Interconnector project will go ahead ‘if viability ensured’

The Great Sea Interconnector project will go ahead “if its financial viability is ensured”, Greek Prime Minister Kyriakos Mitsotakis said on Sunday.

Speaking at the Thessaloniki international fair, he said, “I consider it to be a very important project, and much more important for Cyprus because it essentially breaks the country’s energy isolation.”

He said his government is in negotiations with its Cypriot counterpart and other stakeholders over the matter, with his Energy Minister Theodoros Skylakakis set to visit Cyprus on Tuesday for talks.

“I can assure you that if the financial viability of the project is ensured, the project will be done and any geopolitical risks will be overcome,” he added.

Mitsotakis’ comments come hot on the heels of those made by United States ambassador in Nicosia Julie Fisher, who, while also in Thessaloniki, warned Cyprus that if it does not get the project right, “these opportunities will pass by, and Cyprus will get left behind.”

“They need that reliable sustainable electricity connection. Cyprus has a burgeoning tech industry for a lot of reasons that have to do with some of the regional dynamics. They’re not going to be able to attract that without the reliability of the electricity grid,” she said.

She added, “again, I can only stress, now is the time. Should this opportunity pass, it will be very difficult to see it come back again. And there is Cyprus, left burning mazut and working on its green transition but not there yet in terms of being able to produce what the country needs.”

Cyprus’ government was initially expected to make a decision over the regulatory framework of the leg of the Great Sea Interconnector project connecting Cyprus to Crete at a cabinet meeting on Wednesday, before first being pushed back to Thursday, and then to this coming Tuesday.

Skylakakis will be joined in Cyprus on the day by a representative from the European Commission and representatives from Greece’s independent power transmission system operator Admie, cable company Nexans for a meeting which will also be attended by two Cypriot ministers, one deputy minister, and representatives from Cyprus’ legal service.

After this meeting, an extraordinary cabinet meeting is set to convene, with a decision to be made at that meeting.

The main point of contention is Admie’s request for Cyprus to pay a total of €125 million between 2025 and 2029 – before the interconnector is operational, in effect helping finance the project and ensuring that Admie will have a stable income while investing in the project before the project itself turns a profit.

In the end, a solution to the matter had reportedly been reached, with the Cypriot government set to utilise funds made available to it through the European Union’s emissions trading system (ETS) to pay the required €125m.

Admie had reportedly initially driven a hard bargain on the matter but, faced with the spectre of the project’s collapse and the possibility of being liable for tens of millions of euros to Nexans, which had already been commissioned to start the project, they reportedly eventually backed down.

The matter of “geopolitical risk”, as mentioned by Mitsotakis on Sunday, is taking increasing precedence in discussions, with fears growing regarding the region’s potential geopolitical volatility.

The issue of “geopolitical risk” relates to possible interference with the laying of the cable by Turkish warships in the Aegean. Admie had sought reassurances that should anything occur beyond its control which would hinder the interconnector project, including Turkish interference, it would be able to recover the investments it had made up to that point.

Skylakakis’ most notable intervention on the matter so far took place in April, when he warned Cyprus against missing deadlines and delaying decisions on the project.

He had warned that if Cyprus takes too much time pondering and not making decisions on the matter, the European Commission, which has pledged financial support for the plan under its Connecting Europe Facility, and an extra €100m pledged through the European Union’s Recovery and Resilience Facility, may lose patience and withdraw its financial support.

Speaking to Greek newspaper Imerisia, he said “the case is that we took on a serious responsibility together with the Cypriot side, after the commission had evaluated the project and had given us a huge investment in this project.”

“If this investment is lost, the chance of Cyprus being connected to the rest of Europe, and of the entire cable being realised, will be dramatically reduced.”

He added, “that is something which the Cypriot government will also have to evaluate.”

Greece, he said, “has shown a surplus of good will on this matter to help to try to not lose this project,” and emphasised again the possibility that the whole project may fall apart if Cyprus does not make a decision.

He ended by repeating that “it must be absolutely clear that if the funding from the European Commission is lost, the probability of this project ever being carried out will be reduced dramatically.”