Cyprus Says Huge European Power Cable Project May Need Extra Funds
Assessment and Funding Challenges for the Great Sea Interconnector
By Kate Abnett
Project Overview
NICOSIA, May 12 (Reuters) - A stalled project to build one of the world's largest undersea power cables to link mainland Europe to Cyprus may need extra funds to go ahead, if an upcoming assessment confirms its costs have ballooned, Cyprus' energy minister told Reuters on Tuesday.
The Great Sea Interconnector is a 1.9-billion-euro ($2.2-billion) project to build a transmission cable linking Greece to Cyprus and later Israel under the Mediterranean Sea.
Stalled Progress and Geopolitical Tensions
The project has been stalled for years, amid concerns over its cost and geopolitical tensions in the eastern Mediterranean, where Greece and Turkey are at odds over the limits of their continental shelves.
Awaiting Cost Assessment
Cyprus and Greece are now awaiting the results of a study by the European Investment Bank, which will assess whether the cost of the project has spiralled beyond the original forecast, Cyprus' energy minister, Michael Damianos, said in an interview.
Potential Solutions for Funding
"If the project is going to cost more, then there are two or three different ways around that," Damianos said, adding that this could include seeking additional investors, or further support from the EIB.
"If it's going to be much more, then we need to be looking around additional sources of funding ... we do have some ideas, but we first need to see how much this project's going to cost."
Upcoming Meetings and Discussions
Damianos was scheduled to meet the European Commission and Greece's energy minister in Nicosia on Tuesday.
The EIB said discussions on the project were ongoing. "Any potential financing request would be assessed in line with the Bank’s policies and procedures," a spokesperson said.
Significance for Cyprus and the EU
Cyprus is the only EU country that has no links to other members' electricity market, and the cable aims to improve its energy security.
The EU has committed 657 million euros in funding for the project.
Impact on Consumers and Energy Exports
The project aims to eventually bring down bills for consumers, and export Cyprus' excess solar energy to Europe and Israel.
But 63% of the cost of construction would be paid for through electricity bills in Cyprus, making its overall cost a key consideration for the government, Damianos said.
Exchange Rate Information
($1 = 0.8529 euros)
(Reporting by Kate Abnett; additional reporting by Michele Kambas; Editing by Kevin Liffey)
