An end to the ongoing thriller for the implementation of the major project of the electrical interconnection between Greece and Cyprus was put to an end with the signing of the Athens-Lekosia interstate agreement that closes the open issues. 

Specifically, the project was cleared with the signing of an interstate agreement between Greece and Cyprus by the Energy Ministers of the two countries, Theodoros Skylakakis and George Papanastasiou. 

STRATEGIC IMPORTANCE PROJECT

As stated in the Framework of Understanding, the Cyprus-Crete Electricity Interconnection will contribute to the removal of Cyprus' energy isolation by interconnecting Cyprus' national electricity transmission system with the corresponding trans-European systems. This is a project of strategic importance for Cyprus, Greece and the EU as a whole, as it will not only connect Cyprus to the European electricity system, facilitating its energy transition, but will also promote Greece's objective of becoming a clean energy corridor.

PROVISIONS

As well-informed sources note, the signing of the agreement also ends any investment and regulatory uncertainty for the project.  In detail, the entry of the Republic of Cyprus in the shareholding composition of the project's implementing entity is finally clarified, following the completion of due diligence, as well as the 50%–50% sharing of the geopolitical risk, as requested by the Greek side. On this particular issue, ratification by the Parliament is expected in the next period.  In addition, the Cyprus Regulatory Authority (RAEK) has already decided to amend the revenue methodology, which foresees the recovery of €125 million in revenue over the construction period of the project in the years 2025–2029 and the extension of the WACC to 8.3% for 17 years from 12 years as foreseen in the original decision. All that remains is the decision to start revenue recovery from 2025. This will also allow Nexans to restart the construction of the cable.  

FRANCE

The possibility of French participation in the project was discussed, among other things, on Saturday in a telephone conversation between the President of the Republic of Cyprus, Nicos Christodoulides, and the President of France, Emmanuel Macron, with the two leaders agreeing to a joint Cyprus-France-Greece meeting in New York. According to a written statement by the Government Spokesman, Constantinos Letibiotis, during their communication, the two leaders discussed the Cyprus-Greece Electric Interconnection (GSI) project in the context of the participation of a French-owned company. In this context, it was also agreed that President Christodoulides, Greek Prime Minister Kyriakos Mitsotakis, and President Macron will hold a joint meeting in New York next week in the framework of the United Nations General Assembly.