Greece’s electricity transmission operator IPTO is poised to finalise Cyprus’s participation in its subsidiary Great Sea Interconnector (GSI) within days, sources close to the matter said on Friday.
IPTO believes Cypriot involvement will boost the electricity interconnection project’s appeal to investors and lenders, the sources said.
The operator expects Cyprus’s share purchase to aid in securing financing from the European Investment Bank (EIB), which is currently reviewing the request.
The EIB is liaising with Cyprus’s Ministry of Finance and assessing a cost-benefit study prepared by Exergia for IPTO, verifying key assumptions regarding renewable energy sources and the National Climate Action Plan.
Whilst the timeline for EIB’s financing decision remains uncertain, cable manufacturer Nexans is pressing for resolution by month-end.
This pressure may result in an initial letter of intent between the EIB and IPTO, sources indicated.
The Greek side unofficially expressed optimism that the Cypriot government would accept IPTO’s framework agreement, including Cyprus’s stake in GSI.
The Cypriot Presidency is reportedly viewing this step favourably, though no official announcement has been made.
Cypriot President Nikos Christodoulides confirmed progress in talks and is set to meet Greek Prime Minister Kyriakos Mitsotakis in Athens on September 19 to discuss the matter further.
If formalised, Cyprus’s initial stake in GSI is expected to be around 30%, with a share capital of 300-350 million euros.
Cyprus’s 100 million euro contribution would be financed through a Recovery Fund loan. IPTO currently holds 100% of GSI shares.
The share acquisition may be conducted on behalf of the Cyprus Transmission System Operator (TSOC), potentially involving the state in GSI’s future profits and financial risks.
This could necessitate an increase in share capital or a proportional guarantee of a significant portion of the approximately 1.2 billion euro loan taken out by the implementing body to finance the interconnection.
These financial implications are reportedly the primary concerns of Cypriot Finance Minister Makis Keravnos and his advisers, according to the sources.
