the proposed modifications to Slovenia’s recovery and resilience plan do not have a material impact on the previous assessment (rating of A) of the lasting impact of the measures proposed by Slovenia, as reflected in the previous SWD (2021) 184 final.

3.8Milestones, targets, monitoring and implementation

The milestones and targets of Slovenia’s modified recovery and resilience plan are the basis for an adequate monitoring of the plan’s implementation. The original plan consists of 86 measures (34 reforms and 52 investments) under 16 components with relevant and well-defined milestones and targets. In the modified plan, the number of measures is reducing to 85 measures (34 reforms and 51 investments) despite the additional measures under the REPowerEU chapter and additional loan request. The overall number of milestones and targets remains balanced and manageable. The reform and investments introduced under the new REPowerEU chapter includes at least one target and/or milestone that contains the key elements of the measure and allows for the assessment of the achievement of its objectives. This new chapter includes a set of 11 new milestones and targets (one reform will be monitored by 2 milestones, four investments by 4 milestones and 5 targets). These milestones are clear and realistic as they reflect decisive steps towards the complete implementation of each reform. The additional loan request is reflected in 3 additional targets and 2 new milestones, while 2 existing milestones have been modified.

Slovenia’s modified plan maintains the original level of ambition. The relevant verification mechanisms, data collection systems and responsibilities can also be qualified as clear, robust and effective to ensure effective completion of milestones and targets. The assessment of the adequacy of the RRP’s implementation structure, arrangements for the monitoring of progress and reporting, and the overall organisational arrangements remains unchanged.

***

The arrangements proposed by Slovenia in its modified recovery and resilience plan are expected to be adequate to ensure effective monitoring and implementation of the recovery and resilience plan, including the envisaged timetable, milestones and targets, and the related indicators. This would warrant a rating of A under the assessment criterion 2.8 of Annex V to the RRF Regulation.

3.9Costing

Slovenia has provided detailed analysis and justification for all the new measures that entail financial cost in the recovery and resilience plan in the REPowerEU chapter including where costs have been revised upwards. Slovenia has provided individual justifications for all the measures whose modifications entailed a change in the cost estimates or related target, including on the proportionality of the relevant amendments. Slovenia has also provided cost estimates for the additional loans requested.

The cost information provided by Slovenia is generally detailed and well substantiated. Slovenia provided detailed estimates and assumptions on costs using the standard template table, which was intended to summarise the key information and evidence on costing. Moreover, Slovenia submitted separate documents including more elaborate descriptions of the methodology underlying the cost calculations. Lastly, Slovenia submitted dedicated documents outlining the key drivers and changes in the costs of the amended measures and their proportionality, mainly relying on the analysis of price indexes published by the national statistical authority.

The assessment of the cost estimates and inherent supporting documents shows that the majority of the costs of the new measures are well justified, reasonable, plausible and do not include costs covered by existing or planned EU financing and are commensurate to the expected economic and social impact of the envisaged measures. Moreover, the changes in the costs estimates of the amended measures are justified and proportional.

Reasonable costs

Overall, the assumptions used by Slovenia to estimate the costs of the new measures in the REPowerEU chapter and the measures covered by the additional loans, are based on a reasonable analysis of the key cost drivers of the measures. The calculations and methodology are generally clearly described even if for a limited number of measures the information provided is more limited or less clear.

The new measures included in the Slovenia’s recovery and resilience plan in the REPowerEU chapter and the measures covered by the additional loans, comply with the eligibility criteria set out in the RRF Regulation. All costs are incurred for reforms and investments after February 2020 and after February 2022 for the measures in the REPowerEU chapter and those covered by the additional loans. Value-added tax (VAT) is not included in any of the cost estimates. Some of the new measures include temporary recurrent costs linked to additional staff, which are acceptable, since relevant justifications are provided showing that these costs are temporary and in line with the objective of the measures.

The justifications of the costs of amended measures appear reasonable, justified and proportional and in line with the initial assessment of these measures, as the changes in the cost estimates for all of them are duly justified and proportional. In the case of measures being amended under Article 21(1) of Regulation (EU) 2021/241 for cost-related reasons, sufficient information has been provided to justify the objective circumstances and the proportionality of the changes in the cost estimates or related target. In this context, the reasonability of the cost estimates, taking into account the new measures, including those in the REPowerEU chapter, and the amended measures, has been established to a medium extent.

