Energy minister and finance minister clash over Cyprus' energy future

The Republic of Cyprus is at a critical juncture in its energy sector as multiple projects face delays and uncertainty, raising concerns about the country's future energy security and international relations.

The situation has been exacerbated by the abrupt halt in construction at the Vasilikos power plant by a Chinese consortium and unresolved plans to introduce natural gas for electricity generation. The delays are threatening to extend Cyprus's status as the last EU member state without an energy interconnection to the European grid.

Tensions reached a boiling point recently when French company Nexans, contracted to build an electrical cable linking Cyprus to the European power system via Greece, issued an ultimatum. In a letter to the Greek Independent Power Transmission Operator (IPTO), Nexans demanded that all pending issues be resolved by next Friday or it would halt construction, putting the project's future in jeopardy. This ultimatum is seen as a reaction to prolonged indecision from Nicosia, which has prompted complaints from several parties, including the European Commission, which is partially funding the project with more than €600 million.

Within the Cypriot government, there are conflicting views on the viability of the project. Finance Minister Makis Keravnos has openly expressed skepticism about Cyprus's participation, citing financial concerns. In contrast, Energy Minister George Papanastasiou emphasizes the strategic importance of the cable for Cyprus's energy independence and geopolitical positioning.

In addition to the pressure from Nexans, the European Commission has intervened, attempting to assuage Cypriot concerns about the project's geopolitical risks. However, frustration in Brussels over Nicosia's slow decision-making is evident, with criticism also emerging from Athens, where Greek Energy Minister Kostas Skrekas has publicly voiced dissatisfaction with the delays.

As the debate continues, the absence of a clear position from Cypriot President Nikos Christodoulides on the issue has sparked political speculation. Sources close to the administration suggest that the government is trying to minimize the political fallout by maintaining a low profile on the matter, while also upholding the independence of the Cyprus Energy Regulatory Authority (CERA) to avoid further straining relations with Brussels.

Energy Minister Papanastasiou has indicated that a decision regarding Cyprus’s participation in the cable project will need to be made soon, as the country faces a crucial choice that could determine its energy future and its role within the European energy landscape.

[Summary of Apostolis Tomaras' original story in Greek published in Kathimerini's Cyprus edition]