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Late last night, Greece's Ministry of Environment and Energy introduced an important amendment that aims to share the geopolitical risks equally between Greece and Cyprus for the Great Sea Interconnector, a significant electric interconnection project. This amendment is part of a larger bill called the “New Development Program for Public Investments,” which is expected to be voted on in Parliament today.
To kickstart the marine exploration and move forward with the cable's construction, the regulatory authorities from both countries need to update a key agreement known as the Joint Decision on the Cross-Border Cost Allocation (CBCA). They must complete this update by Monday, September 30, so that the Independent Power Transmission Operator (IPTO) can officially confirm its commitments to Nexans, a French company, under a €1.4 billion contract.
Key Points of the Amendment:
- Funding for Progress: The amendment specifies that IPTO will pay €26.8 million to continue work on the project while waiting for the necessary approvals from the regulatory bodies in Greece and Cyprus. This is crucial for setting the financial framework for the project’s earnings in 2025.
- Protection Against Delays: If the project faces delays or cancellations due to factors outside of the control of the IPTO and its contractors, the implementing body can recover 13% of the costs that cannot be reclaimed through the state budget. This is a safeguard to ensure some financial recovery in unforeseen circumstances.
- Total Cost Recovery: The amendment aims to ultimately allow the IPTO to recover up to 50% of the total investment and operational costs over time. This recovery will happen gradually and will be adjusted annually until the full amount is recovered.
- Need for Joint Decisions: The amendment emphasizes that before any recovery can take place, the Joint Decision on Cost Allocation needs to be modified. This change will allow for an equal sharing of recovery amounts related to the project between Greece and Cyprus.
- Timelines and Approval: A joint decision from the regulatory authorities of both countries will be necessary to confirm that all conditions are met and to recognize the investment and operational costs involved. This must happen within six months of submission.
- Ministerial Oversight: Additionally, the Ministers of Finance, and Environment and Energy will need to determine the total amount that can be recovered, how long it will take, and how it will be distributed each year. This decision is expected to be made within two months of the regulatory recommendation.
Overall, these provisions will come into effect once the Minister of Environment and Energy issues a decision modifying the CBCA, as agreed upon in a framework between the Greek Government and the Republic of Cyprus on September 20, 2024. This amendment marks a crucial step towards advancing the Great Sea Interconnector project, which is expected to enhance energy cooperation between the two nations.
[With info from CNA]
