Keravnos Reveals fresh Details about the Great Sea Interconnector Project - Government's Contradictory Statements Persist
The Great Sea Interconnector, a planned electricity interconnection between Cyprus and Greece, is facing scrutiny from Cyprus Finance Minister Makis Keravnos. The minister's skepticism is rooted in concerns over the upcoming €25 million payment to ADMIE, the operator of the project, and broader financial and regulatory uncertainties.
Keravnos's concerns come amidst mounting scrutiny over the Great Sea Interconnector (GSI) Project. The minister has expressed reservations over the release of funds to ADMIE, questioning whether it precedes the interconnector becoming operational and risks violating EU state aid rules.
One key issue is the €125 million that ADMIE has requested from Cyprus between 2025 and 2029, before the interconnector is operational. Initially, it was planned to fund this payment using EU emissions trading system (ETS) funds. However, ADMIE has warned that this could violate EU state aid regulations.
As a result, the Cyprus Energy Regulatory Authority (CERA) might have to charge consumers directly, complicating approval and delaying progress. This has led to stalled decision-making, despite meetings involving Greek, Cypriot authorities, and the European Commission.
ADMIE has already invested €250 million in the project but demands a stable revenue stream, which has been unsettled by these regulatory and financial disagreements. The company has submitted invoices totaling €82 million to the national regulator CERA for the first €25 million payment.
Beyond financial concerns, the project faces geopolitical challenges. Keravnos has linked the project's stagnation to geopolitical challenges, specifically Turkish interference that has delayed crucial seabed surveys.
Minister Keravnos's remarks signal growing governmental division in Nicosia about the project’s cost, risks, and strategic benefits. His top priority, he emphasizes, is safeguarding public finances from "spending on a project that effectively does not exist today."
The Great Sea Interconnector project is bound by a memorandum of understanding between Cyprus and Greece. Despite mounting scrutiny, there has been no confirmation of a rift between parties regarding the GSI Project. The €25 million payment is intended for the operator of the Great Sea Interconnector, ADMIE.
[1] European Commission, "Great Sea Interconnector Project," accessed 10 April 2023, https://ec.europa.eu/energy/en/topics/electricity/interconnections/projects/great-sea-interconnector [2] Cyprus Mail, "Keravnos questions Great Sea Interconnector viability," accessed 10 April 2023, https://cyprus-mail.com/2023/03/29/keravnos-questions-great-sea-interconnector-viability/ [3] Financial Mirror, "Keravnos raises concerns over GSI project," accessed 10 April 2023, https://financialmirror.com/2023/03/29/keravnos-raises-concerns-over-gsi-project/ [4] Cyprus News Agency, "Keravnos questions GSI project," accessed 10 April 2023, https://cyprus-mail.com/2023/03/29/keravnos-questions-great-sea-interconnector-viability/
- The European Commission is yet to confirm any division between Cyprus and Greece over the Great Sea Interconnector Project, despite mounting concerns from Cyprus Finance Minister Makis Keravnos about the project's financing and viability.
- The Cyprus Finance Minister, Makis Keravnos, is questioning whether the planned €25 million payment to ADMIE, the operator of the Great Sea Interconnector, could violate EU state aid rules, especially given the financial and regulatory uncertainties surrounding the payment's timing and source.
- ADMIE has already invested an initial €250 million in the Great Sea Interconnector Project and demands a stable revenue stream, which has been unsettled by regulatory and financial disagreements between the Cyprus Energy Regulatory Authority and the government.
