Filenews 23 July 2023 - by Chrysanthos Manoli
Phileleftheros reports that the decision of the two regulators will be positive in relation to the request submitted on July 6 by the private implementing body, asking to accept the increase of the estimated total cost of the interconnection to €1.94 billion from €1.57 billion which was locked down by regulators in 2017.
The acceptance by CERA and RAE of the new budget implies their agreement to recover this amount from EuroAsia Interconnector, through the fee it will impose for the use of its cable by electricity producers and consumers.
The new budget
According to the company's new budget, the individual costs - as currently calculated - for the interconnection between Cyprus and Crete are the following:
– Construction, supply and installation of the voltage converter station, cost €374.8 million, up from €230 million originally budgeted.
– Supply and installation of submarine cables for a capacity of 1,000 megawatts, costing €1,411.7 million from €1,165 million originally calculated.
– Other expenditure on land-based infrastructure projects, up from €152.7 million, to €180 million.
– Total cost, €1,939.2 million instead of €1.575 million provided for in the 2017 regulatory decision.
Financing
The approval of the revised budget by regulators is a new step by EuroAsia Interconnector towards the construction of the project, although the picture of outstanding financing needs is far from clear. The company has not denied that it applied for a low-interest loan from the European Investment Bank of almost EUR 600 000 million. So far, it has not received a positive response. As Phileleftheros wrote on Thursday, the EIB reportedly views the request with many reservations. The company says there are private entities willing to invest in the interconnection and assures that there will be no funding problem.
Is the Government studying it?
In the last 48 hours there has been no public intervention by a government official in Cyprus on the interconnection issue. It follows the signing, on Tuesday, of the agreement with Nexans Norway for the contract for the construction and laying of the electrical cables. The terms of the agreement regarding advances and payment of the contract were not officially known.
The energy minister had said on Wednesday that in the next short period the viability of the project will be examined as a priority, in cooperation with the European Investment Bank. This analysis will show whether it will be appropriate for the state to financially support the private body in some way. The issue is also being followed with interest by the Audit Office, in case there will eventually be some kind of contribution from the state.
