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According to a report by Apostolos Tomaras in last Sunday's Kathimerini, the Cyprus-Crete electricity interconnection project, a critical initiative to integrate Cyprus into the European energy grid, is mired in political and economic controversy, threatening its future. The project is at risk of collapse due to unresolved disputes and a lack of decisive action from Cypriot leadership, raising concerns that Cyprus may remain isolated from Europe’s energy network for the foreseeable future.
ADMIE, the Greek power grid operator overseeing the project, warned that construction could be suspended unless issues are resolved, particularly a €100 million funding shortfall. The latest proposal suggests this amount could be drawn from Cyprus' Pollution Fund, which collects €400-500 million annually, though no final agreement has been reached. ADMIE rejected a Cypriot proposal to delay the recovery of project costs from 2025 to 2027.
The controversy has revealed deep divisions within the Cypriot government. Finance Minister Makis Keravnos and Energy Minister George Papanastasiou hold opposing views on the project’s viability, with Keravnos raising concerns about the economic burden on Cypriot consumers and Papanastasiou advocating for the project's long-term benefits despite potential short-term costs.
The project also faces opposition from solar energy producers in Cyprus, who fear the interconnection will undermine their investments by introducing a new competitor into the market. They argue that their industry should be protected for 15 years to ensure its viability against the new power cable’s influence.
Amid these tensions, Israel’s potential participation in the project’s shareholding is seen as a possible solution to Cyprus’ geopolitical concerns, though no official decisions have been made.
As the situation develops, the outcome of the Cyprus-Crete interconnection remains uncertain, with significant political, economic, and geopolitical implications hanging in the balance. The project's success or failure could shape Cyprus' energy future and its integration into the broader European energy market.
