Filenews 20 September 2024 - by Chrysanthos Manoli
This time there was no information, even off the record, even in the Greek media and very little was known about the outcome of yesterday's meeting between the Prime Minister of Greece and the President of Cyprus, with the electricity interconnection between Cyprus and Crete high on the agenda.
The most important information, however, was officially given by the Presidency of the Republic of Cyprus and concerned the issue that is considered to be the most important pending issue: The participation of Cyprus, through a state company or organization, in the share capital of the Great Sea Interconnector, with approximately 30% of the shares.
According to a Presidency announcement, Nikos Christodoulides "confirmed to Kyriakos Mitsotakis the political commitment of the Republic of Cyprus to participate in the share capital of the project as soon as possible and after the completion of the due diligence study and the establishment of a special purpose vehicle, for which advanced consultations with third countries are ongoing."
The impression was given yesterday by various sources that the Prime Minister of Greece and the Greek side in general accepted the political commitment to buy a share capital in the GSI and did not insist on another ... proof on the part of Cyprus. The issuance, immediately afterwards, of the Presidency's announcement, with a clear record of the political commitment of the President of the Republic, was apparently agreed during the meeting of the two leaders.
If it is confirmed in the coming days that the thorn in the side of the extension of a few months requested by the Cypriot Government for the finalization of its investment participation in the Great Sea Interconnector has indeed been removed, it remains to amend CERA's regulatory decision, based on the decision of the Council of Ministers last Tuesday, as well as the amendment of the cross-border cost allocation (CBCA).
As Filenews reported, CERA will take today the long-awaited – by ADMIE – decision, in consultation with the Greek Energy Regulatory Authority.
The decision that CERA will take today concerns two changes, for which the regulator has already agreed, in the context of previous teleconferences with the Greek regulator, the Greek Ministry of Energy, the Commission and IPTO:
1. The commencement of a concession to the implementing body (Great Sea Interconnector) of revenues, to cover its expenses during the construction stage of the project. The decision will provide for consumers in Cyprus to be charged a very small amount per kilowatt hour, which will be reimbursed at the same time to electricity consumers through a state subsidy on electricity bills. This is an incorporation into the regulatory framework of the decision taken last Tuesday by the Minister, to finance the implementing body with €25 million per year (a total of €125 million in the period 2025-2029), against its reasonable construction costs. Legally, the submission to Parliament and approval of a supplementary budget will be required at a later stage, in order to allow the financing of IPTO.
2. The regulatory decision will also change today for the extension of the concession of an increased (preferred) rate of return on capital (premium WACC) for a period of 17 years and not 12 as provided for in the current decision.
Apportionment still pending
As Filenews reported yesterday, there is no information on other amendments today to the regulatory framework (specifically, the cross-border cost allocation – CBCA) during CERA's meeting.
We remind you that it was duly stated that the Greek Government has accepted to share 50% between the two sides any cost from any interruption or non-operation of the interconnection for reasons that will not be the responsibility of the implementing body. However, it is not known when and by what procedure this decision will be incorporated into the regulatory framework.
In addition, there is no information on whether or not the CBCA will be amended to incorporate the Cypriot side's request to share 50-50 with the consumers of the two countries the additional costs beyond €1.94 billion, in case it is exceeded.
Procedurally – following what has been discussed lately in person or in teleconferences – CERA and RAAEY in Greece have accepted to make all the changes that will be included in decisions-agreements of the two governments.
