Filenews 18 May 2025 - by Chrysanthos Manoli
IPTO was telling us something else about the way and timing of its compensation for its role as the implementing body of the Cyprus-Crete electricity interconnection and other media in Greece are writing these days that it will happen for the recovery of IPTO's expenses for the Crete-Attica cable.
The cable was completed a few months ago, it is in the testing phase, it cost about €1.1 billion. and, as the energy-specialized website energypress.gr wrote on Thursday and Friday, the recovery of expenses from IPTO for the Crete-Attica interconnection WILL begin soon... That is, after its completion and operation.
IPTO's claim regarding the Cyprus-Crete interconnection was very different, to the detriment of Cypriot and Greek electricity consumers.
What he asked CERA
For over a year, IPTO's top executives went back and forth or convened teleconferences and demanded that CERA and the Cypriot Government accept an amendment to the regulatory framework that existed for the Cyprus-Crete electricity interconnection, so that IPTO's payments (recovery of expenses) for the construction projects of the interconnection would be paid to it during the course of the works and not after their completion and operation of the cable.
CERA's position that this would violate the long-standing practice it follows regarding the recoverable costs of the Cyprus Electricity Authority (repayment through charges to electricity consumers begins after the operation of a project) stumbled upon IPTO's strong position that in Greece the recovery of expenses on the basis of the permitted revenues takes place during construction, to facilitate the financing of projects.
IPTO persevered until the end, exerting unbearable pressure, but what it gained was significant, but it was far from what it was asking for: Only a small part (in relation to the estimated total cost of the interconnection) of its costs will be paid during the pre-construction and construction period (25 million for 2025 and another as much for 2026). 2027, 2028 and 2029) and the rest of the money that CERA will deem permissible (justified) will be taken after the operation of the interconnection, in parts.
It should be noted, however, that the two regulators have already approved to IPTO the recovery of expenses of 570 million euros. For expenses that the majority of them either incurred before 2025, or will be incurred in 2025... As far as Cyprus is concerned, the expenditures of more than €125 million. They will be paid gradually after 2030, if the cable works then.
The 125 million The Cypriot government agreed to pay to IPTO until 2029 will be paid from the state budget, in five annual instalments, with the first scheduled for January 2026. This arrangement applies only to CERA. The Greek RAAEY did not reach a similar settlement with IPTO (under the responsibility of the Greek government), therefore, as the Greek media are writing these days, it is a matter of days for RAAEF to approve the start of charging consumers in Greece with a small amount per kilowatt hour (with a first charging date of 1/1/2025), for a project that fewer and fewer now believe will be carried out.
What the media in Greece wrote
On May 15, 2025, energypress.gr, which is generally well informed about decisions by IPTO and RAEY, wrote:
"According to information from energypress, RAAEF will proceed with the approval of IPTO's required revenue for 2025, thus paving the way for the start of the gradual recovery of the costs paid by the Operator for the implementation of the large interconnection between Attica and Crete. (...) According to the agreement that was signed and governs the implementation of the project, the recovery of expenses does not take place during the construction, but starts during the year of commencement of operation, starting from the 1st of the said year".
That is, the exact opposite that IPTO was saying to CERA throughout 2024, citing the... (non-existent) example of the interconnection between Crete and Attica!
Recovery for GSI also begins
Both energypress.gr and other media in Greece also write that RAAEY will very soon announce the start of charging electricity consumers in the Greek territory - retroactively from 1/1/2025 - for the recovery of IPTO's expenses for the Cyprus-Crete interconnection, although this remains on paper.
energypress.gr wrote on 16/5/25: "The start of the process to start cost recovery for the Great Sea Interconnector from January 1, 2025 has been initiated by the Energy Branch of RAAEY. In this context, the Regulatory Authority has agreed that the Operator (S.F. IPTO) will submit an application for a revision of the revenue for this year, in order to include the relevant amount for the Great Sea Interconnector, but also to activate the recovery of costs for the Crete-Attica interconnection from 2025".
The website adds: "It is reminded that the start of recovery (expenses) from the construction period (S.F. and not after operation, as is the case for Crete-Attica) is provided for by the revenue methodology for the Crete-Cyprus cable, which has been approved by the Regulatory Authority (S.F. of Greece). Therefore, given that the construction of the cable has begun, the provision of the methodology for covering the costs of IPTO (as the project implementing body) in the context of the implementation of the interconnection has also been activated. It is recalled that 37% of Greek consumers are expected to be covered (S.F. and 63% by consumers in Cyprus)".
Letter to CERA
"It is worth noting," energypress.gr states, "that, apart from the geopolitical obstacles that have arisen for the implementation of the project (ed. and were predictable from the beginning and perhaps for this reason the IPTO side demanded that its repayment begin at the construction stage), the first prerequisite for the project to be able to continue is its financial viability. In this context, according to the same information, IPTO had sent a letter to RAAE, so that the Regulatory Authority could take the decision that will "activate" the revenue inflow, for the percentage corresponding to our country.
"IPTO has also sent similar letters to CERA," the website states, "but the Cyprus Energy Regulatory Authority has not yet made a similar decision. It is recalled that 63% of the relevant amounts are to be recovered from Cyprus. Therefore, without the activation of the cash flows from Cyprus, the revenues required for the project are practically not covered. Therefore, this in fact cannot be implemented"!
In reality, however, if the project cannot really be carried out, it is because the Greek government is postponing the issuance of navtex, for the carrying out of marine surveys by an Italian company, on behalf of IPTO and Nexans. While exploration in international waters is not starting, in the absence of navtex due to concern about Turkish reactions, all that is being carried out is the partial construction of the cable by Nexans. However, this is also done with obstacles, as at some stage IPTO stopped paying. After negotiations, IPTO paid the delayed instalment and paid an advance payment, and Nexans said it would continue to build the cable until August. For September and beyond, IPTO will obviously have to pay again. Will it do so, however, if until then the stagnation in the conduct of marine surveys remains, due to the reluctance of the Greek government to issue navtex?
As for the letter that is said to have been sent to CERA in order to start the payment of IPTO, we have no official information. What is clear from the government is that not a single cent will be paid at the construction stage, except for the amounts agreed between the two governments (5x€25 million until 2029).
However, there is another trouble on the table for everyone: Delays in carrying out surveys on the seabed that separates Crete and Cyprus are costly. Nexans is said to have asked for €19 million a month or two months ago for these delays. Perhaps today this amount is higher. IPTO is now asking the Cypriot consumer to pay proportionately and has submitted a request to CERA. Unofficial information indicates that this request has not yet been answered.
