Between a solution and an impasse, with both possibilities visible, the Greece-Cyprus interconnection remains with yesterday’s Council of Ministers of Cyprus meeting again today to discuss one of the two decisions that could definitively “unblock” the implementation of the project.
Contrary to Monday’s assurances, when an agreement in principle was reached between the two parties, the Council of Ministers yesterday postponed the approval of the relevant agreement until today, prolonging the climate of uncertainty surrounding the project.
The steps for financing approval
It should be recalled that the agreement provides for the financing of the project by the Cypriot government with 25 million euros per year from 2025 until the operationalization of the project in 2030, that is, a total of 125 million euros.
A decision by the Cypriot Regulatory Authority is required for this matter, but it will proceed with this if it receives the “green light” from the government, which was not achieved during yesterday’s meeting. The matter will be discussed again today at an extraordinary meeting of the Council of Ministers to reach a decision.
It should be noted, as reported by sources with knowledge of the matter, that the delay in completing the regulatory framework so that the implementation of the project can proceed normally, translates into an additional daily charge of around 1,000,000 euros without any benefit for the electrical system and consumers.
The amounts will be recovered from Cypriot consumers
It should be recalled that the amounts that the Republic of Cyprus will contribute during the first five years will come from revenues from the auctioning of CO2 rights, but will be recovered indirectly from Cypriot consumers.
Furthermore, the remaining possible costs of ADMIE during the construction of the project, which will exceed 125 million, will be recovered through capitalization after the interconnection starts operating, again by Cypriot consumers.
The second pending decision to close the main part of regulatory “capital” concerns the determination of the WACC (weighted average cost of capital) in Cyprus.
Based on the same information, this value will be set at a minimum of 8.3% for the first 17 years. As for the decision to be taken by RAAEF (Regulatory Authority for Energy, Waste and Water), this concerns the WACC in Greece. This will be set at 9%.
