The European Commission has formally confirmed the final deadline for the Recovery and Resilience Facility (RRF), the flagship instrument of NextGenerationEU. Member States must complete all reforms and investments financed through the RRF by 31 August 2026, with final payment requests due no later than 30 September 2026. The European Commission must make all disbursements by 31 December 2026, with no extensions permitted.
With the RRF entering its final phase, the European Union is approaching a pivotal moment. In a new Communication adopted on 4 June 2025, the Commission took stock of the RRF's implementation and provided detailed guidance to ensure its successful closure. While over €315 billion has already been disbursed, more than €335 billion remain available and over 4,300 milestones and targets still need to be fulfilled. The message is clear: accelerated implementation is urgently required. Incomplete or overly complex measures risk losing valuable funding, while streamlined, targeted actions remain eligible for support. The priority now is to consolidate, simplify, and deliver.
Water sector: modest share, strategic stakes
Water supply and waste management represent just 3% of total reforms across national recovery and resilience plans (RRPs). Yet, the sector’s significance is critical, especially in the context of climate adaptation, infrastructure resilience, and digital transformation. The RRF has supported a range of water-related initiatives, including notable investments in drought resilience and digital technologies.
One concrete example highlighted by the Commission is Cyprus, where RRF funds enabled the construction of three water reservoirs, enhancing water security for Nicosia and Larnaca. Built by an Austrian company, the project illustrates the cross-border impact of RRF investments and the economic spillover potential within the Single Market.
In Spain, the water sector is an important part of the country’s digital transformation efforts through the PERTE for the digitalisation of water cycle management, an RRF-backed strategic project aiming to modernise the entire water cycle via digital technologies. The PERTE encompasses various initiatives, including the digitalisation of water management systems, improvement of water use efficiency, and enhancement of environmental objectives. Specific allocations for digitalisation projects are determined through individual funding calls and proposals.
Revising plans, reallocating funds: Brussels sets the course
To support Member States, the Commission's Communication lays out a menu of strategic options to help meet the deadline. These include:
- Removing or scaling down measures that cannot be completed in time;
- Splitting multi-phase projects, with only the executable part funded under RRF and the remainder shifted to national or other EU instruments;
- Reallocating funds to high-performing or more advanced investments;
- Redirecting resources to other EU strategic priorities, such as InvestEU or satellite connectivity programmes.
In this context, the water sector may need to reassess timelines and break down larger infrastructure projects to isolate components that can be finalised by the 2026 cut-off. To be eligible for RRF financing, projects must be fully completed and operational by August 2026.
Member States are also advised to streamline administrative processes and revise RRPs by the end of 2025 to preserve their full financial allocations.
A temporary tool with permanent implications
Launched in 2021 to support pandemic recovery, the RRF has already delivered over €315 billion, supporting more than 2,000 milestones and targets. It remains a cornerstone of the EU’s strategy for structural reform, green growth, and digital transformation. However, its temporary nature—backed by joint EU borrowing—means that no flexibility will be offered beyond 2026.
The Commission has called on the European Parliament and Council to accelerate negotiations on other complementary funding mechanisms, such as the European Defence Industry Programme (EDIP), to expand the available toolkit for Member States in the final phase of the RRF.
