The information recently published by Fileleftheros about the decisive importance of the geopolitical risk (Turkey) that may hinder the completion of the electricity interconnection project seems to be confirmed.

What is urgent at this stage – and this is what the European Commission and IPTO are calling for – is for the two governments to assume political responsibility towards the interconnection operator that, even if the project is interrupted by Turkey's actions, IPTO will be paid all its costs.

As far as the Greek side is concerned, the regulatory authority for energy has already committed, according to reports, to approve the recovery by ADMIE of all its costs if the project is reversed for reasons for which it is proven that the implementing body will not be responsible.

And in order to give this assurance from the RAE. there was an intervention by the Mitsotakis Government, which essentially assumed responsibility for the proportional burden on consumers in Greece if the project is not completed for geopolitical or other reasons, beyond the discretion of IPTO.

Such responsibility for the time being has not been assumed by the Cypriot Government, which did not take a clear position on whether it agrees with IPTO's condition not to incur any financial burden if the interconnection is cancelled by Turkish interventions.

If the Cypriot government commits that investors should feel confident that they will not lose money for any geopolitical involvement in the interconnection issue, then de facto CERA is considered very likely to amend the relevant paragraph in its regulatory decision, removing the disputed "may" and replacing it with a clear statement that the implementing body will recover all its costs -through electricity consumers- even if the interface not populated.

However, if the government does not take responsibility for the decision to financially secure the implementing body – at the expense of consumers or from the state treasury – it is very remote that CERA will remove the "may" and incorporate a more binding reference to secure investors, as it considers that this aspect does not concern regulatory -energy- issues.

On the other hand, ADMIE and the European Commission will not accept the retention in the regulatory framework of a wording that gives CERA the discretion not to allow recovery of costs for investors in case of reversals.

New research from Italians

The dimension of geopolitical risk that may upset the plans for the electricity interconnection has recently been highlighted by several media in Greece.

Especially after Turkey's move to send warships to the Karpathos-Kasos sea area, when a few weeks ago an Italian company attempted to make soundings and measurements in a sea area where the cable for the Cyprus-Crete crossing is estimated to pass.

Indeed, yesterday, reports in Greece said that in September the Italian company will (attempt to) carry out new explorations east of Karpathos and there seems to be renewed concern about possible Turkish moves in reaction to these investigations.

Some information from Greece says that behind-the-scenes consultations have been made between the foreign ministries of Greece, Italy and Turkey, so that the investigations and measurements of the Italian ship Ievoli Relume can proceed normally, provided that there will be prior information – and apparently approval – of the Turkish authorities about the ship's movements and operations, even in areas where the Greek state does not officially recognize any right to Turkey.

Therefore, the new works of Ievoli Relume in the sea area of Karpathos may serve as another rehearsal for what may follow when the works enter a more substantial section.

On the other hand, however, the European Commission (Directorate General for Energy) and IPTO demand that CERA's decision (also) on the issue of IPTO's financial security in case of geopolitical involvement be taken within August, therefore before the new test in Karpathos.