George Pantelis: Cyprus' energy's stance on GSI will depend on the repercussions on the economy

The Ministry of Finance is not in a position to evaluate the Cyprus-Greece electrical interconnection project because several parameters remain pending, the Permanent Secretary of the Ministry of Finance, George Pantelis has clarified.

In statements to the Cyprus News Agency (CNA), he noted that the Ministry's stance on the matter will depend on the project's impact on the economy and the energy sector.

He pointed out that these parameters involve regulatory decisions, the project’s financing agreement, the corporate structure of the organisation, and the business plan, all of which are not yet finalised.

"There is this unknown factor, which prevents us from completing our evaluation because it is important to have these elements before us to assess the project's impact on the economy and specifically on the energy sector," he said, referring to how the project will affect conventional energy production, the development of renewable energy sources (RES) in the country, and electricity consumption prices.

In any case, he clarified that whether or not the decision is made for the Republic of Cyprus to participate in the share capital of the Great Sea Interconnector, the evaluation of the economic impacts must be conducted. "The Ministry of Finance's position essentially concerns the project's implementation and will depend on the effects we determine it will have on the economy and the energy sector", he noted.

Asked when the above matters are expected to be completed and whether they should have already been done, given the current stage of the project, Pantelis stated, "they should have already been done. We follow the media reports indicating that the project is in an advanced stage. But I believe that there should have been financing agreements or agreements with Nexans and Siemens for the implementation of the substations and the construction of the cable. None of this has come before us, so we do not have a complete picture to proceed with the evaluation."

When asked if the Ministry of Finance’s position is to pause the project based on what has been said, Pantelis reiterated that "we need to have a complete picture to be able to make a technocratic and objective assessment of the project."

Regarding the decision of the Cyprus Energy Regulatory Authority (CERA) not to pass on the project's cost to consumers before its implementation, the Permanent Secretary of the Ministry of Finance said he agrees with this. "If there had been a different decision, you understand that essentially, we as a country, as an economy, would be taking on the geopolitical risk associated with this project." Asked who should assume the geopolitical risk, he responded, "I believe it should be the investor. The investor takes on various risks, whether it's construction risk, technical risk, geopolitical risk, or financing risk. All of these are the responsibility of the implementing body."

Asked whether the assumption of risk by the Republic of Cyprus is related to the potential benefit from the project’s implementation, he said that to claim there is a benefit for the Republic or the Cypriot economy, we need to see the studies. "Since we have nothing before us, no one can say with certainty that there will be any benefit."

(Source: CNA)