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Questioning about the DEFA budget in the Energy Committee

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Προβληματι&sigma ;μoς για προDπολογισμo ΔΕΦΑ στην Επιτροπor ΕνΕργειας

By Alexia Cafetzis

The discussion of the budget of the Public Natural Gas Company (DEFA) has begun in the Energy Committee, the first after the change of the legal status of the organization from a legal entity of private law to a legal entity of public law and the first to be brought to the Parliament, with the President of the Committee Kyriakos Hatzigianni to speak of a “problematic organization” and to mention that the officials were called to come back next week before the Commission with answers to questions related to the funding of DEFA from the EU and what is happening with the staff.

According to the figures tabled in Parliament, the budget foresees net total capital and operating costs of €38.6 million.

The budget includes a total of €31 million in capital costs, 3 million increased compared to previous years. Estimated net operating expenses for 2025 and 2026 amount to €8.5 million and €8.7 million respectively.

In the 2024 budget, 36 new jobs are requested plus the positions transferred from employees who served at DEFA LTD. It is noted that the directive regarding the reduction of admission scales by 10% is taken into account, as it is followed that applies in the public and wider public sector.

The state sponsorship to DEFA for 2024 will be reduced from €18 million to €12 million, while for the years 2025 – 2026 it will be reduced to €2 million.

In detail, DEFA's budget for the year 2024 includes, among other things, an amount of €20.5 million for “Investments in subsidiaries”, which concerns a transfer to the share capital of the subsidiary Natural Gas Infrastructure Company (ETYFA) Ltd, which operates as a special purpose vehicle for the promotion of the energy project in Vasiliko and spending of €10 million for “other construction projects” which concern the construction works for the natural gas pipeline network.

Within 2024, it is expected that ETYFA's liquefied natural gas import infrastructure in Vassiliko will be completed. At this stage, DEFA should have sufficient staffing based on the new organizational chart that has been submitted for approval.

When DEFA starts importing natural gas, the budget is expected to vary significantly since it will include the revenues and expenses from the purchase and sale of LNG which are estimated at approximately €500 per year.

RES and EXE Fund Budget

At the same time, the discussion of the Renewable Energy Sources and Energy Conservation Fund (RES and E.E. Fund) budget for 2024 began in the Committee, which, as mentioned, had been delayed due to the parallel preparation of the “Photovoltaics for All” plan, which is a large part of the budget .

The budget for 2024 foresees revenues from the imposition of a consumption tax amounting to €19,448,129.

According to the draft budget of the RES and EXE Fund for 2024, the total revenues are expected to amount to €29,986,636 (plus an estimated reserve of €86,959,914 at the end of 2023), of which €2,232. 000 concerns loan repayments, from applicants who will join the planned category of the “Photovoltaics for All” Grant Scheme.

The Fund will also receive a State Grant of €5,921,773 which concerns the financing of the Fund's Grant Plans from the EU Recovery and Resilience Mechanism (Regulation (EU) 2021/241), and additionally the Fund is expected to have income from amounting to €813,626 from the compensatory benefits collected by the EAC.

The total costs included in the budget for 2023 amount to €111,946,550. These concern expenditure of €110,406,691 for grants and subsidies commitments, which include €22,551,391 for commitments in the renewable energy sector from previous years' subsidy plans/contracts, €87. 855,300 for commitments related to sponsorship plans to encourage the use of RES and E.E., of which €35,100,000 relate to social welfare benefits (vulnerable population groups). Also costs of €813,626 for compensatory benefits to communities adjacent to large wind farms and biomass units. Operating and other expenses amounting to €726,233 are also included.

In his statements after the Committee session, its President, DISY Member of Parliament Kyriakos Hatziiganni, stated that the Government tabled the two budgets late.

< p>Regarding the DEFA budget, he said that the Parliament is under pressure to decide here and now on a budget of an organization that has a very rich history of mismanagement. He said they are asking for an increase in staff with 36 new posts while there are no service plans, organizational chart, staff consultation, while there are fights and court cases for confrontations between individuals. This, as he said, “cannot go unnoticed by the Parliament” and give €35 million to a function that does not correspond to a proper organizational structure.

He said that they have asked to come before them next week with answers to questions in relation to their EU funding and what is happening with the staff and the mentality that prevails. He added that when they made DEFA a public organization there were commitments that they would come before Parliament with a service plan as soon as possible, while this was not done and he said that such a thing is not respectful to Parliament. They have a requirement, he noted, to finance a troubled organization.

He added that the Commission can make a catalytic contribution to overcome these problems. The fact that there is a problematic operation, he added, makes them obliged to seriously exercise parliamentary control.

“Here and now DEFA should work, everyone should take their responsibility”, he added.


For the budget of the RES and EXE Fund, Mr. Hatzigiannis said that there is a huge reserve of consumer money, which the Government is trying to use for social policy purposes.

He added that something like this it is not fair nor right and that the “Photovoltaic for All” Scheme should have been from the state coffers. He also noted that the priorities should be how fast rates are achieved. The priorities, he said, are how fast rates of transition to renewables can be achieved and how renewables can come to reduce prices.

Source: 24h.com.cy

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