On Monday, a crucial step is anticipated in finalising the regulatory framework for the electricity interconnection project between Cyprus and Greece, as requested by the new implementing agency, ADMIE (Independent Power Transmission Operator), for several months.
Regulatory authorities from both Cyprus and Greece have reportedly made significant preparatory work and are expected to sign agreements on the new cross-border cost-sharing arrangement. This will clarify that, in the event of extraordinary incidents for which the implementing agency or its contractor partners bear no responsibility, 50% of the costs incurred will be paid by consumers in Cyprus and Greece.
However, following the approval of a bill by the Greek Parliament last Thursday, Greek consumers will now be liable for 37% of the project costs in such scenarios, with the remaining 13% covered by the Greek state budget.
Although there has been no official announcement, reports in the Greek press suggest that the contentious term “may” will be removed from the Cost-Benefit Calculation Agreement (CBCA). ADMIE had raised concerns about geopolitical risks associated with this language and requested its removal, ensuring that if the project is disrupted or fails due to external factors, financial losses will not be attributed to them. This request has been effectively accepted in the intergovernmental agreement between Cyprus and Greece and is set to be formalised tomorrow: ADMIE (or the Great Sea Interconnector, which ADMIE will soon transfer the project to) will not be held liable for damages arising from potential project failures if responsibility lies with third parties.
Sources indicate that the Cypriot and Greek regulatory authorities have been in continuous communication in recent days, and it is highly likely that everything will be finalised tomorrow with the amendment of the CBCA.
Despite previous warnings from ADMIE about deadlines imposed by Nexans expiring in August and various points in September, it has now been officially disclosed that the deadline for Nexans to receive the final binding order from ADMIE for the cable construction is set for tomorrow, September 30.
It remains to be seen whether ADMIE will announce the granting of the Full Notice to Proceed to Nexans, allowing construction to commence. Regulatory authorities have already approved a significant portion of the recoverable expenses requested by the implementing agency for works carried out in 2023-2024, as well as costs expected in 2025.
A total of €572 million has been approved, which will be gradually recouped from consumers in Greece (37%) and the Cypriot state over five years (with €25 million annually from 2025 to 2029). The remaining amount pertaining to Cyprus will be paid when the cable begins operations.
The next step anticipated from ADMIE is the submission of an application to grant the project to the Great Sea Interconnector. Currently, the GSI is wholly owned by ADMIE, and by the end of 2024, the Republic of Cyprus is expected to announce whether it will purchase equity in GSI.
