Cyprus faces uncertain future as electricity link with Greece stalls

The ambitious Great Sea Interconnector project, aimed at linking the electricity grids of Greece and Cyprus through an underwater cable, has been indefinitely suspended due to geopolitical tensions and financial uncertainties. The project, which is considered a strategic European energy initiative, officially stalled after Greece’s Independent Power Transmission Operator (ADMIE) decided to freeze funding.

The suspension follows a significant incident in July 2024, when Turkish warships intercepted an Italian survey vessel conducting seabed studies for the cable's route south of the Greek island of Kasos. The Turkish intervention highlighted ongoing tensions in the Eastern Mediterranean, especially in areas where maritime boundaries are disputed. The encounter happened at a preliminary phase of the project, well before any cable laying began, making future progress difficult without a political compromise.

Despite the setback, the Cypriot government is holding out hope that the project may resume if geopolitical obstacles ease. Cyprus' Energy Minister George Papanastasiou confirmed that ADMIE's decision to halt payments was made in agreement with the French cable manufacturer Nexans, which is contracted to produce and install the submarine cable. According to Papanastasiou, Nexans continues manufacturing the cable as planned, even though ADMIE has not yet given the final go-ahead for full-scale production.

Nexans downplayed the situation, stating that previous payments received allow construction to proceed. However, behind the scenes, the company has been pressuring ADMIE to issue the "Full Notice to Proceed" — a key contractual milestone that would trigger full payment obligations under the €1.4 billion deal.

The suspension highlights the complex intersection of technical, financial, and geopolitical challenges facing the project. With Turkey asserting its influence in the Eastern Mediterranean and France having a direct stake through Nexans, Greece and Cyprus are now looking for broader diplomatic support from France, Israel, and the US to revive the project.

The Great Sea Interconnector is crucial for Cyprus, which remains the only EU country without an electricity link to the mainland grid. The project's delay leaves the island isolated and dependent on costly fossil fuel imports, slowing its transition to renewable energy and increasing its vulnerability to energy price fluctuations.

While Cyprus remains committed to the project, the current geopolitical climate and the lack of a breakthrough in Greek-Turkish talks make its future uncertain. For now, the project remains on ice, with hopes pinned on shifting regional dynamics and increased diplomatic engagement.