Away from the spotlight, the Cypriot Government is informed, concerned and is considering ways to manage the stagnation in which the Cyprus-Crete electricity interconnection project is stuck, but mainly the risk created for the public interest by the increasing costs of the conclusion of new agreements by IPTO, even though the implementing body and both governments are not in a position to ensure, for the time being, the smooth progress of the investment, within the agreed timetables.
The issue is closely monitored by CERA and the Ministry of Energy, but the President of the Republic is also briefed on what is worrying happening.
Not advancing
According to the assurances of IPTO and Nexans, the construction of the cable by the French company continues. However, there is no information from official sources about the kilometers of cable that were constructed, about the amount of IPTO's debts -if any- to the manufacturer and about Nexans' willingness to continue constructing the cable without receiving the Full Notice to Proceed from the implementing body, its final commitment, that is, to assume responsibility for the €1.4 billion contract.
The depth surveys that should be in progress from 2024 in international waters are not being carried out and the reason is not their complexity, as Greek government officials claim, but Turkey's objections and the reluctance of the Greek Foreign Ministry to risk putting the country in confrontation with Turkey by issuing Navtex for the surveys.
As long as the depth measurements are not progressing, the works for the laying of the cable cannot proceed either, even if its construction continues, according to IPTO.
In recent days, the CEO and Chairman of IPTO, Manos Manousakis, made statements, stating that IPTO has so far paid 250 million euros. Without taking "not even a painted euro" as a recovery of expenses. He is asking to be paid for his expenses by the regulatory authorities of Cyprus and Greece, in order to convince banks to lend him a few hundred million euros and to proceed with the payments of Nexans and the agreement with Siemens for the construction of voltage conversion stations in Kofinou and Korakia, Crete.
Mr. Manousakis said, among other things: "When IPTO approaches banking institutions to secure loans, lenders ask for documents that show that there is a recovery of revenue," adding that in order for the project to proceed, IPTO must be able to obtain a loan.
To proceed or not?
The Cypriot Government is concerned about the following: Is it wise for IPTO to proceed with such a large loan, without being sure that it can complete the project?
The €250 million that IPTO declares that it has spent so far can be covered (what has not already been paid through the European sponsorship of 658 million) by CERA and RAAEF, but at a different time. The Cypriot side has committed to pay €25 million every year (with the beginning in 2026), until €125 million are completed. The rest will be paid gradually, if and when the interconnection is operational.
RAAEY, however, has committed to pay all justified expenses of IPTO as the project progresses. And it will charge electricity consumers in Greece accordingly, something that is expected to start soon. Therefore, Mr. Manousakis' protests about uncollected revenues are addressed to the Greek regulator and the Greek Government.
What Cyprus and Greece are called upon to decide
What the governments of Cyprus and Greece are called upon to respond quickly is the following:
- Will IPTO be allowed to spend openly and take loans of hundreds of millions, without being able to ensure that the project will be completed, or the two governments?
- If the assurance for the completion of the project cannot be given, for the known reasons, will IPTO continue to burden consumers with costs, because it feels that according to the regulatory decisions, sooner or later the two regulators will pay for it, even if the interconnection does not take place?
