French infrastructure investor Meridiam’s decision to acquire a majority stake in the Great Sea Interconnector (GSI) has boosted the project’s prospects, but Cyprus cannot afford to remain a bystander, energy expert Charles Ellinas told CNA.
Ellinas described the agreement as “very significant”, saying the GSI had gained its own momentum and could attract additional investors. He expressed disappointment, however, at what he described as Cyprus’ lack of active involvement in the latest developments.
“We have ended up being bystanders,” he said, adding that announcements by the Ministries of Finance and Energy last week suggested the Cypriot government had not adopted a clear position and had remained in the background.
Ellinas said he believed President Nikos Christodoulides had probably been briefed by Greek Prime Minister Kyriakos Mitsotakis, but argued there had been no broader briefing or visible participation by Cypriot representatives.
Meridiam investment boosts project’s prospects
According to Ellinas, Meridiam’s participation makes the project far more likely to proceed because the presence of an independent investor could encourage others to join.
He also referred to the agreement with Nexans to conduct seabed surveys, noting that the involvement of French companies could strengthen French backing if Turkey attempted to obstruct the work.
Ellinas also linked the project to Cyprus’ recent electricity supply problems, arguing that it could form part of the solution.
“The presence of the GSI will provide Cyprus with energy security,” he said.
Delay expected, not cancellation
Ellinas said the electricity interconnection project was likely to face delays, recalling that Nexans had announced a two-year postponement to construction of the cable and was preparing a revised timetable with Greece’s Independent Power Transmission Operator (ADMIE).
He said Nexans had other projects under way and could not remain on hold indefinitely while decisions on the GSI were pending.
“It is not stopping. It is simply being frozen under an agreement with ADMIE,” he said, adding that the latest developments could help reduce the delay.
Referring to the European Investment Bank’s viability study, Ellinas argued that Meridiam’s investment had fundamentally changed the picture.
In his view, the decision by a private company to invest in a project of this scale showed it considered the GSI commercially viable and profitable.
‘Investors will be found with or without Cyprus’
Asked whether the GSI could proceed without financial participation from the Republic of Cyprus, Ellinas said the annual payment of €25 million over five years was provided for under legally binding agreements.
He noted, however, that recent statements by the Ministers of Finance and Energy indicated that the Cypriot government did not currently intend to participate as a shareholder by investing the €100 million it had previously committed.
Ellinas argued that position should be reconsidered, saying Cyprus should have both a stake and a voice in a project that is crucial to its energy security.
“Cyprus cannot allow others to hold excessive control over the project without having a say itself,” he said.
He added that the project could still secure financing without Cypriot equity participation, suggesting companies from the United Arab Emirates and the United States could also express interest.
“As far as I am concerned, there is no issue. Investors will be found with or without Cyprus,” he said, describing the prospect of the country remaining a bystander as unacceptable.
Interconnector could reduce electricity costs
Ellinas said Cyprus would still benefit from the GSI even without an equity stake because the project would allow electricity imports from Greece.
He rejected the argument that battery storage alone could resolve Cyprus’ energy security challenges, saying batteries provide only short-term solutions and cannot address prolonged supply shortages caused by faults at power generation units.
Instead, he said the electricity interconnection would allow Cyprus to import cheaper electricity, helping reduce power costs.
Ellinas said the next key milestone would be the start of seabed surveys for the cable route.
“We need to hear soon how the seabed surveys will proceed,” he said, adding that once that issue was resolved, Nexans was expected to lift the freeze on the project.
He noted that Meridiam had been studying the GSI for several years, maintains an office in Athens and is familiar with the project’s details. He described the investment as sound and said the announcement opened the way for the project’s implementation.