Plausible costs

The estimated costs of new measures in the REPowerEU chapter and the measures covered by the additional loans are in line with the nature and type of the envisaged reforms and investments. For most of these measures, Slovenia provided supporting documents and links to online sources to substantiate the cost estimates, including explanations of how past projects relate to the cost estimates of the new measures. In a limited number of instances, the comparability of past projects to ones proposed in the plan could not fully be established, partially due to the novelty of the measure, including potential innovative technologies.

The plausibility of the costs of the amended measures has not changed from the initial assessment of these measures, as the changes in the cost estimates for all of them are duly justified and proportional. Sufficient information has been provided to justify the objective circumstances and the proportionality of the changes in the cost estimates or related target.

Considering the limitations of an ex-ante assessment of cost estimates, the amounts proposed for financing were deemed appropriate and seen as establishing the plausibility of the cost estimates to a medium extent.

No double Union financing

Slovenia has indicated for each individual new measure, including those in the REPowerEU chapter, that the costs to be financed by the RRF will not be funded at the same time by other Union funding sources. Furthermore, the set-up to prevent, detect and correct double funding has not been altered by the modification of the plan.

As concerns REPowerEU, Investment C (Strengthening the electricity distribution network (medium-voltage network)) has potential complementarity with an ongoing Connecting Europe Facility project (GreenSwitch). For avoidance of potential double-funding, Slovenia plans to require (i) applicants to make a binding declaration upon submission of their application and (ii) selected beneficiaries to sign a contract for co-financing from the RRF with provisions that “no double financing will occur during the implementation of the investment or during the reference period of the investment”. For the purpose of verifying lack of double funding, the responsible authorities will cross-check funding data.

Commensurate and cost-efficient costs

The total cost of the modified Slovenian recovery and resilience plan is commensurate to the expected social and economic impact of the envisaged measures. The plan is expected to effectively address a significant subset of challenges identified in the country-specific recommendations (CSRs). The main objectives of the plan are to foster the twin transition, improve growth potential, job creation and economic, social and institutional resilience, thereby reducing vulnerability to shocks. The plan contributes to strengthening social cohesion and social protection and to the implementation of the European Pillar of Social Rights. The plan enhances the economic, social and territorial cohesion and convergence within the Union. The economic and social impact of the plan in combination with the positive cost assessment, indicates that the cost is in line with the principle of cost-efficiency.

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The justification provided by Slovenia on the amount of the estimated total costs of the modified recovery and resilience plan is to a medium extent reasonable, plausible, in line with the principle of cost-efficiency and is commensurate to the expected national economic and social impact. Slovenia provided sufficient information and evidence that the amount of the estimated cost of the reforms and investments of the modified recovery and resilience plan to be financed under the Facility is not covered by existing or planned Union financing. This would warrant a rating of [B] under the assessment criterion 2.9 of Annex V to the RRF Regulation.

3.10Controls and audit

The internal control system described in Slovenia’s recovery and resilience plan remains in force and applies to all measures, including measures under the REPowerEU chapter and the measures covered by the additional loans.

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The nature and extent of the proposed modifications to Slovenia’s recovery and resilience plan do not have an impact on the previous assessment (Rating of A) of the adequacy of the control and audit arrangements proposed by Slovenia, as reflected in SWD (2021) 184 final.

3.11Coherence

The modified RRP presented by Slovenia is structured around 4 clusters, which contribute to the general and specific objectives of the Recovery and Resilience Facility. The wide range of measures will support the recovery of Slovenia’s economy and strengthen its resilience against future shocks. The plan includes important reforms to close the generational gap and further the green and digital transition, providing for sustainable and inclusive growth. The modification of the Recovery and Resilience Plan includes changes in all four clusters and brings in additional reform and investments with the introduction of the REPowerEU chapter and the additional loans.

Each RRP component includes a consistent package of both reforms and investments, pursuing complementary aims and mutually reinforcing measures. The modification to the RRP do not affect the overall coherence of the plan.

