Minister concerned that Brussels might withdraw €657m subsidy for energy project

Energy Minister, George Papanastasiou, has expressed concern that the European Commission might withdraw a €657 million subsidy for the country's electricity interconnection with Greece through the Great Sea Interconnector (GSI) project, after the rejection by the Cyprus Energy Regulatory Authority (CERA) of the implementing body’s proposal for charging Cypriot consumers from January 2025 for the recovery of the project's €1.9 billion construction costs.

In his statements on the sidelines of an event in Nicosia on 4 July, Papanastasiou said the European Commission has already reacted following CERA's decision, saying that this decision may make the project unsustainable. He also said that there were reactions from the implementing body – Greece’s Independent Power Transmission Operator (IPTO) – that said that the project was no longer sustainable. He also said that a reaction from the Greek Government, was “only a matter of time.”

He said he was more concerned about the reaction of the European Commission, which is offering €657 million for the project, which he noted, was a result of Brussels' political decision for the connection of all member-states, so that there is a single power grid in Europe.

If the European Commission decides to withdraw this €657 million, “the project essentially dies”, the Minister said, noting that he was to hold a teleconference with the Commission next week on this matter.

Asked about the cost for consumers, Papanastasiou said that IPTO has indicated a subsidy fee of 0.6 cents per kilowatt hour, adding that, at the end of 2029 when the connection will be operational, that fee would be increased. He noted, however, that the benefits once this interconnection is up and running “will be clearly greater” and that the fee Cypriot consumers will be charged, will be “negligible”.

He added that CERA said in its decision said that it will not accept the transfer of this cost or any part of it to Cypriot electricity consumers from January 1, 2025 and did not indicate any other date, “meaning that it will insist on the transfer of this fee or this cost when the electricity interconnection is operational”, at the end of 2029.

Papanastasiou said that CERA’s decision should be respected and that, if there is any change, IPTO should back it with documentation, and, in such a case CERA may change its decision. 

(Source: CNA)