Minister backs Cyprus-Crete cable, RAEK to review

According to Apostolos Tomaras' article published in Kathimerini Cyprus in Greek, Cyprus and Greece are poised to resolve lingering issues surrounding the electricity interconnection project between Cyprus and Crete during an upcoming meeting between Cypriot President Nikos Christodoulides and Greek Prime Minister Kyriakos Mitsotakis in Athens next Thursday.

The Cyprus Council of Ministers addressed a key obstacle on Tuesday by approving a plan to recover project costs. Cyprus will contribute €25 million annually for five years to the project's implementing body, IPTO, starting January 1, 2025, with the final payment due December 31, 2029. This decision, announced by Energy Minister George Papanastasiou, aims to ensure that electricity tariffs remain unaffected.

The next step involves finalizing an agreement between Athens and Nicosia. Outstanding issues include the allocation of geopolitical risk—previously set at 37% for Greece and 63% for Cyprus—which has been adjusted to a 50-50 split following recent negotiations. Additionally, Cyprus's participation in the cable’s share capital, potentially requiring €100 million, remains unresolved and is expected to be decided by November.

Cyprus's Energy Regulatory Authority (CERA) is anticipated to revise its July 2, 2024, decision to align with the new Cabinet directive, which will help mitigate previous concerns raised by NEXANS, the cable manufacturer.

The Greek government has expressed relief over the Cabinet's decision, believing it will pave the way for the final resolution of the project's financial and regulatory uncertainties by the end of the week.