A rescue plan, with the active involvement of the Independent Power Transmission Operator-IPTO, is being launched for the big project of the Cyprus-Greece-Israel electrical interconnection, which is currently on the … razor’s edge. In particular, the efforts to end the financial impasse seem to have been successful.
Agreement
According to information, IPTO reached a preliminary agreement with an Israeli fund for its entry, with a percentage of up to 33%, in the share capital of Euroasia Interconnector, i.e. the implementing body of the Crete-Cyprus interconnection. This specific development, on the one hand, confirms the increased interest shown recently by Israel for the project, on the other hand, it provides a solution to the financial gap that existed and called into question the smooth development of the project.
And this is because with the equity participation of IPTO and the Israeli fund in Euroasia Interconnector, the necessary conditions (sufficient equity capital) are created for the financing of the project by the European Investment Bank (EIB) and for the completion of its architectural financing.
IPTO
The planned participation of the Transmission System Operator of Greece in the project, with a percentage of at least 25% (based on the Letter of Intent signed with Euroasia Interconnector) and with an option to further increase to 33%, was the guarantee to convince the Israeli investors to enter the project, taking into account – among other things – the expertise of ADMIE in electrical interconnection projects.
The Manager’s agreement with the Israeli fund is “equivalent” to the one that ADMIE has concluded with Euroasia Interconnector, as reflected in the Letter of Intent. It is the culmination of the intense mobility developed by both the Administrator and the shareholders of the implementing body, who have recently been in discussions in search of potential investors.
Shareholders
In fact, IPTO has informed the shareholders of Euroasia Interconnector about this possibility of expanding the shareholder base and about the next steps required in order to conclude the necessary shareholder agreements in time. This is because, on the basis of the contract recently signed by Euroasia Interconnector with the Norwegian company Nexans for the construction of the cable section of the Crete-Cyprus interconnection, the first milestone (regarding the payment of 50 million euros) expires soon, namely on the 7 September.
At the same time, for IPTO the considered entry of the Cypriot State into the share capital of the EuroAsia Interconnector is in the interest of the project as it will further improve its financing conditions and could create even better conditions for the start of the construction of the interconnection that will lift the electrical isolation of Cyprus.
As concerns
The implementation of the Cyprus-Greece-Israel electrical interconnection has been on a razor’s edge lately, with the Commission announcing that it may withdraw the project from EU funding if the private company EuroAsia Interconnector that “runs” it does not succeed in meeting the milestones set in order to “unlock” €657 million from the Connecting Europe Facility (CEF).
Another 100 million euros have been committed by the Cyprus National Recovery Fund. However, EuroAsia Interconnector will have to secure the rest through borrowing. However, the company’s request to the European Investment Bank (EIB) for a loan of approximately 580 million euros “stuck” and a review request was requested from the project implementing body.
As reported to OT by an official of the Ministry of Environment and Energy (MIE), the Greek government is closely monitoring the issue and is in contact with the Commission in order to make things flow, for a project that has been characterized as of common interest for the EU.
Cypriot parliament
However, the saga will continue today in the seats of the Cypriot Parliament, as the Energy Committee will discuss the matter thoroughly, with the participation of representatives of the country’s Ministers of Energy and Finance, the Cyprus Energy Regulatory Authority, the Transmission System Operators and of Distribution, the head of the Delegation of the European Commission in Cyprus and representative of EuroAsia Interconnector Limited.
Chapters
In fact, according to a letter sent by the Ministry of Energy of Cyprus to the Energy Committee, published by Phileleftheros (philenews.com), it does not appear that EuroAsia Interconnector found or committed the funds required. It is pointed out that the company has not yet fulfilled the conditions set by the Commission in order to complete the sponsorship of 657 million euros, while regarding the loan request from the EIB it is noted that it has not yet officially responded to EuroAsia.
“The main delay is due to the fact that the private implementing body should have completed the financial plan of the project, i.e. to secure through equity, sponsorship, borrowing and/or investors the total amount required,” the letter to the Commission notes Energy.
The issue is expected to be discussed at the upcoming tripartite meeting of the leaders of Greece – Cyprus – Israel, which will take place in Nicosia on September 3 and 4.
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