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A reported agreement between Greece’s ADMIE and French investment fund Meridiam could alter the energy landscape of the Eastern Mediterranean, especially for Cyprus. If confirmed, the deal brings new momentum to the long-anticipated electricity interconnection between Cyprus and Europe via Greece, a project with both business and geopolitical ramifications.
The Agreement
Unofficially, Cypriot authorities claim they learned of the agreement from the press, fueling frustration among some stakeholders.
According to Apostolos Tomaras in this Sunday's Kathimerini, Meridiam is set to acquire 49.9% of the Greek special-purpose company GSI, which oversees the project, for €1.9 billion, leaving ADMIE with a controlling 50.1% share. This arrangement, brokered after extensive discussions and facilitated by a Framework Agreement last September in Nicosia, opens the door for additional investors while potentially sidelining Cyprus from the project’s ownership structure.
The French involvement, bolstered by cable manufacturer Nexans and the well-capitalized Meridiam, aims to address financial and regulatory challenges that have stalled the project for years. Notably, the agreement requires shareholders to finance the project proportionate to their stakes, reducing the necessity of Cypriot participation.
Mixed Reactions in Nicosia
The news has sparked diverse reactions in Cyprus. Some officials view the development as a relief, as it spares Cyprus the financial burden of joining the project while maintaining the potential benefits of lifting the island’s energy isolation. Others, however, see the deal as a loss of leverage, fearing that Cyprus is relinquishing its strategic influence over a project it championed.
Unofficially, Cypriot authorities claim they learned of the agreement from the press, fueling frustration among some stakeholders.
Geopolitical Implications
The agreement strengthens France’s foothold in the region, complementing its defense alliances with Greece, Cyprus, and Egypt. With two French giants—Meridiam and Nexans—on board, the project could deter geopolitical risks, particularly from Turkey, while signaling Europe’s commitment to Mediterranean energy security.
Business Breakthrough
The electricity cable project has long been a source of contention between Greece and Cyprus. Nicosia’s delayed decisions on participation and funding reportedly hindered investor interest and strained relations with Athens. ADMIE sees the Meridiam deal as a turning point, claiming it resolves most outstanding regulatory and financial obstacles.
Cyprus, however, retains the option to join the project later, potentially by purchasing shares from ADMIE or Meridiam. Meanwhile, international investors such as Abu Dhabi’s TAQA and the U.S. Development Finance Corporation (DFC) have expressed interest, signaling growing global attention to the venture.
A Decade-Long Journey
The interconnection project, conceived in 2012, has faced numerous delays despite its designation as a Project of Common Interest (PCI) by the EU. The timeline below highlights key milestones:
Timeline of the EuroAsia Interconnector Project
- 2012: The EuroAsia Interconnector project is launched.
- 2013: The European Union recognizes the project as a "Project of Common Interest" (PCI), marking its importance for Europe.
- 2013: The original plan sets the project's completion by 2019.
- 2019: Cyprus grants the necessary licenses for the project to move forward.
- 2019: The completion date is pushed back to 2025.
- 2021: Cyprus, Greece, and Israel sign an agreement to collaborate on the project.
- 2021: An application is submitted to the EU for funding the Cyprus-Crete section.
- 2021: The Greek grid operator, ADMIE, signs an agreement to handle the technical and operational aspects of the project.
- 2022: The project is officially inaugurated.
- 2022: Cyprus’ Council of Ministers approves €100 million in funding.
- 2023: The European Commission warns about delays in the project.
- 2023: The Cypriot government advises the EuroAsia Interconnector on how to address the delays.
- 2023: The project requests an increase in funding to €1.9 billion due to rising costs, while the EU expresses further concerns.
- 2023: Cable manufacturer Nexans Norway AS requests €1.1 billion to produce the cables.
- 2023: Nexans Norway AS conducts seabed surveys to prepare for cable installation.
- 2023: ADMIE takes over as the official entity responsible for implementing the project.
What’s Next?
While Greece welcomes the Meridiam deal as a green light for construction, Cyprus faces a pivotal decision: whether to embrace a supporting role or push for a more direct stake in the project. Either way, the interconnection promises to redefine the island’s energy landscape, with significant economic and geopolitical consequences.
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