Mutually reinforcing measures

The modification to the RRP does not alter the way the reforms and investments are mutually reinforcing. The main focus of the Slovenian RRP remains unaltered and the green and digital transition remain at its core, whereby the green pillar is reinforced by an additional reform and several investments included in the REPowerEU chapter, which also includes measures that contribute directly or indirectly to the digital transition. The scaled-up and newly introduced measures under REPowerEU, as well as the measures supported by the additional loans, are fully in line with the measures deployed in the initial RRP and will contribute to reinforcing the effects of the initial RRP, while further strengthening the decarbonisation efforts.

Complementarity of measures

The modification to the RRP does not alter the way the four components are complementary to one another and pursue consistent and coherent objectives. The scaled-up and newly introduced measures under the REPowerEU chapter and supported by the additional loans bring in a new complementarity layer on energy and decarbonisation as they complement and reinforce existing measures on sustainable mobility and clean energy. At the level of the modified plan, all four clusters pursue complementary aims with no contradictory aims.

Overall assessment

Taking into consideration the qualitative assessment of all components of Slovenia’s recovery and resilience plan, their individual weight (importance, relevance, financial allocation) and their interactions, the plan contains measures for the implementation of reforms and public investments which, to a high extent, represent coherent actions. This would warrant a rating of A under the assessment criterion 2.11 of Annex V of the RRF Regulation.

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The nature and extent of the proposed modifications to Slovenia’s recovery and resilience plan do not have a material impact on the previous assessment (rating of A) of the coherence of the actions proposed by Slovenia, as reflected in the previous SWD(2021) 184 final.

3.12REPowerEU

The REPowerEU measures contribute to the integration of renewable energy sources in the energy mix and to the decarbonisation of the industry and transport in Slovenia. Therefore, they help reduce the dependency on fossil fuels, contribute to increasing energy security and diversification of Union’s energy supply, and address bottlenecks in electricity distribution (Article 21c (3), points (b) and (e) of the RRF Regulation). The newly presented measures are informed by the analysis carried out under the Technical Support Instrument (TSI) aiming to help Slovenia identify the most suitable reforms and investments to deliver on the REPowerEU objectives.

The scaled-up Reform A on the promotion of renewable energy sources contributes to the accelerated deployment of renewable energy installations for the production of electricity by removing regulatory barriers to the deployment of solar and wind installations related to the accompanying energy use of certain areas, such as roadsides, water surfaces, and rooftops.

The scaled-up Investment B on energy efficient restructuring of district heating systems with the use of renewable sources is expected to result in 23 MW of additional or new renewable energy capacity, therefore reducing reliance on fossil fuels. Both Reform A and Investment B will therefore contribute to the REPowerEU objective of increasing the share and accelerating the deployment of renewable energy. Reform A and Investment B will have a lasting impact as the removed regulatory barriers are not expected to be reintroduced later. Reform A and Investment B are coherent with other efforts of Slovenia. In particular, there are synergies with measures under existing Reform A and Investment B of Component 1.

Investment E on promoting the deployment of alternative fuels infrastructure in transport (scaled-up) will accelerate the development of a market for alternative fuels in transport and increase the uptake of zero-emission vehicles in Slovenia, thereby increasing clean or climate-neutral mobility. Investment E will complement the planned C1.K4.IE Sustainable Mobility Component’s investments with deployment of recharging or refuelling infrastructure (for the recharging of vehicles or hydrogen refuelling) as well as with measures to promote mobility with zero-emission vehicles. Investment E will contribute to the REPowerEU objectives of increasing the uptake of renewables and reducing dependence on fossil fuels. Investment E will have a lasting impact as it will contribute to the decarbonisation and electrification of the transport sector. Investment E is coherent with other efforts of Slovenia. In particular, there are synergies with measures under Component 4, Investment E.

