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Monday, May 20, 2024
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The connection between Crete and Cyprus is closer

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The results of the cost-benefit study of the electrical interconnection are positive

Πιοτηδσδεσ Κρτς τηνΚyρο /></p> <p> Cyprus has committed to its equity participation in the Great Sea Interconnector project, setting as a prerequisite the reconfirmation of its viability, through a new cost-benefit study. </p> <p><em><strong>Chrysa Liangou</strong></em></p> <p>Cracks of light are visible in the new impasse that has arisen with the implementation of the Crete-Cyprus interconnection and after the ADMIE was appointed as the implementing body and project promoter of the project, which was renamed the Great Sea Interconnector.</p> <p>A series of prerequisites in order to “unlock” the funding seem to be on track and finalized in May. ADMIE is expected to request a meeting from the Cypriot government to present to it within the month the first results of the cost-benefit study of the interconnection, which according to information are positive.</p> <p>The EIB will review its decision to finance the project with 500 million euros. </p> <p>The results of the study are estimated to pave the way for the participation of the Republic of Cyprus in the share capital of the Great Sea Interconnector and its financing with an amount of up to 100 million euros from the Recovery Fund. Cyprus has been committed since February for its equity participation in the project, setting as a prerequisite the reconfirmation of its viability, through a new cost-benefit study which it was initially going to do last autumn, but finally referred it to ADMIE.</p> <p>The same study will be the “key” for the financing of the project by the EIB, with which ADMIE is in technical discussions. The EIB will review its decision to finance the project with 500 million euros, which it had rejected during the period under the control of the Cypriot businessman Savvas Ktoridis, evaluating the first positive elements of the new cost-benefit study and on the side of ADMIE there is optimism about the result.</p> <p>Meanwhile, the plenary session of the competent energy authority (RAAEF) is expected to approve tomorrow the revenue methodology of the project proposed by ADMIE with minor variations. ADMIE has recommended amortization of the total construction cost of the interconnection amounting to 1.9 billion euros over 25 years, with RAAEF reportedly extending the period to 35 to 37 years to limit the burden on consumers.</p> <p> < p>It should be noted that the cost of the project will be recovered from the consumers of Greece and Cyprus through network usage fees at a ratio of 37%-63% respectively, as already agreed.</p> <p>RAAEF is said to be accepting and the administrator's proposal to cover possible geopolitical risk – that is, consumers should continue to pay fees in case of delays caused by a geopolitical obstacle, which cannot be excluded in the sensitive transit zone of the electric cable.</p> <p>With the approval of the revenue methodology by the FSA tomorrow, it closes an important prerequisite for the financing of the project by commercial banks. What remains is the approval of the common revenue recovery methodology proposed by ADMIE and by the Cyprus Energy Regulatory Authority (CERA), which according to information reportedly questions the need for a new methodology, referring to the methodology it approved by its decision in 2023. CERA also allegedly does not accept ADMIE's request for a common revenue recovery methodology from the Regulatory Authorities of Greece and Cyprus, which for ADMIE is considered necessary to ensure the smooth flow of revenue on an annual basis and, respectively, payments to suppliers and contractors.</p> <p>For ADMIE, securing the regulatory framework, which in this case means the approval by the regulatory authorities of the two countries of the common methodology it has proposed, is necessary for the commercial banks to open lines of credit, as was found in the first strikes it made for financing. </p> <p>Pending the decisions of the regulatory authorities and the Cypriot government, ADMIE has stopped payments to counterparties, with the French Nexans that has undertaken the construction of the cable raising the issue of work stoppage. After a first unofficial warning before Easter, Nexans in an official letter informed the ADMIE two days ago that if it is not paid the installment of the outstanding April and the following May, on June 1st it will proceed with a suspension of production of the submarine cable.</p> <p>The developments are closely monitored by the E.U. which has approved €657 million in funding for the project. In a teleconference held before Easter with the involved agencies of Greece and Cyprus, DG Energy asked for the acceleration of the procedures to unblock the emblematic interconnection, which will bring Cyprus out of energy isolation.</p> </p> <p><noindex></p> <div class=Source: www.kathimerini.com.cy

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