Panayiotis Rougalas
The Great Sea Interconnector (GSI) still lacks a reliable final cost estimate and a firm timetable for completing its assessment, as the European Investment Bank awaits clarification of crucial technical, financial and contractual details.
Speaking to Kathimerini a few hours before the opening of the 22nd Economist Cyprus Summit, for which the newspaper is a media sponsor, EIB Vice President Ioannis Tsakiris says the bank is discussing four key issues with Greece’s Independent Power Transmission Operator, known as IPTO.
We can consider cybersecurity projects, surveillance systems, critical infrastructure and investments in military mobility—projects already underway in many European countries.
Seabed surveys will be decisive. They have yet to cover the most technically demanding section of the route, and their findings will affect the project’s cost, timetable and further consideration of its funding application.
Q: Mr. Tsakiris, the EIB recorded €5.2 billion in housing investment in 2024 and plans to double financing to €6 billion by 2026, with a target of building one million homes annually. Cyprus has one of the EU’s poorest records on housing affordability. What specific support can it expect?
The answer lies in increasing the supply of homes people can actually afford. For a young worker or a family in Cyprus, European housing policy becomes meaningful when paying the rent leaves enough for life’s other needs. That is the priority we have placed at the heart of our work.
Our plan has three pillars—new affordable homes, renovation of existing housing and innovation in construction to bring down costs and delivery times.
Financing reached €5.2 billion in 2025, with a target of €6 billion in 2026 and a contribution toward one million affordable and sustainable homes by 2030. So let me clarify that the housing target is not annual.
For Cyprus, as for any country, we can offer long-term financing for a structured affordable housing program, alongside technical support to help design it. Such a program could include new homes for affordable rental and building renovations, with clear eligibility criteria and conditions that keep rents affordable over time.
Its structure would, of course, have to be agreed with the Cypriot authorities and the organizations delivering it, based on specific projects. These options are provided for in our European action plan.
We have already established a substantial foundation for cooperation in Cyprus. The €125 million in financing for university infrastructure at the Cyprus University of Technology and Paphos Municipality includes 703 additional student accommodation places in Limassol and Paphos.
We are also in preliminary discussions with the University of Cyprus about supporting its new student residence, which is expected to provide around 900 rooms.
As we have told the relevant authorities, we are ready to begin discussions on financing broader affordable housing projects once the appropriate legal framework is in place.
What is needed now is a similar approach on a larger scale — specific properties, projects ready to proceed and organizations capable of delivering them. The EIB can help with both financing and preparation.
The result we want is measurable. More homes, with rents that match the incomes of the people who need them.
Q: EIB Group financing in Cyprus reached a record €372 million in 2025, mainly supporting schools, roads, the Thalia program, and health care. Can that level be sustained in 2026–27? Where do you see the next bottleneck—transport or energy and water?
Cyprus can count on a strong and consistent EIB presence, as our record over the years demonstrates. But the amount of financing each year depends on the projects ready to move forward.
The €372 million provided in 2025 was a significant result, though it does not automatically constitute an annual commitment for subsequent years.
The continuity of our cooperation is clearer over a longer period. The Group has provided more than €1.5 billion to Cyprus over the past five years.
In 2025, we invested in projects supporting the country’s infrastructure and growth potential for the years ahead. And since you mentioned Thalia, I am pleased to announce €189 million in new financing, bringing the bank’s total support for the program to €369 million. This demonstrates our continued commitment to sustainable development and social cohesion in Cyprus.
Looking ahead, I would place particular emphasis on both energy and water.
In energy, the priority is to enable Cyprus to use more of the clean electricity it produces. That requires adequate storage, upgraded grids and a more flexible energy system. We expect to announce a new financing agreement with the Electricity Authority of Cyprus in the coming months to support precisely that effort.
For water, reliable supplies, fewer losses, better management of demand and reuse of treated water directly affect households, agriculture and tourism. If a request is submitted, we are ready to consider financing the country’s investment program for the next five years.
Transport remains important, particularly road safety and sustainable mobility. But energy and water affect the cost of living and the functioning of the entire economy.
The next major challenge is turning identified needs into projects with completed studies, permits, credible budgets and clear timetables. Their readiness will determine how much financing can become actual investment in 2026–27. That is why the EIB’s technical support matters so much.
The green transition
Q: You recently said the EIB is committed to supporting the green transition and sustainable mobility in Greece and Cyprus, announcing support for the Joltie electric vehicle charging network. Cyprus remains an energy island, facing challenges with storage, grid upgrades and the Great Sea Interconnector. Is the EIB ready to take on more risk for Vasiliko, storage and island interconnections?
We are ready to use our financing tools to support Cyprus’ energy transition. Taking on risk is part of our role, particularly when it is backed by a thorough assessment and a credible implementation plan.
Joltie illustrates how this approach works. We have signed a €17.5 million financing agreement with the company through InvestEU for approximately 2,200 charging points across Greece and Cyprus. In doing so, we support both a growing business and the expansion of infrastructure essential to electric mobility.