Investment C on strengthening the electricity distribution network (medium-voltage network) aims to upgrade the medium-voltage electricity distribution network and to enable the connection of a higher share of renewable energy installations, as well as heat pumps and recharging points for electric vehicles. The measure will benefit renewable energy producers including consumers that need to connect their facilities and vehicles via charging points to the grid. Investment C will contribute to the REPowerEU objectives of addressing internal electricity transmission distribution bottlenecks and, therefore, accelerating the integration of renewable energy. Investments will have a have a long-lasting impact as increasing shares of electricity from renewable energy require additional capacity in the network. Investment C is coherent with other efforts of the Member State. In particular, there is synergy with measures in Component 1.

Investment D on Energy efficiency and decarbonisation of the economy will support the decarbonisation of small, medium and large enterprises through a range of possible measures, such as introduction of renewables, electrification of production processes, energy and heat storage, and energy efficiency. The investment will contribute to the REPowerEU objectives of increasing measures in energy efficiency, increase of energy storage capacities and reduction of dependence on fossil fuels. Investment D will have a long-lasting impact as it will contribute to energy savings in small, medium and large enterprise through implementation of new technologies in the production process, as well as a range of potential other improvements. Investment D is coherent with other efforts of Slovenia in particular, there is synergy with measures in Component 1.

As part of the preparation of its REPowerEU chapter, Slovenia made a draft version of the chapter public, giving stakeholders the opportunity to provide written comments. The national authorities also organised a public discussion on 4 April 2023 concerning the proposed measures under REPowerEU, which was attended by approximately 30 representatives of various sectors, including from energy, transport, environment, commerce, business, local self-government, and civil society sectors.

***

Taking into consideration the assessment of all the measures envisaged in the REPowerEU chapter, the chapter is expected, to a large extent, to contribute effectively to energy security, the diversification of the Union’s energy supply, an increase in the uptake of renewables and in energy efficiency, an increase of energy storage capacities or the necessary reduction of dependence on fossil fuels before 2030. This would warrant a rating of A under criterion 2.12 of Annex V to the RRF Regulation.

3.13Cross-border or multi-country dimension or effect

All measures included in Slovenia’s REPowerEU chapter have a cross-border or multi-country dimension or effect.

The investments with a multi-country and cross-border dimension support the decarbonisation of industry and the deployment of alternative fuels infrastructure in transport by reducing the dependency on fossil fuels and by reducing energy demand of the industry sector. The investments in the upgrade of the electricity distribution grid and in the energy efficient restructuring of district heating systems through the introduction of renewables also have a cross-border dimension, as they are expected to enable the grid connection of a higher share of renewables and decrease the demand for fossil fuels.

The total costs of these measures account for a total of EUR 122.17 million representing more than 30% of the estimated costs of the REPowerEU chapter.

REPowerEU measure with cross-border or multi-country dimension or effect	Costs (EUR million)	Contribution to the target in % of the REPowerEU chapter estimated costs
Energy efficient restructuring of district heating systems with the use of renewable sources	20	16.4%
Strengthening the electricity distribution network (medium-voltage network)	42.17	34.5%
Energy efficiency and decarbonisation of the economy	20	16.4%
Promoting the deployment of alternative fuels infrastructure in transport	40	32.7%
Total	122.17	100%

***

Taking into consideration the assessment of all the measures envisaged in the REPowerEU chapter, the measures in the chapter are expected, to a large/moderate extent, to have a cross-border or multi-country dimension or effect. This would warrant a rating of A under criterion 2.13 of Annex V to the RRF Regulation

