Philenews sources that negotiations between the Cypriot Government, the Greek Government, and IPTO regarding the electricity interconnection have reached an impasse due to the Greek side’s insistence on finalising the issue of the Cypriot government’s participation in the share capital of Great Sea Interconnector within the week.
The Greek side seeks a 100 million euro investment and approximately 30% of the shares.
IPTO believes that if the Cypriot Government announces its decision to acquire a significant stake in the special-purpose company that will serve as the project’s implementing entity, likely to be registered as a Cypriot company, it will send a positive signal to investors and financiers, indicating the Republic of Cyprus’s strong support for the project.
This, IPTO argues, will enhance the project’s profitability and financing prospects, attracting investors and private banks, and potentially securing a loan from the European Investment Bank (EIB) with a much lower interest rate than what banks in Greece and Cyprus offer.
On the other hand, the government maintains that it cannot deviate from its commitment to make a decision on acquiring or not acquiring shares in Great Sea Interconnector until the completion of evaluation studies by a foreign firm on the cost-benefit analysis prepared by Exergia for IPTO.
In recent weeks, the Government has twice invited tenders for the purchase of services from foreign firms specialising in energy issues, but only DNV responded to both invitations.
It has been officially announced that the Republic will not be ready to have the study and make its decisions on acquiring shares in GSI before November.
However, as the Cabinet is expected to make decisions tomorrow on the changes requested by IPTO and the Government regarding the regulatory framework, the Greek side is pushing for a resolution on the issue of the partnership between IPTO and the Republic of Cyprus, possibly through the Transmission System Operator of Cyprus (TSOC).
Philenews reports that the Presidency is inclined to issue a decision tomorrow that will further emphasise its interest in acquiring shares in the implementing entity, with substantial representation and voice on the board of directors.
However, it also wants to allow time for the evaluation studies to assess the project’s viability for investors-shareholders before making a binding decision.
The issue may be resolved within the day, as the Cabinet is expected to make decisions tomorrow. The main item on the agenda will be the content of the agreement reached on September 2, following consultations between Energy Minister George Papanastasiou, Deputy Minister to the President Irene Piki, and President Christodoulides.
This agreement will include the Greek Government’s acceptance to share 50-50 the cost of any unforeseen obstacle that would destroy the investment.
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