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The long-awaited electricity interconnection between Crete and Cyprus is facing mounting financial pressure, with delays already adding at least €8 million in extra costs. And while a recent resumption of seabed surveys has temporarily halted further increases, the question remains—who will ultimately pay for the setbacks?
Millions in Extra Costs Already Piling Up
According to Kathimerini reporter Chrysa Liaggou, the project, known as the Great Sea Interconnector, is crucial for both Greece and Cyprus, promising to enhance energy security and reduce electricity costs. But delays, particularly in issuing necessary navigation warnings (NAVTEX) for research vessels, have caused setbacks that could weigh heavily on taxpayers or electricity consumers.
French company Nexans, which is responsible for constructing the €1.4 billion submarine cable, is demanding compensation for the delays from ADMIE, Greece’s independent power transmission operator. ADMIE, in turn, is looking to pass these costs onto the Greek state, arguing that it was not responsible for the bureaucratic holdup.
Who Will Pay?
That’s the big question. The Greek government appears unwilling to let ADMIE absorb the costs, meaning the burden will either fall on taxpayers or be passed on to consumers through electricity bills. Chinese shareholders of State Grid, which holds a stake in ADMIE, are reportedly raising objections to how the costs are being handled.
Meanwhile, any additional expenses beyond the project's already hefty €1.9 billion budget will further strain electricity prices in both Greece and Cyprus. Regulators have approved capital expenditures of €572 million for the project, with Greek consumers covering 37% and Cypriot consumers 63%. But if costs continue to rise, this split may be revisited.
A Risky Gamble on Geopolitical Uncertainties
Greece and Cyprus previously agreed to share geopolitical risks for the project on a 50-50 basis, a shift from the original 37-63 split. This arrangement was key to keeping the project afloat after months of tense negotiations. However, if the project were to collapse entirely, ADMIE could be on the hook for even more—potentially needing to return €200 million in EU funding while facing additional claims from Nexans.
What’s Next?
Regulatory discussions are entering a new phase, with officials from Greece and Cyprus set to meet in Athens to iron out issues surrounding Cyprus' shareholding in the project and regulatory approvals. Cyprus’ Energy Minister Giorgos Papanastasiou and Greek counterpart Theo Skylakakis will sit down to discuss the path forward, while regulators from both countries will also tackle outstanding concerns.
For now, the project moves ahead—but with costs continuing to rise, and uncertainty still lingering, Greek and Cypriot consumers may soon be paying the price.