We have also taken specific action on storage. Through our JASPERS advisory services, we supported Cyprus’ Energy Ministry in designing a program combining storage with commercial and industrial photovoltaic installations, drawing on a €40 million European grant.
Our contribution was advisory, helping design a program that will allow more renewable energy onto the system and improve grid stability.
As for Vasiliko, we understand its strategic importance to the country’s energy supply. The EIB Group remains actively committed to supporting the project, and we are moving ahead with a significant €1.5 million technical assistance agreement for the Vasiliko Energy Center, expected to be finalized this week.
Any discussion of further financing must take account of existing contractual obligations, actual progress on the work, and updated cost and completion estimates. It would be irresponsible to anticipate a new financing decision.
For interconnections, particularly GSI, further consideration of the application requires greater clarity on the project’s technical, financial and contractual parameters.
The EIB can contribute to complex investments, as it has demonstrated. But we need to understand the risks being taken, how they will be managed and what consumers stand to gain.
Nothing ready to announce
Q: When do you expect the economic assessment of GSI to be completed? Do you have any early indications of its findings or where the project’s cost is likely to settle?
As we speak, we cannot announce a reliable completion date for the assessment or a confirmed estimate of the final cost. The economic assessment is directly tied to technical and contractual information that still needs clarification.
Since receiving IPTO’s financing application, we have been discussing four main issues with the project developer—updated costs and the corresponding approvals from the relevant regulators, the timetable and key milestones, the award and execution of major contracts, and the ownership structure of the project company, together with its responsibilities for construction and operation.
Seabed surveys are a decisive factor. According to the information available to us, the surveys completed so far do not cover the most technically demanding section of the route.
Successfully restarting and completing them, after a suspension of more than a year, would be a significant step forward.
Their importance is quite specific. The findings could affect installation requirements and, consequently, costs, completion times and contractual arrangements. We see this in other electricity interconnections, too.
Once we have a clearer picture of the surveys’ progress and findings, we will have a firmer basis for further consideration of the financing application.
Until then, announcing a figure or a date would suggest a level of certainty that the available evidence does not support.
Security and defense
Q: As a former Greek deputy minister for development and investment responsible for European funds, you know the region well. The EIB has now doubled investment in security and housing and set a €100 billion target, focusing on security, the energy transition and innovation. For a frontline state such as Cyprus, what does “security” mean to the EIB, and where do you draw the line?
For Cyprus, given its location, security is directly linked to protecting critical infrastructure, ensuring secure communications and responding to threats.
The EIB’s increased activity creates more financing opportunities in these areas. Let me also update the overall figure. The Group’s financing target for 2026 is €100 billion, including €4.5 billion for security and defense.
In practice, we can consider cybersecurity projects, surveillance systems, critical infrastructure and investments in military mobility — projects already underway in many European countries.
The scope of financing has expanded to include eligible equipment and infrastructure intended exclusively for military use.
In Cyprus, we are already in advanced discussions with the Defense Ministry about directly financing such infrastructure and equipment projects in 2027.
We also support businesses and research developing the relevant technological capabilities in Europe.
To put it simply, for a Cypriot business, this could mean access to financing to develop a security technology. For a public body, it could mean an assessment of an investment to protect critical facilities or improve infrastructure supporting mobility.
Each proposal must be submitted and assessed individually.
Our limits are clear. Weapons and ammunition remain outside the EIB’s direct financing.
My experience managing European resources has taught me that a policy priority only delivers value when it is implemented. Here, too, the test is specific — which infrastructure is better protected, which technological capabilities are developed and how much safer citizens become.
Partnerships with banks
Q: At last month’s Cyprus Chamber of Commerce forum, local businesses complained that they need a simpler route to EU financing. EIB funds are available, but they are channeled through banks. Are you satisfied with how Cypriot banks pass on the benefits to small businesses and startups, or are you planning more direct EIB involvement through equity and venture debt?
A small business should be able to understand which financing tool is right for it, where to apply and what better terms it can secure. When that process remains difficult, it needs improving, even if substantial resources are available.
We judge our bank partnerships by the benefits to the end recipient — less collateral, longer repayment periods and access to financing for businesses struggling to obtain it.
I would not give a blanket assessment of all Cypriot banks without specific evidence of how each agreement is being implemented.
There is, however, a clear recent example. The European Investment Fund’s agreement with Eurobank, through InvestEU, is expected to unlock up to €62.5 million in new lending for Cypriot small and medium-sized businesses and startups. The terms include lower collateral requirements and longer repayment periods. That is where the practical benefits of European support should be evident.
Access to equity investment is also developing. Through the Cyprus Equity Fund, the EIF supports the 33East Venture Capital Fund, which invests in innovative early-stage startups in Cyprus.
In its first 18 months, 33East has financed 14 startups in Cyprus, providing more than €9 million in equity investment.
This is particularly valuable for businesses that need capital to grow before they generate the cash flow required to qualify for a bank loan.
The EIB also offers direct financing through its venture debt program for eligible innovative businesses involving higher levels of commercial risk. Joltie and Hellas Direct are specific examples.
There are already several financing options. Our job is to make them work for businesses with different needs. European support succeeds when the right financing reaches a business at the moment it needs it.