ANNEX I: Climate tracking and digital tagging

Measure ID	Measure/ Sub-Measure Name	Budget (EUR m)	Climate		Digital
			Int. field	Coeff. %	Int. field	Coeff. %
C1K1.I.D	Energy efficient restructuring of district systems with the use of renewable sources	11,00	034bis	100%
C1K1.I.E	Production of electricity from renewable energy sources	50,00	032	100%
C1K1.I.F	Strengthening the electricity distribution network (transformer stations)	30,00	033	100%	033	40%
C1K1.I.F	Strengthening the electricity distribution network (low-voltage network)	50,00	033	100%	033	40%
C1K1.I.G	Investing in increasing energy efficiency in the economy	0,20	024	40%
C1K2.I.B	Sustainable renovation of buildings (high administrative and social importance buildings)	43,02	026bis	100%
C1K2.I.B	Sustainable renovation of buildings - individual upgrading of technical building systems	10,00	026	40%
C1K2.I.B	Sustainable renovation of buildings (multi-apartment residential buildings)	2,50	026bis	100%
C1K2.I.B	Continuation of sustainable renovation of buildings (high administrative and social importance buildings) (loans)	14,45	026bis	100%
C1K2.I.B	Continuation of sustainable renovation of buildings - individual upgrading of technical building systems (loans)	3,05	026	40%
C1K3.I.E	Social and economic resilience to climate-related disasters in the Republic of Slovenia – SLO SERCID - Construction of new energy efficient buildings	23,42	025ter	40%
C1K3.I.E	Social and economic resilience to climate-related disasters in the Republic of Slovenia – SLO SERCID - Trainings and awareness raising measures: floods	0,34	035	100%
C1K3.I.E	Social and economic resilience to climate-related disasters in the Republic of Slovenia – SLO SERCID - Trainings and awareness raising measures: fires	0,34	036	100%
C1K3.I.E	Social and economic resilience to climate-related disasters in the Republic of Slovenia – SLO SERCID_ICT solution	0,91			011	100%
C1K3.I.F	Climate change adaptation - Reducing flood risks	220,00	035	100%
C1K3.I.G	Centre for Seeds, nurseries and forest protection	5,10	025ter	40%
C1K3.I.H	Urban waste water discharge and treatment projects	34,00	041bis	40%
C1K3.I.I	Drinking water projects	6,70	039bis	40%
C1K3.I.H	Urban wastewater discharge and treatment projects (loans)	20,00	041bis	40%
C1K3.I.I	Drinking water projects (loans)	20,00	039bis	40%
C1K4.I.C	Increasing railway infrastructure capacity_ Upgrading of the railway line Kranj-Jesenice-d.m.	89,13	065	100%
C1K4.I.C	Increasing railway infrastructure capacity_ Digitalisation of the railway line Kranj-Jesenice-d.m.	10,04	070	40%	070	100%
C1K4.I.C	Increasing railway infrastructure capacity - upgrading of Grosuplje and Domžale railway stations	19,66	066	40%
C1K4.I.C	Increasing railway infrastructure capacity - Upgrading of the Ljubljana-Brezovica – Preserje – Borovnica railway line	72,27	064	100%
C1K4.I.D	Digitalisation of rail and road infrastructure - road dedicated in part to GHG emissions reduction	12,05	063bis	40%	063bis	100%
C1K4.I.E	Fostering the deployment of alternative fuels infrastructure in transport	7,75	077	100%
C1K4.I.C	Further increasing railway infrastructure capacity - Upgrading the Ljubljana railway station and Ljubljana-Brezovica – Preserje – Borovnica and Ljubljana-Brezovica – Preserje – Borovnica (loans)	271,9	064	100%
C1K4.I.C	Further increasing railway infrastructure capacity – Upgrading the Nova Gorica railway station, railway section Bled Jezero–Bohinjska Bistrica, railway section Sveti Daniel-Dravograd-national border (loans)	225,6	066	40%
C1K5.I.B	Integrated strategic project for the decarbonisation of Slovenia through the transition to a circular economy_ Contributing to green skills	7,10	01	100%
C1K5.I.B	Integrated strategic project for the decarbonisation of Slovenia through the transition to a circular economy_Support to environmentally-friendly production processes and resource efficiency in SMEs	9,90	047	40%
C1K5.I.C	Increasing environmentally-friendly wood processing to accelerate the transition to a climate-neutral society	28,00	047	40%
C2.K1.RA	Digital transformation of the economy (business and industry) eIdentity	0,35			011	100%
C2K1.I.B	Industrial/business digital transformation agenda_large enterprises	33,80			010bis	100%
C2K1.I.B	Industrial/business digital transformation agenda_SMEs	10,00			010	100%
