Greece-Cyprus cable: Athens’ proposal for electrical interconnection – 2024-09-16 11:58:42

Tough negotiations that take on the dimensions of a political-economic thriller with wider geopolitical ramifications are underway between Greece and Cyprus for the “Great Sea Interconnector” project, worth €1.9 billion (657 million is the Commission’s contribution), which concerns the electric Greece – Cyprus – Israel cable that will pave the way for the interconnection of the three countries.

The Cypriot side should put all aspects of the project under the microscope, asking for guarantees and securities for the total cost of the interconnection until the last moment. It is recalled that at last Tuesday’s meeting in Nicosia, it was agreed to continue the negotiations, without any white smoke coming out.

Cyprus aims, in the bra de fer that is taking place with the Greek side, to ensure that it will neither need to pay additional funds along the way, nor that Cypriot consumers will lose money if the project eventually collapses.

The new proposal

In the negotiations taking place these days, the Cypriot side, according to information, committed to participate with 100 million euros in the share capital of the Great Sea Interconnector, while the Greek side insisted on sharing the geopolitical risk equally (50-50) between the two countries and not in the proportion of 37% Greece – 63% Cyprus that was foreseen in the original agreement for the project.

Government sources say that a new text of the agreement has been sent to Cyprus to go through the cabinet’s approval.

The Cypriot government is scrutinizing the cost-benefit data of the Crete electrical interconnection project, hesitating for the moment to give the green light that will…untangle the cable with the landscape expected to finally unravel at the highest political level next week the Cypriot president in Athens.

Christodoulidis is a “diplomat”.

“There is progress in terms of the discussions on the issue of electrical interconnection”, the President of Cyprus, Nikos Christodoulidis, said yesterday, speaking to journalists.

Asked to comment on party criticism that the government is not making decisions in relation to the electricity interconnection, he said “it is quite fitting that, some people are thinking about the next election, we, as a government, are thinking about the next generations.

In Athens September 19

“I see these strong positions, I am not referring now to the parties, (some are) very in favor, (some) very against. I wonder where all this comes from. Anyway, they don’t concern me at all. Our discussions are progressing positively. We are working on specific aspects. There is progress and we will make our final decisions based on one single factor: to serve the interests of the Cypriot people”, he stressed.

“We are talking about a big project that concerns future generations, something that interests us, so our decisions will be prudent, they will take into account all the facts. Whatever some say about delay, or that we are not making decisions, we are interested in future generations, not the next election. Let me tell you, in fact, that on September 19 I will be in Athens, I will see the Greek Prime Minister, one of the main issues is this particular one, we are in daily contact, and yesterday and the day before, about this issue”, he pointed out.

Israel

It was preceded yesterday by a meaningful intervention by Israel’s energy minister, while the American factor that is pushing for the project to proceed should not be overlooked.

Israel’s Minister of Energy and Infrastructure Eli Cohen had a telephone conversation with the Minister of Energy, Trade and Industry of the Republic of Cyprus regarding electrical interconnection.

“We underlined the strong relationship and ongoing cooperation between Israel and Cyprus and I emphasized the great importance of the Great Sea Interconnector project for Israel. The project will connect Israel’s electricity grid to the European grid via Cyprus and Greece and will strengthen energy security in the region. This ground-breaking project is a top priority for Israel, as it strengthens regional energy security, provides access to various energy markets and enhances Israel’s integration into the European energy network,” the Israeli minister wrote in a social media post after the contact. .

Significant benefits for Cypriot consumers

From the floor of the 88th TIF, Kyriakos Mitsotakis set the tone of government policy by stating that “the project will be done if economic viability is ensured and any geopolitical risks are overcome”, implying that the geopolitical risk can be examined in a second year.

The cable has significant profits for Cypriot consumers, claims Thodoros Skylakakis

In fact, as recently stated by the Minister of Energy Theodoros Skylakakis, in the opinion of the Greek government, “the project does not face any issue of economic feasibility, in terms of the benefits it provides, above all to Cypriot consumers”.

As he pointed out, based on the data of the ADMIE study and the publicly available data on the operation of the two electricity markets Greece – Cyprus, the price differences are so great (in 2024 the Cypriot market is more expensive by 72 euros/megawatt hour than the Greek) so that “in all possibly realistic scenarios the cable has significant profits for Cypriot consumers”.

Cost keeps the cable tangled

The Cypriot side, however, is not proceeding with the settlement of the pending regulatory issues – they are connected to the geopolitical risk that can affect the implementation of the project and the time to recover the costs – which are a prerequisite in order not to suspend the construction of the cable by the French company Nexans .

However, the biggest “thorn” that creates friction in the Greece-Cyprus negotiations for the “Great Sea Interconnector” project seems to be the cost and how it will be shared between the two sides and less the geopolitical risk.

Source: ot.gr