As late as yesterday afternoon, it was uncertain whether a draft decision on the electrical interconnection would be submitted to today’s Cabinet meeting, as the relevant services had not prepared all the necessary documents or (in the case of the Law Office) had not completed the legal processing of all the texts.
A government source, when asked by philenews yesterday afternoon, stated that the issue of the electrical interconnection and the proposal for changes to the regulatory framework were not registered on the agenda for today’s Cabinet meeting at that time.
However, the same source mentioned that efforts were ongoing to reach a final agreement between the governments of Cyprus and Greece and IPTO.
Therefore, they left open the possibility that the proposal from the Ministry of Energy would eventually be put forward for approval at today’s Cabinet meeting.
The government is sitting on pins and needles, as the meeting between President Christodoulides and the Prime Minister of Greece on Thursday has already been announced, with the cable issue high on the agenda. Without a Cabinet decision by Thursday, President Christodoulides will find himself in a difficult position, and this won’t be the first time.
We are informed, however, that the possibility of a proposal related to the electrical interconnection going to the Cabinet today but not being complete should not be ruled out.
There is a likelihood that the government will have to resort to compartmentalising the issue, approving today some of IPTO’S requests for changes to CERA’s regulatory decisions and leaving other matters that are still under consultation with the Greek side for a later session.
Philenews information indicates that the two main requests of IPTO (the start of recovery by the implementing body of expenses for the project from 2025 (a total of 125 million until December ’29, with state funds) and the extension of the concession of a capital return rate (8.3%) to 17 years, from the current 12 years) have been locked in and could be approved today by the Cabinet.
The same apparently applies to the decision of the Greek government to accept the assumption by consumers in both countries of 50-50 of the potential cost of an emergency incident that would disrupt the project.
Hesitation over shares
What some philenews sources say is not yet clear is to what extent the decision to be taken by the Cabinet, today or another day, will include a binding decision for the participation of the Republic of Cyprus in the investment of the electrical interconnection, with an amount of 100 million.
IPTO is requesting the adoption of this decision at this stage, as it believes that with it, it will be able to move more effectively in the search for investors and lenders, with priority given to securing a loan of approximately 500 million from the EIB (EIB).
The government insists on its position that it wishes to purchase equity capital in the Great Sea Interconnector, but states that it is not ready to take and implement this decision now.
On the one hand, the Presidency does not wish to give the opposition and public opinion a handle to accuse it of breaking its political commitment to secure an evaluation from a foreign agency regarding the cost-benefit analysis submitted by IPTO before it itself decides to invest in the cable. Moreover, it is also the position of the relevant ministers that the evaluation study is necessary.
On the other hand, the legal and institutional procedures that will need to be promoted in order for the decision to purchase approximately 30% of the shares of GSI to be implemented are estimated to require a significant amount of time.
It is not clear whether IPTO expects a binding decision on Cyprus’s participation in GSI at this stage, with a willingness to wait a few weeks or even months for its implementation.
Some sources from Greece noted yesterday that the Cypriot government could include in the decision it might take today a clearer position in favour of its participation in the equity structure of the implementing body, compared to the one it took in February ’24.
However, it is not known whether such a move would satisfy IPTO, which appears to be having issues with Nexans regarding the construction of the cable.
The French company is urgently requesting the decisions expected from the Cabinet and appears determined to terminate the contract with IPTO if all matters are not definitively closed within 3-4 weeks.
Until then, it will overcharge the Greek organisation with approximately 30 million, as relevant sources from Greece insist.
