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EU Commission’s Stance Threatens Great Sea Interconnector Project

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The future of the Great Sea Interconnector project, connecting Cyprus and Greece’s electrical grids, is in jeopardy as Cyprus refuses to impose a consumer levy to recover costs and faces the potential withdrawal of a €657 million EU subsidy. Without this crucial funding, the €1.9 billion project may not proceed, casting uncertainty over this ambitious energy endeavor.

What is the future of the Great Sea Interconnector project?

The Great Sea Interconnector, aimed at linking Cyprus and Greece’s electrical grids, faces an uncertain future due to potential withdrawal of a €657 million EU subsidy and Cyprus’ refusal to impose a consumer levy to recover costs. Without the EU’s contribution, the €1.9 billion project may not proceed.

Uncertain Future for an Ambitious Energy Plan

The Great Sea Interconnector, an ambitious project designed to link the electrical grids of Cyprus and Greece, faces an uncertain future. Energy Minister George Papanastasiou expressed serious concerns about the potential withdrawal of a substantial €657 million EU subsidy. This potential financial setback comes after Cyprus’ Energy Regulatory Authority (Cera) rejected a set of proposals, including a €0.6 cents levy on consumers’ electricity bills. This decision could mean the end of the road for the project, as the levy was intended to help recover the €1.9 billion construction costs.

Greek authorities have signaled the project’s non-viability according to Greece’s Independent Power Transmission Operator (Admie), while stakeholders have voiced their worries, labeling the investment as one at risk of sinking. With Cyprus’ reluctance to impose the additional consumer levy and Admie’s claim that no investor would take part under the present conditions, the project’s feasibility is increasingly in doubt.

A Political and Financial Tightrope

Energy Minister Papanastasiou underscored the political ramifications of the situation, citing the inevitability of a Greek governmental response. The project’s financial structure has been shaken by Cera, which has not only turned down the electricity levy but has also rejected other proposals linked to the project. These include changes in the methodology for calculating the return on capital, additional financial guarantees, and a reduction in the project’s operational lifespan from 35 to 25 years.

Admie’s CEO, Manousos Manousakis, has defended the project’s financial solidity and its ability to lower electricity costs for Cypriot consumers from the first year of operation. However, the regulatory decision casts a shadow over investors’ confidence, leading to a statement by Manousakis that under the current circumstances, attracting shareholders would be impossible.

The Role of the European Commission

Much of the project’s fate now hangs on the European Commission’s decision. The EU’s contribution of €657 million is pivotal. Without it, according to Papanastasiou, the project cannot proceed. The minister’s planned discussion with the Commission is a crucial step in determining the future of this transnational energy initiative.

The controversy has prompted Admie to consider providing Cera with additional documentation, hoping to alter the regulatory body’s stance. Papanastasiou has indicated that while Cera’s decision stands for now, it may be open to revision if Admie can substantiate its case beyond simple viability claims.

The Interplay of Regional Powers

The developments have led to a complex interplay between Cyprus and Greece, with both nations having significant stakes in the project. While the Cypriot government has requested clarifications from Greek energy officials, Papanastasiou has emphasized that these communications are not intended as pressure but rather as a means to seek transparency and understanding.

The outcome of these multi-layered discussions, both within and between the involved parties, is eagerly awaited. With significant political, financial, and energy implications, the future of the Great Sea Interconnector remains on a knife-edge, awaiting decisive action from regulatory authorities and the European Commission.

What is the future of the Great Sea Interconnector project?

The Great Sea Interconnector project, connecting the electrical grids of Cyprus and Greece, faces an uncertain future due to the potential withdrawal of a €657 million EU subsidy and Cyprus’ refusal to impose a consumer levy to recover costs. Without this crucial funding, the €1.9 billion project may not proceed.

What is the role of the European Commission in the Great Sea Interconnector project?

The European Commission’s decision is pivotal in determining the fate of the Great Sea Interconnector project. The EU’s contribution of €657 million is essential for the project to proceed. Energy Minister George Papanastasiou is planning to discuss the situation with the Commission to seek a resolution.

How are Cyprus and Greece responding to the challenges facing the Great Sea Interconnector project?

Cyprus and Greece are facing significant challenges in moving forward with the Great Sea Interconnector project. The Cypriot government has raised concerns about the potential withdrawal of the EU subsidy and has requested clarifications from Greek energy officials. Greek authorities have expressed doubts about the project’s viability under the current conditions.

What are the implications of the uncertain future of the Great Sea Interconnector project?

The uncertain future of the Great Sea Interconnector project has significant political, financial, and energy implications for both Cyprus and Greece. The project, aimed at linking the electrical grids of the two nations, is at risk of not proceeding without the EU subsidy and consumer levy. The outcome of discussions and decisions made by regulatory authorities and the European Commission will determine the fate of this ambitious energy endeavor.

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