Cyprus has pledged to participate as a shareholder in the Great Sea Interconnector (GSI) project, following a meeting between the Greek and Cypriot leaders on Wednesday.
The Cypriot presidency said President Nikos Christodoulides confirmed the political commitment to the project to Greek Prime Minister Kyriakos Mitsotakis. The presidency will establish a special purpose company to hold the shares, subject to due diligence.
Various sources indicated that the Prime Minister of Greece and the Greek side accepted the political commitment to purchase shares in the GSI and did not insist on any other form of proof from Cyprus.
The subsequent release of the Presidency’s statement, outlining the political commitment of the President of the Republic, was likely agreed upon during the meeting between the two leaders.
In the case that it is confirmed in the coming days that the matter of a few months for an extension requested by the Cypriot government to finalise its investment participation in the Great Sea Interconnector has indeed been removed, the remaining tasks are the amendment of the regulatory decision by CERA (Cyprus Energy Regulatory Authority) based on the Cabinet’s decision last Tuesday, and the modification of the cross-border cost allocation (CBCA).
As philenews reported yesterday, CERA will make the much-anticipated decision today, in coordination with the energy regulatory authority of Greece.
CERA’s decision concerns two changes that the regulator has already agreed upon during previous teleconferences with the Greek regulatory authority, the Greek Ministry of Energy, the European Commission, and IPTO (Independent Power Transmission Operator):
1. The commencement of revenue allocation to the implementing entity (Great Sea Interconnector) to cover its expenses during the construction phase of the project.
The decision will involve a small charge per kilowatt/hour for consumers in Cyprus, which will be simultaneously refunded to electricity consumers through a state subsidy on their electricity bills.
This is an integration of the decision taken by the Cabinet last Tuesday into the regulatory framework, providing funding of €25 million per year (a total of €125 million for the period 2025-2029) to the implementing entity for its construction costs.
Legally, a supplementary budget will need to be submitted to and approved by Parliament to allow for the funding of IPTO.
2. The regulatory decision will also be amended today to extend the period of the increased capital return rate (premium WACC) to 17 years instead of the current 12 years.
Cost allocation remains pending.
As reported by philenews yesterday, there is no information regarding further modifications to the regulatory framework (specifically, the cross-border cost allocation – CBCA) during today’s CERA session.
Additionally, there is no update on whether the CBCA will be amended to incorporate the Cypriot side’s request for a 50-50 cost allocation between consumers of the two countries for any additional costs exceeding €1.94 billion, in the event of such an exceedance.
Procedurally – following the discussions held over the past few weeks, either in person or during teleconferences – CERA and RAAEY in Greece have agreed to make all the changes that will be included in the decisions and agreements of the two governments.
