The Cyprus Energy Regulatory Authority (CERA) has announced its decision to approve the recovery of actual investment expenditures amounting to €82m for the Great Sea Interconnector project, based on the data submitted by the Implementing Body, the Independent Power Transmission Operator (IPTO), up to 21 July, 2025.
CERA set the ceiling for payments for the period from 1 January, 2025, to 31 December, 2025, at €25m, on the condition that the Implementing Body obtains the Owner’s License and the Interconnector Line Operator License.
In statements to CNA, Energy Minister George Papanastasiou clarified that payment following CERA's decision is a matter of political decision between the Governments of Cyprus and Greece. The decision by CERA to approve part of the expenditure presented by the IPTO, and the fact that a tariff is about to be charged on Cyprus' consumers' bills by the Cyprus Transmission System Operator (TSOC) does not necessarily mean that the amount will be disbursed by IPTO, he added.
The Minister also stressed that the payment of the amount to the implementing body, based on the agreed terms, presupposes that the project is in progress in its entirety. "For a project to be considered in progress, all of its phases must be underway, not just one," he said.
According to the Papanastasiou, IPTO had claimed expenditures amounting to €250 million. CERA decided on Thursday, 31 July that €82 million of those were justified. However, due to the cap of €25 million per year for five years under the memorandum of understanding between the two governments, only €25 million out of the €82 million can be recovered in 2025. The payments for the remaining €57 million will be deferred until the interconnection becomes operational, the Minister said.
Papanastasiou continued by saying that CERA will now inform the Market Operator (TSOC) of its decision. TSOC will then set up a mechanism, in coordination with the Ministry of Finance, to start a “virtual” charge on consumers, together with a subsidy, resulting to zero costs for consumers.
When asked from which fund the subsidy amounts will be paid, the Minister said that the Council of Ministers had previously authorized the Minister of Finance to find the necessary resources.
As he explained, the competent authority to pay the amount to IPTO is the Market Operator. However, this is a political issue, he said. "The regulator has no responsibility to disburse funds. It made its decisions based on the regulatory framework. The Operator is being informed today about this decision. They must create a mechanism to implement the tariff. Whether the amount will be disbursed or not, based on the memorandum of understanding between the two governments, is a matter between the two governments”, the Minister concluded.
(Source: CNA)
