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24 July, 2024
 
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The EuroAsia saga continues

The EuroAsia project takes a crucial stride with the cable agreement, but its future hinges on sustainability efforts from authorities and EIB

George Kakouris

George Kakouris

In a statement to "K" news, the European Commission expressed its appreciation for the recent signing of the cable purchase agreement for the EuroAsia Interconnector. The Commission views this as a significant milestone in the project's implementation. The EU's financial contribution is limited to funding the section connecting Crete and Cyprus, amounting to 657 million euros from the "Connecting Europe Facility" and an additional 100 million euros through the "Recovery and Resilience Facility," making up a total of 1.57 billion euros.

Regarding the project's overall financing, the implementing entity, which is a private initiative with government support, seeks to secure additional funding beyond the EU's contributions. The entity has reportedly requested 600 million euros in state guarantees to attract investors and is considering seeking a loan from the European Investment Bank (EIB).

Greek Energy Minister Giorgos Papastasiou mentioned the possibility of state support for the project, either through government guarantees to secure loans or through participation in the entity's equity. However, the government has not yet committed to providing financial assistance.

The EuroAsia Interconnector aims to connect the electricity networks of Israel, Cyprus, and Greece through submarine cables with a total length of 1,200 kilometers. The EU considers the project a "Project of Common Interest," and its successful completion is a priority for energy infrastructure.

The European Commission closely monitors the project's progress and its compliance with necessary conditions for advancement. The second phase, connecting Cyprus to Israel, will be developed after completing the Cyprus-Crete interconnection.

It is essential for the project's sustainability that it receives support not only from the government but also from the EIB and the European Commission. However, there has been no response from the EIB at the time of reporting.

Commission Praises Milestone in EuroAsia Interconnector

In response to inquiries from "K" news, Commission spokesperson Antalber Gians, responsible for energy matters, welcomed the agreement's signing for the EuroAsia Interconnector cables, emphasizing its importance as a significant milestone in the project's implementation.

"We look forward to the successful completion of the first phase of the EuroAsia Interconnector, which will connect Cyprus to Crete, ending Cyprus's energy isolation," added Gians.

He referred to the interconnection as a "landmark project" that will link all EU member states once completed, benefiting from strong political and significant financial support from the EU. The EU has provided funding of 657 million euros through the "Connecting Europe Facility" and an additional 100 million euros through the "Recovery and Resilience Facility," contributing to the total construction cost of 1.57 billion euros.

Gians clarified that the second phase, connecting Cyprus to Israel, will be developed after the Cyprus-Crete interconnection is completed. He highlighted that the EU has already provided funding for preparatory studies related to the connection between Hadera in Israel and Kofinou in Cyprus.

The current EU funding specifically applies to the section between Kofinou (Cyprus) and Korakia, Crete (Greece). Gians stressed that the completion of this interconnection is a prerequisite for initiating the second phase connecting Cyprus to Israel.

Political Endorsement

Despite reports suggesting concerns from the European Investment Bank (EIB) regarding project financing, the European Commission's approach appears different due to the broader political dimension of the EuroAsia Interconnector. Nevertheless, this does not mean that milestones are being disregarded.

The project is presented by its implementing entity as having the potential to contribute to two key EU objectives: ending Cyprus's energy isolation and integrating it into the EU's electricity grid, as well as promoting the development of renewable energy networks in the Mediterranean region. The interconnection with Israel is considered by Brussels to be the project's second phase.

However, the Commission's milestones are practical and related to the progress of project implementation.

Goals for Progress

On the day of the announcement of the agreement between the EuroAsia Interconnector implementing entity and French-Norwegian company Nexans for cable procurement and laying, the Greek Energy Minister had outlined the goals that needed to be fulfilled to secure project financing.

The first goal was the contract for cable supply and laying, which has now been achieved with the agreement between the implementing entity and Nexans. The second goal was to secure the participation of the Hellenic Electricity Transmission System Operator (ADMIE) in the project. The ADMIE signed a letter of intent to participate in managing the cable and electricity transmission.

The third goal, according to Minister Papastasiou, is the signing of the agreement for the construction of the voltage converter. This issue involves the specific placement of the voltage converter by Siemens, a company that provides voltage converters for other EU networks as well, as reported by the Cyprus News Agency (CNA) among others.

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Cyprus  |  politics  |  government

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