Cyprus is considering a significant investment in the EuroAsia Interconnector, a project that aims to connect the electrical grids of Cyprus, Greece, and Israel via a subsea cable. The Cypriot government may invest €100 million to co-own a new company managing the Cyprus-Crete segment, contributing to regional energy security and sustainability.
What is the EuroAsia Interconnector and Cyprus’ role in it?
The EuroAsia Interconnector is a strategic energy project aiming to connect Cyprus, Greece, and Israel’s electrical grids via a subsea cable. Cyprus is considering a significant investment to end its energy isolation and integrate into the European energy network. The Cypriot government may invest €100 million to co-own a new company managing the Cyprus-Crete segment, contributing to regional energy security and sustainability.
A Pivotal Energy Project
Cyprus is actively considering a strategic investment in a significant energy infrastructure project known as the EuroAsia Interconnector. This ambitious initiative aims to connect the electrical grids of Cyprus, Greece, and Israel through a subsea cable, effectively ending Cyprus’ energy isolation. The project promises to usher in a new era of energy security and sustainability for the island nation. The current focus is on the segment connecting Cyprus to Crete, representing a crucial step towards integrating Cyprus into the broader European energy network.
George Papanastasiou, the Energy Minister of Cyprus, has indicated that a decision regarding the country’s direct investment will be made by the end of January. The discussions follow productive talks with representatives from Greece’s Independent Power Transmission Operator, known as Admie, which is now spearheading the project after taking over from the original promoter, EuroAsia Interconnector Ltd.
Assessing Viability and Geo-Political Dynamics
The Cypriot government is in possession of a draft report from a foreign consultancy, which has been assessing the project’s financial and geo-political viability. Papanastasiou shared that the preliminary findings are positive, signaling potential green light for Cyprus’ involvement. If the government opts to invest, it would acquire a direct stake in a new holding company that is set to be established. The investment could be as substantial as €100 million, suggesting that Cyprus and Admie could jointly hold a majority in the new venture.
Furthermore, the project has undergone a rebranding, now known as the Great Sea Interconnector, which adds to its commercial appeal and distinct identity.
Financing the Connection
Addressing financial concerns, the minister commented on previous reports of a €1 billion financing gap under the management of EuroAsia Interconnector Ltd. The overall cost for the Cyprus-Crete segment is estimated at €1.9 billion. With an €800 million grant from the European Union, coupled with the prospective €100 million from Cyprus, the project would still require an additional €1 billion. This sum is expected to be sourced from Admie and various investment funds that have shown interest in the venture. The optimism from the Cypriot side suggests that financing the remainder will not pose a significant challenge.
A Leap Towards a Greener Future
The transition to the operational phase of the EuroAsia Interconnector is eagerly anticipated, as it will mark the beginning of a more affordable, cleaner energy landscape for Cyprus. Admie’s CEO, Manousos Manousakis, expressed his eagerness for Cyprus’ participation and highlighted the long-term benefits of the project. The construction of the Cyprus-Crete link is planned to start the following year and is expected to take around four to five years to complete, with Siemens poised to construct the necessary voltage converter stations.
The project’s extension towards Israel, while still in consideration, awaits further maturity and regulatory consensus between the two nations to ensure it’s financially beneficial.
Strategic Partnerships and European Support
The project enjoys broad support, with Greece’s Admie holding a 51% state ownership. Strategic partnerships have also been established, such as the State Grid Corporation of China’s 24% stake in Admie. In January 2022, the European Commission reinforced its commitment to the project by approving a €657 million grant under the Connecting Europe Facility (CEF), in addition to a separate €100 million grant sourced from the Cyprus Recovery and Resilience Plan, part of the EU Recovery and Resilience Facility (RRF).
The EuroAsia Interconnector stands as a testament to regional cooperation and reflects the European Union’s commitment to bolstering energy infrastructure that supports sustainability and security. As Cyprus moves towards making a decisive investment, the project is set to become a cornerstone of the Eastern Mediterranean’s energy strategy.
What is the EuroAsia Interconnector and Cyprus’ role in it?
The EuroAsia Interconnector is a strategic energy project aiming to connect Cyprus, Greece, and Israel’s electrical grids via a subsea cable. Cyprus is considering a significant investment to end its energy isolation and integrate into the European energy network. The Cypriot government may invest €100 million to co-own a new company managing the Cyprus-Crete segment, contributing to regional energy security and sustainability.
What is the current status of Cyprus’ investment in the EuroAsia Interconnector?
Cyprus is actively considering a strategic investment in the EuroAsia Interconnector. The Energy Minister of Cyprus has indicated that a decision regarding the country’s direct investment will be made by the end of January. Discussions have been held with Greece’s Independent Power Transmission Operator (Admie), which is now leading the project. If the investment is approved, Cyprus would acquire a direct stake in a new holding company.
How will the EuroAsia Interconnector be financed?
The estimated cost for the Cyprus-Crete segment of the EuroAsia Interconnector is €1.9 billion. The European Union has granted €800 million for the project, and the Cypriot government may invest €100 million. The remaining €1 billion is expected to be financed by Admie and various investment funds. The Cypriot government is optimistic about securing the necessary funding.
What are the expected benefits of the EuroAsia Interconnector for Cyprus?
The EuroAsia Interconnector will end Cyprus’ energy isolation and integrate it into the European energy network. It will provide a more affordable and cleaner energy landscape for the country. The construction of the Cyprus-Crete link is planned to start the following year and is expected to take around four to five years to complete. The project is seen as a leap towards a greener future and will contribute to regional energy security and sustainability.
