Apostolos Tomaras
The government and newly appointed Energy Minister Michalis Damianou will face a series of critical energy decisions in 2026 that will largely determine Cyprus’ energy future. At stake is not just policy direction, but whether the Republic will continue to stand as the EU’s last energy-isolated member state.
The reshuffle at the Energy Ministry, combined with the decision to retain Finance Minister Makis Keravnos, appears to have tipped the president’s balance toward a school of thought that treats the electricity interconnection cable primarily as an investment project, rather than a strategic infrastructure asset. In doing so, the broader geopolitical and energy-security dimensions of the project have been pushed into the background.
The departure of George Papanastasiou may have put an end to the government’s mixed messaging, but it has not erased internal disagreement. That became clear when DIKO president Nikolas Papadopoulos, speaking from the floor of the House, openly opposed the government’s handling of the electricity cable, directly challenging the president and the finance minister.
The situation becomes even more telling in light of what the former energy minister said in an interview with Kathimerini after his exit from government. Freed from ministerial constraints, Papanastasiou openly expressed his disagreement with government decisions on two key aspects of the cable project, disagreements that appear to have played a role in his removal.
Papanastasiou’s pointed message
Without naming names, Papanastasiou took aim at the logic that recently put Nicosia and Athens in a difficult position over the electricity interconnection. That approach, he suggested, is championed by the Ministry of Finance and ultimately endorsed by the Presidency.
His core argument was simple but sharp: evaluating the cable solely through the lens of financial return misses the point.
“If one looks at the project in isolation, purely as an investment, it may not appear viable,” he said. “But what is the value of ending the energy isolation of a member state? What is the value of ensuring energy security when local production cannot cover demand? What is the value of importing electricity that is cheaper than domestic generation?”
His conclusion was unmistakable: Some projects are strategic and cannot be subjected to strict sustainability or profitability criteria.
The €25 million that froze everything
Papanastasiou was particularly careful in his wording when addressing Finance Minister Makis Keravnos, but his disagreement with the logic adopted by the Finance Ministry and fully embraced by the Presidency was clear.
One of the issues he highlighted appears to have been the final breaking point: the frozen €25 million payment from the Republic of Cyprus to ADMIE, the project’s implementation agency.
“A member state cannot unilaterally decide not to pay,” Papanastasiou stressed. The project, he explained, falls under a clear EU regulatory framework governing Projects of Common Interest. Beyond that, there are memoranda of understanding and binding commitments that define the obligations of participating states.
In short: the government, he argued, cannot act alone.
Disagreement over the project update
The former minister also distanced himself from the joint decision by President Nikos Christodoulides and Greek Prime Minister Kyriakos Mitsotakis to update the financial parameters of the cable project.
While acknowledging that states with financial obligations may seek revisions, Papanastasiou aligned himself with the European Commission’s position, which he said clearly views such an update as unnecessary.
“I agree with the Commission,” he said bluntly.
A warning to ADMIE as well
Papanastasiou was careful not to place all responsibility on the political side. He also pointed a finger at ADMIE, stressing that progress cannot be demonstrated merely by manufacturing the cable itself.
His comment was widely interpreted as a reference to delays and difficulties in launching seabed surveys, a crucial step before the cable can be laid.
A hot potato for Damianou
For now, the government has bought itself some breathing space following the decision to update the project’s economic parameters, a move that eased public pressure.
But that relief will be short-lived.
Sooner rather than later, Energy Minister Michalis Damianou will have to confront the central question: Will Nicosia honor its commitments under the memorandum of understanding, or not?
Adding to the pressure is DIKO president Nikolas Papadopoulos, whose outspoken criticism keeps the issue firmly in the public spotlight and risks turning into an internal party problem.
That raises an uncomfortable question: what stance will Damianou take, given that he also serves as DIKO vice president?
Papadopoulos has openly backed the former energy minister and sharply criticized Makis Keravnos. If Cyprus continues to refuse to meet its financial obligations to ADMIE, Damianou may soon find himself caught between party loyalty, ministerial responsibility, and presidential policy.
And when that happens, the electricity cable may no longer be just an energy project, but a full-blown political test.
