Stefan Nolte: Cyprus in talks with Germany for energy cooperation

Germany is in the process of becoming a strategical partner for Cyprus in the field of energy production, according to the President of the Cyprus Germany Business Association (CGBA), Stefan Nolte.

In a two-part interview with CBN, Nolte talks about a new focus on building stronger ties between the two countries, with this first part focusing particularly on some very important news – that Cyprus and Germany are in talks about energy production.

With Cyprus having plenty of natural gas but struggling to find a way to utilise it – and Germany being hit hard by the energy crisis following Russia’s invasion of Ukraine – this is quite an important update.

He also reveals that this is part of a broader government policy by Cyprus to make Germany its ally in the EU, following Brexit and the departure of its former strong ally Britain.

“Germany will become, or is in the process of becoming, a strategical partner for Cyprus regarding energy production, which is a very interesting and very good choice,” said Nolte. “We need guidance. And I'm not saying this because we are incompetent, or we don't know how to do things at all. But as we are a small country, we do not have the same manpower with the right competency, as a big country has like Germany. We are simply too small.”

He added, “Regarding gas, yes, there is quite an amount of gas around us under the sea but we have dozens of obstacles. Be it the situation with Turkey, be it the occupation; be it our own lack of clarity, when it comes to defining our future partners making clear and sure with whom we would go.”

The issue, according to Nolte, is that Cyprus lacks a clear vision, mission and direction. There was always the question of what to do with the gas that comes up from under the sea, he explained. “So we have to transport it somewhere, it has to be liquefied. So to build a liquefaction plant, you need a new investment of 7 billion euros; that is too expensive. Another option could be to transfer the gas to Alexandria, Egypt, because they have huge plants and they had free capacity. We started talking with them, we as Cyprus, but not with the same voice and not following our goals in a determined way. The result is that Israel made a contract with them and now they have no free capacity anymore. And we couldn't bring our gas there.”

At the same time, Israel is our partner in gas exploration, he added. “So it's a bit unclear what we want, and where we want to go. There are changing voices all the time.”

Economically, said Nolte, the best solution would be to transport the gas to Turkey. “But this is impossible at the moment. But also we do nothing so we would come to terms with them. We are following up our old policy and opinions and stance, which we have since 1974. And some years ago, Crans Montana failed badly. So I don't see that there will be a solution in the foreseeable future unfortunately.”

Cyprus needs to position itself, he added; and this is where Germany comes in. “We as a country, need to position ourselves. We need to have a clear position; we need to have a consistent position. And Germany can play a role there, also in relation to our various partners around us because Germany has a strong voice.”

Hence, the CGBA has decided that it will also focus on energy next year. “Germany has a lot of competency in this area. Yes, China has overtaken the market in terms of production. But the scientific and R&D competency is with Germany, doubtlessly.”

Asked if Cyprus has a specific strategy in place to attract German companies to Cyprus, Nolte, who is also the managing director of Shanda Consult, said: “When it comes to attracting German companies specifically, there's no specific strategy in place. However, there is a new focus of the Republic of Cyprus, on Germany in general, including business and including whatever's related to the economy.”

And the reason for this, he said, is that Cyprus lost its strong ally in the EU, with Brexit. “So we are a very small country, we have a tiny voice in the EU family, as a small country. And we indeed need a strong partner or ally, that when necessary, we have a shoulder we can lean on; who would be our supporter, our defender etc. And that was traditionally the UK, because of our colony heritage. And they went out. The question was for Cyprus, whom shall we choose as a new partner or a future partner, because this is a process; it's a political process. And this evolvement needs time. And the country that would make most sense, would be and is Germany, because it is the strongest country in the EU, they have the loudest voice. They're very determining in the EU.”

In some ways, Cyprus is closer to Germany than any of the other strong EU members, said Nolte. “If you look into the import/export figures over the last 10 to 20 years, Germany was always on place two to four in respect of figures of imports and exports. Number one was always Greece. Number two, mostly the UK but not always. And number three or four was Germany.”

So, he added, “it is the declared policy of the President, the current president, in the first couple of years, to run a policy that shall or does already bring Germany and Cyprus closer together”. According to Nolte, this was what President Nikos Christodoulides’ quick visit to Berlin was about last May, where he met with the president, Chancellor and ministers of Germany.

Stay tuned for part two of our interview with Stefan Nolte, where he delves into the business ties between Cyprus and Germany, and reveals a recent increase in German companies relocating to or creating a presence on the island.