The government has postponed ratification of a preliminary agreement for the Greece-Cyprus electricity interconnector project, citing the need for further assessment of consumer benefits and financial risks.
The Cabinet meeting, initially scheduled for Wednesday morning, was delayed and ultimately did not address the interconnector project. Government spokesperson Konstantinos Letymbiotis announced that additional clarifications had been requested.
“What should be taken into account is the benefit for the Cypriot consumer, the benefit for the electricity bill of each one of us,” Letymbiotis said. He added that a responsible decision would be made once answers to the requested clarifications are received.
Sources indicate that the government is conducting an expedited reassessment of the project’s benefits, considering recent communications with the European Investment Bank regarding IPTO’s request for project financing.
The delay raises concerns about the project’s future, as IPTO, the Greek Independent Power Transmission Operator, has reportedly set a Friday deadline for resolution.
At issue is the regulatory framework, particularly whether consumers will be charged from January 2025 or if the state will cover €125 million of expenses until 2029.
Sources suggest the government is hesitant about potential financial risks, especially in the event of project disruption due to geopolitical factors. IPTO reportedly wants the Cypriot and Greek governments to bear this risk.
The postponement puts at risk a €657 million EU grant for the project. Any attempt to renegotiate the regulatory decision could jeopardise the entire initiative, according to sources.
A new Cabinet meeting is scheduled for Thursday morning, where a decision may be reached based on the requested clarifications.
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