Filenews 5 October 2025 - by Chrysanthos Manoli
The electricity interconnection project is being led from upheaval to reversal – and on very dangerous paths for the relations between Cyprus and Greece, with IPTO reacting to the delay of the Republic of Cyprus to pay the agreed first instalment of €25 million, asking CERA... Multiple!
Fileleftheros is informed that the project promoter submitted an objection to CERA against the regulatory authority's decision, dated July 31, 2024, to approve the recovery of expenses of €82 million, with the right to collect only €25 million for the period January – December 2025. It is reported that IPTO is claiming to be recognized as having the right to recover an amount of €251 million for expenses it has incurred so far, before the completion of the project.
With the objection, IPTO requests the annulment of the July decision - for which it had pressed strongly for a long period - and its replacement with another, through which the recovery of all its costs for the cable will be approved, as they will be made and justified through CERA with invoices.
In essence, IPTO is attempting to overturn the Framework Agreement signed by the governments of Cyprus and Greece in July 2024, which provides that Cyprus will not pay at the stage of construction of the project all the costs incurred (which Greece will do), but only €25 million per year, for the period 2025-2029. All remaining costs will be paid gradually by electricity consumers in Cyprus (with a ratio of 63-37%), after the operation of the electrical interconnection.
The main thing, however, is that the implementing body questions and attempts to overturn the regulatory framework approved by CERA and RAAEY in July '24, after first incorporating into this Framework Agreement of the governments for the €125 million until 2029 on the part of Cyprus.
IPTO considers - after 14 months - the regulatory practice chosen by CERA (the two governments, to be exact) to be wrong or even illegal, i.e. to pay it only a small percentage of its total costs and to collect the rest after the operation of the interconnection.
However, this practice (to repay regulated projects after they are operational) is applied by CERA (and by regulatory authorities of other EU states) and to all projects carried out by the EAC. The decision to give IPTO €25 million in the year until 2029, before the interconnection is operational, is a deviation of CERA (following the Framework Agreement of the two governments) from its usual practice.
From the moment that the Cypriot Government recognizes the debt of €25 million for the 2025 expenses but reserves the right to pay it "after the commitments of IPTO are satisfied" (which refers to the realization of the maritime research between Crete and Cyprus), it is considered certain that neither CERA, nor even more so the Cypriot Government will accept IPTO's request to overturn the July decision and start paying the Greek organization with much larger amounts, as the construction work of the cable will proceed. In other words, by abolishing the agreement to pay only €25 million per year, within five years.
However, according to the legislation, if IPTO's objection is rejected, then the implementing agency acquires the right to file an appeal with the Administrative Court of Cyprus, requesting the annulment of the regulatory decision of July. And it will probably be the 3rd time that IPTO has appealed to the Court against decisions of CERA, with the now visible risk that the much-publicized project of the electrical interconnection will develop into a huge legal conflict between the two states, since the majority of IPTO's shares are retained by the Hellenic Republic.
This possibility may allow IPTO to present CERA and the Republic of Cyprus as the sole responsible for a shipwreck of the project, citing the "regulatory gaps" or "bad regulatory practices of CERA" or both regulators, silencing the biggest problem: Turkey's abusive claims in the sea area southeast of Crete and the continuous postponements of the Greek Government to issue a navtex to carry out the necessary soundings, so that the laying of the cable manufactured by Nexans in Norway can proceed.
It is estimated by factors who follow the developments that the letter - attack of IPTO constitutes a formalization of the decision of the organization - possibly also of the Greek Government - to present Cyprus as obstructing the implementation of the project. By blaming it for the compensation issues that will arise if the project is indeed cancelled.
The seriousness of the situation obviously requires its co-management by CERA, the Government and the Legal Service.
