Final cost of GSI remains an unkown

The final price tag for the Great Sea Interconnector (GSI) remains an unknown, while the project is now estimated to come online a year later than initially forecast, the energy regulator said on Tuesday. Head of the energy regulatory authority (Cera) Polis Lemonaris was giving MPs a status update on the GSI – a planned subsea electricity cable linking Cyprus’ grid to that of Greece. He said the final cost of the GSI cannot yet be “safety estimated” – but added that judging by other interconnectors, the €1.9 billion cited does not seem realistic. Moreover, in the event that seabed surveys – still ongoing – show a need to reroute the subsea cable, the cost would likely go up. But going with the standard €1.9 billion number, the official explained the cost distribution for Cyprus and Greece, currently set at 63 per cent to 37 per cent, respectively. Minus the €657 million in EU grants, Cyprus’ share of the cost comes to €749 million, and Greece’s to €440 million. In addition, the contracting parties bear the operating costs equally; these come to €2 million annually up until the project’s completion, and then €15.5 million per year during actual operation. As part of the incentives agreed, Lemonaris said, Cyprus will pay €25 million per year for the 2025-2029 period, with a maximum payment of €125 million. Cyprus has yet to pay Admie the first €25 million installment. In 2025, Admie – Greece’s independent power transmission operator and project promoter for the GSI – made a filing claiming it had incurred €302 million in expenditures. Having reviewed the documentation, however, Cera concluded instead that expenses were €82 million up until that time. The two countries have also agreed on a guaranteed rate of return on investment of 8.3 per cent for the project manager. This rate applies for seven years, later dropping to 4.6 per cent for the next 17 years. On the actual work done, Lemonaris said that so far 280km of cable has been laid on the seabed, out of the total distance of 900km between the two points in Crete and Cyprus. Meanwhile, another 232km of cable has been manufactured but yet not laid. And 60 per cent of the necessary seabed surveys have been completed; the remaining 40 per cent would take about six months. The seabed surveys are included in the approved capital expenditures budgeted for the 2024-2025 period, which altogether tally at €571 million. Elsewhere in his presentation, Lemonaris said that the original target of January 2030 set for the project’s completion now looks like January 2031, according to fresh estimates. MPs wanted to know the status of ownership and control in the project following the acquisition by Meridiam – a French infrastructure investment firm – of 66 per cent of the shares in the holding company based in Greece. Admie retains a 33 per cent strategic minority stake. Based on their most recent information, Lemonaris said, the ownership and management permits still appear to be held by Admie, which also remains the project promoter. However, Cera is awaiting an update from Admie regarding ownership and management following Meridiam’s entry into the project. Cera formally requested the update in August; it has yet to receive a response. Regarding the cash value of the 66 per cent shares acquired by Meridiam, Lemonaris said this is also an unknown. Last month President Nikos Christodoulides said Cyprus would release the first €25 million contribution towards the Great Sea Interconnector (GSI) once a Navtex is issued for the resumption of seabed surveys. Energy Minister Michael Damianos said the Navtex would be issued by Greek authorities by the end of this month.