Greek energy regulatort authority RAE is reportedly prepared to unilaterally approve the full €48.8 million cost recovery claim by grid operator IPTO for the EuroAsia Interconnector project, despite a previous joint decision with Cyprus’s regulator CERA to reject €36 million of the amount.
Sources say such a move would be surprising, as regulatory decisions on the framework and cross-border cost allocation (CBCA) have traditionally been made jointly.
If RAE breaks from CERA’s position, Greek consumers may have to bear the entire €36.8 million portion rejected by CERA, unless the Cypriot regulator changes its stance under pressure.
The regulators had initially rejected the €36 million because it covered EuroAsia’s expenses for the Cyprus-Israel and Crete-Athens sections unrelated to the current project, as well as IPTO’s premium payment to acquire the project and its €657 million EU grant.
IPTO is reportedly concerned about Cyprus’s reluctance to purchase shares in Great Sea Interconnector before due diligence is completed by a US firm.
Without Cyprus’s participation, IPTO fears it will struggle to attract other investors and may have to rely on high-interest loans from Greek and foreign lenders. The situation could worsen if the European Investment Bank delays approval of a €500 million low-interest loan.
In a surprising development, IPTO has reportedly filed appeals in Greece’s Council of State and Cyprus courts challenging the CBCA provision requiring compensation if the project fails due to fault by IPTO or contractors.
Sources say IPTO particularly objects to compensating consumers for undefined potential benefits lost if the project fails due to its responsibility.
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