Cyprus-Greece energy link advances as regulators approve €550m expenses

Source: in-cyprus.com

Greek and Cypriot energy regulators have approved approximately 550 million euros in recoverable expenses for IPTO, Greece’s power grid operator, clearing another hurdle for the electrical interconnection project between Cyprus and Greece.

The Cyprus Energy Regulatory Authority (CERA) and its Greek counterpart RAE made the joint decision during a teleconference on Monday, sources told Phileleftheros.

The approved expenses, covering the 2024-2025 period, do not constitute immediate revenue for IPTO. Full cost recovery will occur over 35 years, based on a predetermined formula.

Cyprus is expected to begin reimbursing IPTO by late 2025 or early 2026, starting with 25 million euros. The Cypriot government has committed to providing 125 million euros by 2029, with remaining costs to be gradually recovered from Cypriot consumers once the interconnection becomes operational.

Greek consumers will contribute to expense recovery from 1 January 2025 through a special charge. Under the cross-border cost allocation agreement, Cyprus will cover 63% of IPTO’s expenses, with Greece responsible for the remaining 37%.

Regulators will scrutinise IPTO’s expense claims, requiring proof of purchases and payments to determine their reasonableness.

Industry observers are now focused on when IPTO will issue Nexans, the French cable manufacturer, the Full Notice to Proceed. This notice will firmly commit IPTO to the 1.4 billion euro contract for the project’s implementation.

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