Akis Ellinas: €160m energy investment in jeopardy due to natural gas uncertainty

Another major energy investment, valued at €160 million, is in the pipeline and moving toward implementation. With all necessary permits secured and construction expected to begin by the end of the year, the project is nearly ready to launch.

However, its execution is being hindered by delays and ongoing uncertainty regarding when natural gas will finally arrive in Cyprus. That’s crucial because the project’s primary goal—spearheaded by Paramount Energy Corporation Ltd, a subsidiary of K. Ellinas Energy Ltd—is the generation of electricity using natural gas.

The investment involves the construction and operation of a 105MW thermal power plant in the Tochni area, within the Vasilikos industrial zone. The plant will consist of six power units, each with a capacity of 17.5MW, capable of operating on diesel, natural gas, and up to 25% hydrogen.

A broader energy portfolio

K. Ellinas Energy’s portfolio already includes the construction and operation of a major 82MW wind park in the Paphos district. The company is also developing 250MW in total projects, including 150MW of photovoltaic parks alongside this 105MW thermal plant in Vasilikos.

Project financing in question

Speaking to InBusinessNews, K. Ellinas Energy's Director Akis Ellinas revealed that financing talks are underway with the National Bank of Greece, which is prepared to fully finance the project, either independently or in partnership with another financial institution.

However, despite the project’s positive evaluation, banks are hesitant, expressing concerns over its viability in the absence of a clear timeline for natural gas delivery. Both the company and interested financial institutions have sent a letter to the Deputy Minister to the President, Irini Piki, requesting a meeting with President Nikos Christodoulides.

“Banks want to know”

“The banks are willing to finance the project,” Ellinas explained, “but the uncertainty around when natural gas will actually arrive in Cyprus is a stumbling block. They want to know where things stand before making a final decision.”

“A bank financing such a major project, worth many millions, understandably wants assurance that the investment won’t be lost,” he added. “The delay in the natural gas plan is cause for concern.”

“We’ve already invested heavily—purchasing the land, conducting the required studies, and more, all of which have incurred significant costs,” Ellinas continued.

If a meeting with the President is confirmed, senior executives from the National Bank of Greece (Cyprus) are expected to attend, potentially alongside representatives from Greece—as was the case in a previous meeting with the Energy Minister.

“The project is very well designed, the financials are solid, and the numbers add up,” Ellinas emphasized. “But the ongoing uncertainty about the arrival of natural gas is understandably worrying.”

He also stressed the need for a clear political decision on the matter. “Unless the President puts his foot down and demands progress, nothing will change. We’ve been hearing for years that natural gas is coming—and yet, it’s still not here.”

“It’s unacceptable to attract investors, incur expenses, and then have the government pull the rug out from under us. The delay in securing natural gas is a very serious issue, and unfortunately, no one has been able to resolve it,” he stated.

About Paramount Energy Corporation Ltd

Paramount Energy Corporation Ltd, the most recent addition to the K. Ellinas Energy group of companies, was established in 2019. Its primary activity is energy production through conventional fuels, specifically natural gas.

In August 2019, the company received a licence from Cyprus’ Energy Regulatory Authority to construct a 105MW thermal power plant. The project is located within the Vasilikos Industrial Zone in Larnaca District and will occupy a 20,000 sq. meter area.

Once fully operational, it is expected to generate approximately 650,000 MWh of electricity annually, helping to address a projected electricity production deficit in Cyprus over the coming years.

With electricity demand expected to rise, the company aims to help bridge this gap. Another key benefit of the project is its potential to reduce CO₂ emissions, since natural gas is considered more environmentally friendly than fossil fuels due to its lower carbon footprint.

According to the company, this is a critical factor, as it firmly believes natural gas is the key to Cyprus’ transition to a cleaner energy future.