Cyprus-Israel electricity cable investment request due by July

Source: in-cyprus.com

Greece’s electricity transmission operator IPTO presented a cost-benefit study for the Cyprus-Israel segment of the Great Sea Interconnector project to energy regulators from both countries on 30 June, seeking to advance the troubled multi-billion euro infrastructure development despite Turkish objections that have disrupted progress.

The study was conducted by consultancy Exergia in collaboration with the National Technical University of Athens. IPTO plans to submit a complete investment request to relevant regulatory authorities by end-July, seeking a joint decision on cross-border cost allocation and project revenue assurance.

The Cyprus-Israel segment forms the second phase of the broader Greece-Cyprus-Israel electricity interconnection, which has faced significant obstacles in 2025. The main Cyprus-Crete section was suspended in March after Turkey sent warships to disrupt seabed surveys, forcing IPTO to freeze €70 million in payments to French cable manufacturer Nexans.

Project challenges intensify

The €2.4 billion Great Sea Interconnector, designed as the world’s longest submarine power cable at 1,240 kilometres, has encountered mounting difficulties since construction began in 2023. The project received €657 million in EU funding through the Connecting Europe Facility.

The meeting on 30 June included representatives from the Cyprus Energy Regulatory Authority, Israel’s Public Utilities Authority, energy ministries from both countries, and the European Commission’s Directorate-General for Energy.

Government maintains no-cost for citizens commitment

Cyprus President Christodoulides affirmed on Tuesday that government decisions regarding the electricity interconnection would remain unchanged, with no burden on consumers.

“The decisions taken by the Cyprus government, which concern a specific amount, 25 million for five years without burdening the Cypriot consumer, will apply,” Christodoulides said, speaking at the Cyprus Hotel Association’s Annual General Assembly on 1 July.

Greek Foreign Minister Giorgos Gerapetritis stated in March that the project “remains on schedule for completion by the end of the decade,” despite the suspension. However, original timelines indicating completion by December 2025 now appear unrealistic given current obstacles.

Regulatory framework

The investment request process represents the first critical step for project maturation under European TEN-E Regulation, establishing required regulatory frameworks before construction can commence on the Cyprus-Israel segment.

If the project fails, the European Commission could demand return of its €657 million investment, complicating efforts to secure alternative funding. IPTO faces potential contractual penalties from Nexans over the suspended €1.4 billion construction contract.

The interconnector aims to end Cyprus’s status as the last EU member state without electricity grid connections, whilst providing Israel with enhanced energy security and renewable energy integration capabilities.

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