Accra:The completion of the electricity interconnection project linking Cyprus, Greece, and Israel has been delayed to January 1, 2031. The Cyprus Energy Regulatory Authority (CERA) announced this postponement as it awaits details from Greece's Independent Power Transmission Operator (IPTO) about the French firm Meridiam's acquisition of a 66% stake in the Great Sea Interconnector (GSI) company.
According to Cyprus News Agency, CERA Chairman Polys Lemonaris informed the House Energy Committee that a letter with inquiries was sent to IPTO on August 26, 2026, but no response has been received yet. The licences for the Crete-Cyprus electricity interconnector remain under IPTO, which continues as the implementing body. Meridiam's acquisition details, including the purchase price, are still undisclosed.
CERA is reviewing the acquisition's contractual terms and its impact on the project's ownership. Lemonaris highlighted concerns over reduced control if the cable management involves foreign interests, although regulatory provisions exist for national security considerations.
The regulator is also evaluating the application for the Cyprus-Israel segment of the electricity interconnection, with a joint assessment planned alongside Israel's regulatory body. Currently, 280 kilometers of the 900-kilometer Crete-Cyprus submarine cable have been installed, with an additional 232 kilometers manufactured but not yet laid.
Approximately 40% of the required marine surveys remain incomplete and are expected to take six months. The surveys are part of a provisional capital expenditure of £571 million for 2024-2025. The project's total cost, estimated at £1.9 billion, might be insufficient based on experiences from similar projects elsewhere. Completion of marine surveys is crucial as findings might necessitate cable route changes, impacting costs.
The project's funding includes a £657 million European Union grant, the largest for an electricity interconnection project. Greece's 37% share is £440 million, while Cyprus's 63% share is £749 million. Operating expenses will be shared equally among the parties, estimated at £2 million annually until completion and £15.5 million per year once operational.
Incentives for the Crete-Cyprus section include annual payments of £25 million from 2025 to 2029, totaling up to £125 million. IPTO's 2025 expense request of £302 million saw CERA approving £82 million, contingent on documentation. CERA will consider additional payments if expenses are substantiated.
The regulatory framework addresses damage and compensation in case of project termination due to the implementing body's fault or geopolitical risks. Any changes to the cost-sharing ratio would require justification that the increase was not due to IPTO. Cyprus will not incur extra costs due to challenging seabed conditions.
The project aims to enhance regional energy connectivity among Greece, Cyprus, and Israel.