Cyprus has begun procedures to recover €67 million in EU funding linked to the delayed liquefied natural gas (LNG) terminal project in Vasiliko, Energy Minister Michalis Damianos has said, as authorities seek to restart and complete the strategic infrastructure project.
Speaking before the House Energy Committee on 10 February, Damianos said the recovery process for the grant provided by the European Commission through the CINEA funding mechanism is already underway. He explained that part of the amount has been offset against other funds due to the Republic of Cyprus from the EU, while a portion has already been repaid in cash.
The Minister stressed that the government’s top priority is to complete the LNG terminal from the point where construction stopped. He said efforts are focused on finding a new contractor through a tender process so the project can be finished. Damianos also revealed that discussions are taking place with the United Arab Emirates regarding the possibility of a company from the Emirates completing the project, but noted that no timeline can yet be announced.
“The project must be finished, but we are not in a position today to provide timelines. When we can, we will,” he said.
A representative of the Finance Ministry confirmed that the €67 million paid by the EU will be returned, noting that an agreement has been reached with the European Commission for Cyprus to receive a correspondingly smaller amount of funding from other programmes linked to reforms. Some of these deductions were already made during 2025. The official clarified that no specific development projects were cancelled, but that Cyprus will receive reduced funding tied to reform-related programmes. As an example, reform projects initially expected to total €100 million may now be reduced to about €33 million. “We will receive reduced funds from the European Commission,” he said.
A representative of the Audit Office told the Committee that the service has requested the government’s official policy position on restarting the project, both from the current and former energy ministers, noting that previous responses were not considered satisfactory. A new letter was sent in January asking the Minister to clarify the Ministry’s strategic priorities, timelines, and planned actions for restarting the LNG terminal project.
The project’s supervising engineer told lawmakers that all materials delivered for the LNG terminal met specifications and that certificates for received materials had been handed over to ETYFA. Remaining certificates were linked to pending payments by the contractor to suppliers, with an understanding that they would be delivered once the project is completed. He added that engineers have re-examined documentation, construction-site materials, and equipment stored at supplier facilities.
Electricity Authority of Cyprus Chairman, George Petrou, said the organization’s engineers have reviewed the gap analysis and are now approaching final decisions, adding that the next step will be to launch a tender process.
(Source: CNA)
