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13 November, 2024
 
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EU probes €101 million grant in Vasilikos project and Cyprus officials' role

Investigation centers on misuse of €101 million EU grant, with top government figures likely to be questioned by 2026.

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The European Public Prosecutor's Office (EPPO) investigation into potential misconduct involving Cyprus's Vasilikos liquefied natural gas (LNG) terminal project, which received €101 million in EU funds, is advancing and is now in a critical phase, according to a report by APostolos Tomaras. Though no updates have been provided since the probe began in March, independent sources confirm that the investigative team is actively gathering evidence from government bodies involved in the terminal's contract—from its bidding and awarding stages to financing and management. The data collection phase is expected to wrap up by early 2025, paving the way for the next investigative stage, where a list of key individuals involved in the project will be compiled for questioning. These initial testimonies are anticipated to help pinpoint any criminal liabilities within government and administrative roles in relation to the project's implementation and financial management.

The EPPO is focusing solely on the misuse of EU funds for the Vasilikos project, which was financially backed by the Connecting Europe Facility and the European Commission. Following the project's collapse after the Chinese consortium's departure, the EU has requested the return of its grant, sparking this investigation into how these funds were utilized and managed. This early stage involves extensive evidence gathering from multiple EU and Cypriot authorities responsible for different facets of the project, such as award, payment, and compliance. In Cyprus, testimonies will be collected by an EPPO-led investigative team, which reports back to Luxembourg. Thus far, no obstacles or lack of cooperation have been encountered from any government entity, according to sources.

The investigation will intensify around late 2025 or early 2026 when the EPPO assesses findings and compiles a list of senior officials, technocrats, and possibly political figures for further questioning to assess their roles in the project's financial and procedural outcomes. If sufficient evidence of misconduct is found, legal actions could extend to third parties such as the European Investment Bank, which provided loans for the project and continues to back it.

Though EPPO’s mandate is limited to criminal matters, administrative irregularities are also under scrutiny. Administrative bodies of the EU are reviewing potential issues related to the €101 million state grant. Depending on the outcome, Cyprus could face sanctions, including reimbursement of part or all of the funding. This layered investigation signals heightened EU scrutiny on how member states manage EU-funded projects, especially in cases involving large-scale infrastructure.

*To read more of Apostolos Tomaras' article and gain full access to in-depth reports (in Greek), subscribe now to Kathimerini's print edition and stay informed with comprehensive coverage on this and more!

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Cyprus  |  Europe  |  energy  |  scandal

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