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Cyprus has linked its planned €25 million payment for the Great Sea Interconnector (GSI) to the Greek government issuing a NAVTEX before the end of October, Energy Minister Michalis Damianou said on Monday.
Speaking after presenting his ministry’s 2027 budget to the House of Representatives Finance Committee, Damianou said the government intends to honor its financial commitments as work on the electricity connection advances. He stressed, however, that the payment relates to a project making tangible progress, rather than one that remains stalled.
The GSI is designed to connect the electricity grids of Cyprus and Greece, providing Cyprus with an additional source of power and strengthening its energy links with Europe. The project also carries geopolitical significance, although its implementation has faced practical difficulties and regional security risks.
€82 million in costs recognized so far
Damianou told lawmakers that the Cyprus Energy Regulatory Authority (CERA) has so far approved €82 million in expenditure out of the €302 million claimed by the project’s implementing body, Greece’s Independent Power Transmission Operator, known as ADMIE.
The government plans to make the €25 million payment through the state budget. A separate assessment of the project by the European Investment Bank is also in progress.
The minister said the government had made commitments to the project over several years, including seeking European funding. He acknowledged that any increase in the project’s cost would require additional financing, potentially from private investors, investment funds or the European Investment Bank.
Legal questions surrounding the government’s commitments will be addressed by the Legal Service, Damianou said, declining to comment on the legal details.
Consumers will pay once electricity arrives
Damianou said Cypriot households and businesses would begin covering their share of the project’s costs through electricity bills only after the connection is completed and power starts flowing to Cyprus.
The amount allocated to Cypriot consumers is expected to be repaid over 30 years.
“If electricity does not reach Cyprus, we will not pay,” the minister said.
The government has also left open the possibility of taking an equity stake in the project. Damianou said that option would be considered after the relevant study has been completed.
Gas terminal remains part of energy strategy
The government intends to continue with both the GSI and the natural gas terminal at Vasilikos, Damianou told the committee. He said the terminal project was progressing according to its timetable.
Cyprus aims to secure natural gas supplies before 2030, when some generators operated by the Electricity Authority of Cyprus are expected to be retired. Access to gas is intended to lower electricity production costs through cheaper fuel, reduce emissions and encourage greater competition in the energy market.
Damianou also said Cyprus was receiving full updates from Athens on developments concerning the GSI. Greece, France and French interests connected to the project have roles in efforts to protect it, he added.
The government's immediate priority is to link public funding to measurable progress while continuing work on projects intended to improve Cyprus's electricity supply and reduce its dependence on more expensive generation.
