A Strategic Energy Project Caught in a Storm
The ambitious Greece–Cyprus electricity interconnection project, known as the Great Sea Interconnector (GSI), has sparked a serious rift between Athens and Nicosia. At the heart of the dispute lies a clash between IPTO (Independent Power Transmission Operator) and Cyprus’ energy regulator RAEK over the financing and cost recovery of the multi-billion euro project — a clash now threatening to derail a venture of major geopolitical and energy significance.
Emergency Meeting Called by Mitsotakis Amid Growing Tensions
Greek Prime Minister Kyriakos Mitsotakis has called an emergency meeting at Maximos Mansion on Sunday at 17:00, following sharp statements and media reports in Cyprus alleging that IPTO plans legal action over payment issues. The meeting includes the leadership of the Ministry of Environment and Energy, as well as IPTO’s top executives.
Tensions escalated after a report from philenews.com claimed that IPTO submitted a “bombshell letter” to Cyprus’ RAEK, demanding much higher compensation than the €25 million annual payment agreed for 2025–2029. The report suggests IPTO seeks immediate recognition of €251 million in incurred costs.
IPTO has categorically denied these claims, stating it only seeks what was agreed: the €25 million payment for 2025, and no more, as part of a broader €1.9 billion investment to be recovered over a 35-year depreciation period.
Cypriot President Launches Harsh Attack on IPTO
President of the Republic of Cyprus, Nikos Christodoulides, responded sharply to the report, stressing that a framework agreement exists between the Greek and Cypriot governments and that any deviation by IPTO is “unacceptable and not reflective of official policy.”
In a pointed statement, Christodoulides warned:“If the head of IPTO thinks the Cypriot government can be blackmailed through such letters or sponsored media placements, he clearly doesn’t know who he’s dealing with. The Cypriot government does not take orders from any IPTO executive.”
He further clarified that the Greek government is not responsible for IPTO’s correspondence and reiterated the shared commitment to the project, referencing their recent joint statement from New York in September, following a bilateral meeting with Prime Minister Mitsotakis.
The Core Dispute: When and How Costs Are Paid
The conflict centers on the timing and structure of cost recovery. Under the July 2024 framework, Cyprus committed to pay €25 million annually until 2029, while the rest of the costs would be recovered after the cable becomes operational, through electricity tariffs shared in a 63–37% ratio between Cyprus and Greece.
However, reports suggest IPTO has filed an objection to RAEK’s July decision, demanding full recognition of €251 million in past expenditures, arguing that the amount approved — €82 million, with €25 million recoverable in 2025 — is insufficient and inconsistent with Greek regulator RAAEY’s assessments.
IPTO maintains that its objection is within its legal rights and that its only aim is to ensure regulatory consistency and transparent cost recovery across both national jurisdictions.
Turkey’s Role and the Delay in Seabed Surveys
Beyond the regulatory dispute, geopolitics looms large. Cypriot diplomatic sources point to Turkey’s maritime claims in the region southeast of Crete — a key stretch for the cable’s route — as an external risk factor. Additionally, the Greek government has delayed issuing NAVTEX for seabed surveys, holding back necessary technical steps for the cable’s installation.
With Norwegian manufacturer Nexans already progressing with production, time is of the essence. Delays could not only jeopardize the timeline but also increase the financial burden and geopolitical uncertainty.
Legal Challenge on the Horizon
Should RAEK reject IPTO’s objection, the Greek operator has the right to appeal to the Cyprus Administrative Court— a move that could trigger an unprecedented legal confrontation between two EU member states over a flagship European energy project.
This would mark the third time IPTO has taken legal action against RAEK decisions, further straining intergovernmental coordination. IPTO’s majority shareholder is the Hellenic Republic, which adds a layer of political sensitivity to the situation.
A European Project on Fragile Ground
The Great Sea Interconnector is not just a bilateral project — it’s a key part of the EU’s energy security and transition strategy. With Brussels already having committed €657 million, its failure would send shockwaves through European institutions.
But without swift political resolution, coordinated regulatory action, and a shared long-term vision, the project risks being undermined by internal mistrust, bureaucratic gridlock, and external geopolitical pressure.
The coming weeks will be critical. What’s at stake is not only a cable — but a symbol of energy solidarity and integration between Greece, Cyprus, and Europe.
Source: pagenews.gr