In a confidential report to parliament, the Ministry of Finance said its strategy for medium term management of public debt, estimated at €18.5 billion, should start to decline due to the improved public finances, but that risks will remain even after the conclusion in March 2016 of the economic adjustment programme agreed with the Troika of international lenders.

According to the document, the biggest risk is that 40% of debt, or about €7.5 billion, matures over the next six years.

The aim is for short term debt (up to 12 months) to represent €750 million or 5% of the total, while long term debt (more than a year) to be managed so that maturities in 2015 reach €1.3 billion, between 2016 and 2018 a further €1.75 billion and from 2019 onwards €2.2 billion.

Other risks include the €3 billion in guarantees given by the government to various public entities as well as the adjustment programme itself.

The report also points to risks related to raising €500 million from privatisations within the next two years as included in the programme, due to potential reactions by stakeholders.

The first of the public utilities to be privatised is the Cyprus Ports Authority, with the process expected to get underway by the end of 2015, the same timeframe announced for the selection of an advisor for the privatisation of the telecoms giant Cyta.

In all, the government aims to raise €1.4 billion from privatisations and sale of state-owned assets by the end of 2018.

Source: Financial Mirror