Filenews 18 July 2023 - by Chrysanthos Manoli
Faced with critical – and costly – decisions on the future of electricity interconnection
State officials have been "dancing" on hot coals in recent days in order to prevent the collapse of the crucial, as the current government estimates, objective of interconnecting the electricity systems of Cyprus and Greece.
According to Phileleftheros, last Sunday the Ministers of Finance and Energy, Makis Keravnos and George Papanastasiou, had a long meeting, during which they discussed ways to save the project, possibly through financial assistance from the state, while actively involving it in the management.
The same information indicates that time is very pressing and that very important decisions must be taken within the week.
The warnings from the European Commission are constant, firm and persistent, and there is a clear risk that the €657 million grant will be lost if the state is not directly and substantially involved in the investment of €1.94 billion. This is currently estimated to be the cost of the interconnection promoted by the private company EuroAsia Interconnector.
The ability of the company to pay significant funds in the coming days for the signing of a final agreement with the Norwegian Nexans for the construction of the Kofinou – Crete connection cables is strongly disputed by the Government, Brussels and beyond. If the contract with Nexans is not signed quickly, government sources warn, it is very likely that the Norwegians will prioritize other orders (given the huge demand and limited supply) and the European Commission will use for other more mature projects – possibly in the Baltic states – the sponsorship intended for Cyprus.
New meeting at the Presidential Palace
Phileleftheros reports that in addition to the meeting between Keravnos and Papanastasiou, feverish consultations took place at various levels last weekend. The President of the Republic is constantly kept informed, which is very likely to call a new emergency meeting at the Presidential Palace in the next few days, in order to take very important decisions on the interconnection, the role that EuroAsia Interconnector will continue to have and, of course, the role that the state may claim.
What the Government is considering with the urgency procedure is the possibility or even the need to participate in the financing of the project, directly or indirectly, perhaps with a parallel participation in the share capital of the implementing body, in order to acquire a substantial role or even the upper hand and to rapidly promote what needs to be done in the coming weeks to ensure the European sponsorship and the payment of advances for the signing of the contract with Nexans for the cables and with Siemens for the voltage converter station in Kofinou.
The Government considers the project of interconnection with the Greek network for the energy sector in Cyprus to be absolutely necessary, as it is believed to achieve security of electricity supply, greater development of RES projects domestically, with the possibility of channelling green energy to the European network and improvement of Cyprus' performance towards the green transition and the individual EU targets. The Government also feels strongly about the need to connect to Israel's electricity grid and will move actively in the coming months to reach an agreement within the technical committees set up, regardless of whether EuroAsia Interconnector has recently marginalized the goal of connecting to Israel.
Thunderbolt asked for a written proposal
Our information tells us that during the meeting with the Minister of Finance, George Papanastasiou presented the situation that has developed in relation to the interconnection, the long delays observed, the insurmountable financing problems faced by EuroAsia and the pressure exerted by the European Union - but also by the Greek Government, according to some information - for the Cypriot state to intervene to prevent its cancellation Project.
There is no confirmed information as to the exact content of the proposals submitted to Mr. Keravnos by the Minister of Energy. What became known is that the Minister of Finance requested that a detailed note be submitted to him by the Minister of Energy as soon as possible, so that the Ministry of Finance can take a position and the matter can now come under the management of the President of the Republic.
