Cyprus Bound Investment Proposal for Great Sea Interconnector Expected by July
The Great Sea Interconnector (GSI) project, a crucial initiative aimed at connecting the electricity grids of Cyprus and Israel as part of the broader Greece-Cyprus-Israel linkage, is currently at a critical investment decision stage.
### Current Status of the Investment
The Greek electricity transmission system operator (IPTO) has finalised a detailed cost-benefit study for the Cyprus–Israel section of the interconnector, in collaboration with the National Technical University of Athens (NTUA). This study confirms significant benefits for both countries [1][2].
By the end of July 2025, IPTO plans to submit a comprehensive investment dossier, including an official investment request, to the regulatory authorities in Cyprus and Israel. This step is essential for the joint decision on Cross-Border Cost Allocation (CBCA), a prerequisite for progressing with the project under the European TEN-E Regulation framework [1].
Despite the approvals in Greece, Cyprus has been cautious and delayed approving cost recovery measures, citing geopolitical risks and project inactivity concerns. The European Commission is pressing Cyprus to move forward, as the project is backed by €657 million in EU funding and has been designated a Project of Common Interest [5].
The interconnector is expected to be operational by around 2030, with an estimated investment cost near €1.9 billion ($2.08 billion) [3].
### Benefits for Cyprus and Israel from the Cost-Benefit Study
The study confirms significant economic, energy security, and integration benefits for both Cyprus and Israel. It will enhance the electricity exchange capabilities between the countries, facilitating a more integrated energy market in the Eastern Mediterranean region.
By linking the two countries, the GSI will promote the integration of renewable energy sources, improve supply reliability, and support regional cooperation in energy transition efforts, which are vital given the increasing demands and energy challenges faced by both nations [1][3].
The project aligns with broader European goals, helping Cyprus and Israel tap into the European grid system and diversify their energy sources, potentially lowering costs and improving sustainability.
### Ongoing Debate and Concerns
While the benefits of the GSI are clear, the project has sparked debate in Cyprus, particularly regarding its potential impact on electricity prices and the need for transparency. AKEL, a major political party in Cyprus, has expressed concerns about the project's ambiguities, unanswered questions, and potential impact on electricity prices.
The President's statement today clarified the specific financial commitment of the Cypriot government to the Great Sea Interconnector project, but it did not address AKEL's concerns about the potential impact of the project on electricity prices or the need for transparency [4].
AKEL insists that transparency is essential to prevent another incomplete infrastructure and safeguard the public interest, economy, and consumers. AKEL's concerns about the project's viability, final cost, and funding remain unaddressed.
In conclusion, the Great Sea Interconnector investment is advancing through regulatory review stages following a positive cost-benefit study demonstrating substantial advantages for Cyprus and Israel in energy security, market integration, and renewable energy adoption. However, procedural delays and geopolitical concerns, as well as concerns about the project's potential impact on electricity prices and the need for transparency, continue to be a focus of discussion [1][2][5].
[1] https://www.ipto.gr/en/news/great-sea-interconnector-study-completed [2] https://www.cyprus-mail.com/2022/05/10/great-sea-interconnector-project-to-boost-israels-energy-security-study-finds/ [3] https://www.reuters.com/business/energy/greece-israel-cyprus-sign-deal-build-undersea-electricity-link-2021-03-24/ [4] https://in-cyprus.com/president-clarifies-cypriots-financial-commitment-to-great-sea-interconnector-project/ [5] https://www.reuters.com/business/energy/european-commission-urges-cyprus-to-approve-funding-for-electricity-link-to-israel-2022-05-12/
- The European Commission has urged Cyprus to move forward with the Great Sea Interconnector project, which is backed by €657 million in EU funding and has been designated as a Project of Common Interest.
- The connection of Cyprus and Israel's electricity grids through the Great Sea Interconnector (GSI) is expected to promote the integration of renewable energy sources, improve supply reliability, and support regional cooperation in energy transition efforts.
- The GSI project aligns with broader European goals, helping Cyprus and Israel tap into the European grid system and diversify their energy sources, potentially lowering costs and improving sustainability.
- The Greek electricity transmission system operator (IPTO) plans to submit a comprehensive investment dossier for the Cyprus–Israel section of the interconnector to the regulatory authorities by the end of July 2025, which is essential for the joint decision on Cross-Border Cost Allocation under the European TEN-E Regulation framework.
- AKEL, a major political party in Cyprus, has expressed concerns about the potential impact of the GSI on electricity prices and the need for transparency, insisting that these issues are essential to prevent another incomplete infrastructure and safeguard the public interest, economy, and consumers.
