Greece’s government is reportedly dissatisfied with Cyprus’s recent decision regarding the proposed electrical interconnection project between the two countries, according to a report by Greek energy news website energypress.gr.
The Greek government is expected to express its concerns during a meeting scheduled for tomorrow between Greek Prime Minister Kyriakos Mitsotakis and Cypriot President Nikos Christodoulides.
Sources close to the Greek Ministry of Energy described the Cypriot government’s decision not to commit to purchasing shares in the Great Sea Interconnector as “a very negative development”, the report said.
If the publication accurately reflects the positions of the Greek Ministry of Energy (which is quite likely, according to philenews sources), then tomorrow’s meeting between Mitsotakis and Christodoulides gains additional interest.
The full publication by energypress.gr (by Thodoris Panagoulis), titled “Electric Interconnection on a Knife’s Edge,” reads as follows:
“Absolute uncertainty and negative prospects are being described by government sources regarding the future of the Great Sea Interconnector project, just a day after the Cypriot Council of Ministers’ decision and on the eve of the Cypriot President’s visit to Athens to meet Prime Minister Kyriakos Mitsotakis, with the issue being a key topic on the agenda.
The Cypriot Council of Ministers’ decision, already shared with the relevant Greek authorities, has, according to energypress sources, not instilled optimism.
Instead, it has raised concerns and deepened the uncertainties surrounding the project.
Firstly, the Cypriots have reportedly made no explicit commitment regarding the €125 million, which, according to statements made by the Cypriot Energy Minister yesterday in Nicosia, Cyprus is supposed to cover over the five-year period leading up to the project’s completion.
Instead, the text of the Council’s decision mentions “up to €125 million.”
Secondly, the necessary regulatory decisions (regarding WACC, etc.) have not been made, nor has there been any commitment as to what they will entail.
Thirdly, and perhaps most significantly, the Cypriot government has once again postponed its decision on equity participation in the project, a commitment of €100 million that had been promised in the past.
The Council’s decision text reportedly states that this decision will be made by December 31, 2024, rather than immediately.
The Greek side considers the Cypriot government’s participation in the GSI’s equity as absolutely essential, especially given these delays.
Such participation would not only be important in itself but would also signal to Greek authorities, IPTO, and others that Cyprus is genuinely committed to the project’s implementation.
“Electrical interconnections are like a tango, both partners need to want to dance,” a senior official at the Greek Ministry of Energy and Environment remarked.
The next 24 hours are seen as critical for the future of the project from the Greek perspective.
Firstly, because the deadline set by Nexans for a final decision is approaching in two days.
Secondly, because Greece (both the government and IPTO) is unwilling to continue paying for a project that the Cypriots may still be unsure of in terms of its utility.
The Greek side views the questioning of the project’s utility—such as the cost-benefit analysis, demands to change the agreed CBCA (Cross Border Cost Allocation) ratio, and the violation of what was agreed in the Nicosia summit—as a fundamental issue that could determine the future of the electrical interconnection and the end of Cyprus’ electrical isolation.”
