Filenews 1 July 2025 -by Chrysanthos Manoli
IPTO has entered a new cycle of pressure and blackmail against the Republic of Cyprus and CERA, as the implementing body for the electricity interconnection between Cyprus and Crete, with the tolerance or cooperation of the Greek Government.
In an increasingly pressing way, IPTO demands that CERA approve here and now the recovery of expenses that it has made in 2023 and '24 for the cable, otherwise it warns that it will interrupt the project.
There is no official information on the amount that IPTO claims from CERA and Cypriot consumers. The information from the Cypriot side states that the maximum amount that could be given to IPTO for 2025 is €25 million. In the context of the agreement made last year by the governments of Cyprus and Greece, which provides for Cyprus to pay €25 million per year, for a period of five years, regardless of the amount of expenditure that IPTO will incur until the completion of the interconnection.
All other expenses of IPTO that will be attributable to the Cypriot side, will be given gradually through the electricity bills (along with the return on capital, approximately 8.2%) after the start of operation of the project.
When the two governments reached an agreement, it was officially reported by the Cypriot government that the first tranche of €25 million would be given in January 2026. This seems to be the main source of reaction from IPTO, which is claiming this amount now and not in January, arguing -well- that there is no written agreement for the payment of the first instalment in January '26.
On the part of the Hellenic Regulatory Authority (RAAEF), a decision has been taken to start from July this year the recovery of IPTO's approved expenses for consumers in Greece.
Even if the Cypriot government gives in to IPTO's pressure and agrees to pay the €25 million in the coming weeks, it is doubtful whether this money is capable of getting IPTO out of the difficult position in which it has placed itself and the Greek state, as it is the Electricity Transmission Operator and any economic adventure will critically affect the interests of the Greek state.
On the one hand, IPTO sends the message that it cannot continue to pay Nexans with its own funds for the construction of the cable and on the other hand, it has consented - through the intergovernmental agreement - that Cyprus will not pay IPTO all its expenses during the construction of the interconnection, except for the €25 million per year, with a maximum amount for the five-year period of €125 million.
IPTO's contract with Nexans only for the construction and laying of the cable on the seabed is worth €1.4 billion. It is clear that neither the money that will be given to the implementing body by the Republic of Cyprus, nor the money that will be recovered through the electricity bills in Greece are capable of ensuring that IPTO will complete the project without spending any more equity. He already says that he has spent €120 million but he insists on not informing how much of it came from the European sponsorship of €658 million.
IPTO maintains that as soon as the recovery of its expenses from the Cypriot side begins (given that RAAEF has already agreed to charge consumers in Greece and pay the implementing body) it will turn to lenders with greater persuasion, in order to secure the money needed to finance the project.
What neither IPTO nor the Greek Government have given a convincing answer to is how to convince the lenders to finance a project that – with the exception of the prepaid construction of the cable – is not progressing, due to Turkish objections. Does IPTO believe that its potential creditors (e.g. National Bank) do not know that the largest amount that will be allocated to Cyprus will be paid gradually after the start of operation of the project? That is, under the condition of the start of operation?
In fact, if IPTO somehow manages to secure loans of hundreds of millions of euros, the risks of a huge economic and political fiasco become much greater for the Cypriot government, but also for the Greek government, even if the latter does not appear to be worried. If IPTO is allowed to proceed with loans without ensuring the settlement of the huge geopolitical issue, consumers in Cyprus and Greece are likely to find themselves in danger of paying a large part of the almost €2 billion it was estimated 3 years ago that the project will cost, without enjoying any benefits of the interconnection.
Is the Commission resuming pressure?
As newmoney.gr website wrote yesterday, the European Commission has come back to the fore, which has not said a word for months about the obstacles that Turkey poses to the completion of marine research in international waters, part of which it considers its own continental shelf.
Most likely, the Commission intends to resume, from where it left off in 2024, the unbearable pressure on CERA and the Ministry of Energy of Cyprus, to finance now the recovery of expenses from IPTO.
According to newmoney.gr, a video conference will be held in the coming days between the two regulatory authorities, IPTO and the European Commission, with the main topic being the start of payments from Cyprus.
Although there are no longer a few chances that the Cypriot Government will agree to transfer a significant part of the €25 million to IPTO now that he planned to give in January '26, the possibility of paying larger amounts than the €25 million seems completely unlikely, because of the uproar it would cause to public opinion and political forces.
Presented CBA for Cyprus – Israel
While the electricity interconnection between Cyprus and Crete is up in the air and fewer and fewer believe that a solution will be found to overcome the Turkish obstacles, IPTO is working as if nothing is happening east of Crete and is proceeding with the studies for the second phase of the project, i.e. the Cyprus-Israel interconnection.
As "F" is informed, yesterday IPTO presented to the Cypriot and Israeli sides the cost-benefit analysis (CBA) for the electricity interconnection of Cyprus with Israel.
Unofficial information says that IPTO's analysis showed that the greatest benefit of this interconnection will be obtained by Israel, which is why it calls for the sharing of construction costs (which is close to one billion euros) to be done in a ratio of 80% (Israel) and 20% (Cyprus), approximately.
The Israeli authorities did not like this analysis at all...
