Cyprus "seeking EU-backed financial support mechanism for Great Sea Interconnector"

Cyprus, Greece, and the European Commission are actively seeking an EU-backed mechanism to provide financial support for the Cyprus-Greece electricity interconnection project, the Great Sea Interconnector (GSI), without passing the cost onto consumers, in case the GSI requires financial assistance, reliable sources have told the Cyprus News Agency (CNA).

More specifically, according to the information, the Cypriot government is in discussions with Greece and the EU to find a legally compliant solution within the EU framework. This solution would address situations where a private entity such as Independent Power Transmission Operator (IPTO) collaborates with two EU member states (Cyprus and Greece) that aim to alleviate the cost of electricity for their consumers.

The dialogue aims to establish a mechanism, specifically a legal methodology, that would guarantee the project's financial viability during its construction phase. This would prevent any cost burden on consumers while simultaneously providing the necessary financial support to the project.

Additionally, the Cyprus Energy Regulatory Authority (CERA) is expected to assess, in a short timeframe, whether there is a financial gap during the construction of the GSI and, if so, to quantify it. This is crucial since it is already established that the project will be financially sustainable once operational, sources indicate.

However, according to the information, during the construction phase, the project is considered marginally viable, which is why the Cypriot government is seeking lawful methods through the EU to avoid passing on costs to consumers and to provide further financial reinforcement for the GSI.

According to international investment practices, projects deemed marginally viable during construction often struggle to attract investors.

(Source: CNA)