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12° Nicosia,
09 July, 2025
 

Cyprus considers electricity bill surcharge to fund €25 million energy project payment

Government vows consumers will not bear the cost as EU-backed interconnection project faces delays and scrutiny.

Newsroom

Cyprus is preparing to impose a temporary surcharge on electricity bills to fund a €25 million payment requested by Greece’s Independent Power Transmission Operator (ADMIE) for the Cyprus-Greece electricity interconnection project, energy officials told Parliament on Tuesday.

Cyprus Energy Regulatory Authority (RAEK) President Polyvios Lemonaris said the request has been submitted and is under review by the Ministry of Finance and the Cyprus Transmission System Operator (TSO). He emphasized that no payment will be made unless ADMIE provides documentation justifying the expenses.

Energy Minister George Papanastasiou, speaking during the House Energy Committee meeting, said any surcharge applied to electricity bills would be offset by government subsidies, likely funded through the Emissions Trading Scheme (ETS). “Consumers will not bear the cost,” he said.

The Cyprus-Greece electricity interconnection project, designed to connect Cyprus to the European power grid, is co-funded by the European Union. Despite this support, progress has been slow. ADMIE’s most recent report, dated June 23, shows that 161 kilometers of subsea cable have been laid, while another 120 kilometers remain under construction. Only 40 percent of the seabed survey is complete, with work in international waters still pending.

Although the project has experienced delays, ADMIE maintains the target completion date of January 1, 2030.

Several MPs raised concerns over governance, financing, and transparency. DISY MP Kyriakos Hadjiyiannis said the project is stalled and criticized both the Greek and Cypriot governments for failing to assert control over maritime areas, allowing Turkey to block seabed surveys beyond 6 nautical miles. AKEL MP Kostas Kostas questioned whether Cyprus has finalized terms for its €100 million equity participation. DIPA MP Marinos Mousiouttas called for greater European and international involvement due to geopolitical obstacles.

Minister Papanastasiou acknowledged the project faces technical, financial, and geopolitical risks. He confirmed that Cyprus and Greece signed a memorandum of understanding that includes five annual payments of €25 million, capped at €125 million. However, he added that funds will only be released if ADMIE proves progress and justifies its expenses.

RAEK’s Lemonaris clarified that approving a surcharge does not mean immediate payment. “The surcharge mechanism may be adopted, but ADMIE will not receive funds unless it provides evidence of actual spending,” he said. Greece’s regulator has already scheduled a similar surcharge to begin September 1.

Lawmakers also expressed concern over ADMIE continuing cable production despite outstanding issues. Minister Papanastasiou responded that the cable, purchased at past prices, retains its value and could be sold if the project is halted.

Following the session, Hadjiyiannis said Cyprus is contributing to uncertainty and accused Turkey of undermining Greece’s rights in the Aegean. He criticized both governments for not raising the issue more forcefully with the European Council.

In a later statement, Minister Papanastasiou confirmed the government’s position that consumers will not be charged directly and said the €25 million payment, if validated, would likely be disbursed in early 2026 based on fiscal timelines.

The electricity interconnection is seen as a critical step for Cyprus to end its energy isolation, but key questions remain over funding, implementation, and political will.

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