C2K1.I.D C2K1.I.E	Cross border and multi-country projects - European common data infrastructure and services and Low-Power Processors and Semiconductor Chips	6,50			021quater	100%
C2K2.I.G	Modernising the digital environment of public administration	60,77			011	100%
C2K2.I.H	Gigabit infrastructure	30,00			053	100%
C2K2.I.I	Digitalisation of internal security	23,63			011	100%
C2K2.I.J	Digitalisation of education and science	63,7			055	100%
C2K2.I.K	Green Slovenian location framework	33,50			011	100%
C2K2.I.L	The digital transition in agriculture, food and forestry	24,06			011	100%
C2K2.I.M	Digitalisation in the field of culture	9,90			011	100%
C2K2.I.N	Digitalisation in the field of justice	9,84			011quater	100%
C3K1.I.B	Co-financing of research and innovation projects in support of green transition and digitalisation - focusing on the low carbon economy, resilience and adaptation to climate change	7,50	022	100%
C3K1.I.B	Co-financing of research innovation projects in support of green transition and digitalisation - digital related R & I	7,5			009bis	100%
C3K1.I.B	Co-financing of research innovation projects in support of green transition and digitalisation - focusing on circular economy	36,64	023	40%
C3K1.I.D	Co-financing of investments in RDI demonstration and pilot projects	21,00	023	40%
C3K2.I.C	Providing innovative ecosystems of economic and business infrastructure: SMEs	110,90	047	40%
C3K2.I.C	Providing innovative ecosystems of economic and business infrastructure: large enterprises	17,50	047bis	40%
C3K4.R.A	Enhancing the sustainable development of tourism - upgraded data monitoring in the Slovenian Green Tourism Scheme	1,00			011	100%
C3K4.I.B	The sustainable development of tourist accommodation offer to raise the added value of tourism - energy renovation	9,00	025	40%
C3K4.I.B	The sustainable development of tourist accommodation offer to raise the added value of tourism - new energy efficient buildings	20,00	025ter	40%
C3K5.R.A	Renovating the education system for the green and digital transitions - green skills	1,31	01	100%
C3K5.R.A	Renovating the education system for the green and digital transitions - digital skills	1,31			108	100%
C3K5.R.B	Reform of higher education for a green and resilient transition - green skills	1,01	01	100%
C3K5.R.B	Reform of higher education for a green and resilient transition - digital skills	1,01			108	100%
C3K5.R.C	Modernisation of secondary vocational training and vocational education including apprenticeships - green skills	1,67	01	100%
C3K5.R.C	Modernisation of secondary vocational training and vocational education including apprenticeships - digital skills	1,67			108	100%
C3K5.I.E	The comprehensive transformation (sustainability and resilience) of green and digital education - digital skills	27,87			108	100%
C3K5.I.E	The comprehensive transformation (sustainability and resilience) of green and digital education - green skills	2,44	01	100%
C3K5.I.F	Pilot projects to prepare the ground for higher education reform for a green and resilient transition - green skills	28,49	01	100%
C3K5.I.F	Pilot projects to prepare the ground for higher education reform for a green and resilient transition- digital skills	28,49			108	100%
C3K5.I.H	Greening education infrastructure in Slovenia	24,57	025ter	40%
C3K5.I.H	Greening education infrastructure in Slovenia (loans)	41,80	025ter	40%
C4K1.I.C	Health digital transformation	83,00			095	100%
C5K17.I.B	Energy efficient restructuring of district heating systems with the use of renewable sources – RES except biomass	10,00	034bis0	100%
C5K17.I.B	Energy efficient restructuring of district heating systems with the use of renewable sources – biomass	10,00	030bis	100%
C5K17.I.C	Strengthening the electricity distribution network (medium-voltage network)	20,00	033	100%	-	-
C5K17.I.D	Energy efficiency and decarbonisation of the economy – SMEs	13,00	024	40%
C5K17.I.D	Energy efficiency and decarbonisation of the economy – large enterprises	29,17	024bis	40%
C5K17.I.E	Promoting the deployment of alternative fuels infrastructure in transport	2,00	073	100%
C5K17.I.E	Promoting the deployment of alternative fuels infrastructure in transport – rolling stock	18,00	074	100%
C5K17.I.E	Promoting the deployment of alternative fuels infrastructure in transport – alternative fuels infrastructure	20,00	077	100%