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12° Nicosia,
22 July, 2024
 

Loan denial sparks debate over EuroAsia electricity project

Controversy arises as European Investment Bank's decision to withhold loan for EuroAsia electricity initiative raises questions

Newsroom

The European Investment Bank's (EIB) recent refusal to grant a loan for the EuroAsia Interconnector project has ignited a heated debate over the future of the ambitious energy initiative. As the controversy brews, project proponents highlight the project's potential benefits and address concerns raised by the bank's evaluation.

The EIB's assessment, which evaluated the feasibility of funding the EuroAsia electricity project, yielded mixed conclusions. The findings included:

1. Potential savings of around €300 million annually on electricity bills for consumers through linking Cyprus and Greece's power grids.
2. An indication that the economic gains from the project might surpass its construction and operation costs.
3. A promising financial opportunity.

However, the EIB also introduced an alternative perspective, suggesting the deployment of energy storage batteries instead of the interconnector project. In response, the project's proponents have offered technical arguments:

- The assessment did not factor in the typical annual battery degradation rate of 2.6%.
- The assumption of 100% battery usage contradicts the usual usage rate of approximately 90%.
- The lifespan of batteries, approximately 15 years, is notably shorter than the projected 40-50 years for the electricity interconnector.

Yet, the EIB's assessment solely focused on financial aspects, omitting other significant benefits tied to the electricity project:

- A long-held aspiration to end Cyprus' energy isolation would be fulfilled, no longer positioning the island as the sole energy-isolated country within the EU.
- The initiative would establish a dependable energy corridor connecting Israel, Cyprus, Greece, and the broader European Union, ensuring an uninterrupted flow of energy.
- The project carries geopolitical significance, fostering trilateral collaboration among Cyprus, Israel, and Greece.
- By integrating Cyprus into the European Electricity Market through its connection with Greece, the project could lead to reduced electricity costs and a more competitive market.
- Aligning with EU environmental targets, the project maximizes the integration of renewable energy sources.

Looking ahead, the project owner, working alongside technical-economic advisors, intends to engage with the EIB in September to discuss their perspectives. Meanwhile, project supporters remain actively engaged with stakeholders, including the Cyprus Government and the European Commission.

Despite the setback, the project's backers maintain their commitment to realizing the EuroAsia electricity interconnector project, considering it a significant endeavor for Cyprus' societal, economic, and energy advancement.

For additional insights into the bank's backing of similar projects in Greece, visit [https://euroasia-interconnector.com/at-glance/project-timeline/euroasia-interconnector-eib/](https://euroasia-interconnector.com/at-glance/project-timeline/euroasia-interconnector-eib/).

About EuroAsia Interconnector:

The EuroAsia Interconnector project seeks to establish a robust power connection between Israel, Cyprus, and Greece, envisioning a unified energy network that bolsters independence and security through the seamless transmission of electricity. The venture promises to eradicate Cyprus' enduring energy isolation, aligning with ecologically mindful goals. In addition to potentially reducing electricity costs for consumers, the initiative could transform Cyprus into a pivotal energy conduit bridging Europe and Asia. The project targets completion by 2028-2029, sustained by substantial EU funding.*

TAGS
Cyprus  |  electricity  |  energy

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