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The upcoming visit of Cypriot President Nicos Christodoulides to Athens on Wednesday could mark the end of months of uncertainty surrounding the Cyprus-Crete electricity interconnection project, according to a report by Apostolos Tomaras in Sunday's Kathimerini. Ongoing consultations, which began last Tuesday, are reportedly progressing toward an agreement between Cyprus and Greece on the long-delayed electricity cable project.
To avoid burdening consumers, Cyprus has proposed covering the construction costs attributed to it, totaling €125 million over five years, using funds from its Pollution Fund.
Negotiations have been focused on addressing concerns from both sides, with Cyprus pushing for a balanced sharing of geopolitical risk and Greece focusing on financial implications. Unofficial reports suggest that Greece’s energy operator, ADMIE, has agreed to equally share the geopolitical risks with Cyprus, a shift from the previously proposed 37%-63% split in favor of Greece. This agreement appears to have been reached after discussions held in Nicosia last Tuesday.
To avoid burdening consumers, Cyprus has proposed covering the construction costs attributed to it, totaling €125 million over five years, using funds from its Pollution Fund. Cost recovery for the project is set to begin in January 2025. Additionally, Cyprus has committed to a €100 million investment in the project's share capital, which remains under negotiation.
Despite this progress, there has been frustration in Athens over delays. Greek Environment and Energy Minister Theodoros Skylakakis has expressed dissatisfaction, emphasizing the need for a swift resolution, particularly as the construction contract with French company NEXANS faces regulatory hurdles.
Both sides are aiming to finalize the agreement before Christodoulides’ visit. However, any remaining issues may be discussed at a higher political level between the Cypriot president and Greek Prime Minister Kyriakos Mitsotakis. Time is of the essence, as a failure to complete the project could result in Greece returning €140 million of European funding allocated for the interconnection.
The resolution of these talks is critical for ensuring energy security and economic cooperation between Cyprus and Greece, with both sides optimistic about reaching a formal agreement soon.
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