Akel seeks answers on GSI viability

In a letter published on Thursday, the leader of opposition Akel has asked the finance minister how the entry of a French asset management firm in the Great Sea Interconnector (GSI) affects Cyprus’ plans vis a vis the project. In the same letter, Stefanos Stefanou asks whether Cyprus considers the project financially viable. Last month the French firm, Meridiam, took a 66 per cent stake in the holding company in Greece that is behind the GSI. Greece’s independent power transmission operator (Admie) retains a 33 per cent share. Stefanou wrote: “Naturally, the entry of a new investor is an important development. Nonetheless, we feel that on its own it does not answer critical questions regarding the total cost and viability of the project, its financing, or the cost to Cyprus and consumers.” Related Articles • Work on GSI ‘could resume by year’s end’ • Gerapetritis on interconnector sea dispute: Greece will exercise sovereign rights • Mitsotakis hails French investment in interconnector The Akel boss reminds the finance minister that only a year ago the latter was telling media that two studies had found the project was not viable. Stefanou asks whether the finance ministry has knowledge of the full content of the deal between Admie and Meridiam, as well as which party now owns the project’s assets and who has the lead on construction and operation. “And therefore, based on the new state of play, is the government examining Cyprus’ participation in the shareholding structure of the GSI?” The government is considering whether the Cypriot state itself will make a €100 million equity investment in the interconnector project. A final investment decision will be made once a comprehensive due diligence check and a cost-benefit analysis are carried out. Alongside the potential equity investment, Cyprus has separately committed to a political and financial support package of €25 million annually for five years (capped at €125 million) to cover consumer costs during the construction phase. Stefanou asks whether the agreement between Admie and Meridiam “changes anything” regarding financial or other commitments undertaken by Cyprus. In his missive, he wants to know whether new/updated studies have been done documenting that the project is now viable, and whether any study exists showing that the interconnector will bring down electricity prices in Cyprus and, if so, to what extent. Further, Stefanou seeks information about the current estimated total cost of the project and its estimated completion date. He asks how the funding gap will be covered, and how much of that would come from Cyprus. “We acknowledge the strategic importance of the electrical connection in order to end Cyprus’ energy isolation,” Stefanou concludes. “But implementation must be done on terms ensuring energy security without creating new dependencies, while also ensuring the viability of public finances and the provision of inexpensive electricity, as far as that is possible.” The latest cost estimate for the GSI circulating in the media stands at €1.9 billion. This concerns the section of the subsea electricity cable linking Greece to Cyprus. The multi-stage project – including the section linking Cyprus and Israel – is said to be costed at €2.4 billion. The European Union has pledged €657 million in funding.