Finance minister ‘not quitting’ over interconnector concerns

Finance Minister Makis Keravnos on Monday waved off the notion he might quit over lingering concerns he has regarding the mooted Cyprus-Greece electricity interconnector.

Speaking to the ANT1 television channel, the minister attributed reports of his potential resignation to ‘gossip’.

“I’m not in the habit of threatening to resign, rather I express my concerns and my assessments,” Keravnos said.

“The decision [regarding the interconnector] is a collective one, it is not a decision solely for the finance minister to make. There are many aspects to this, it is a matter for the government as a whole.”

The minister was being asked to comment on the progress, or lack thereof, of the Great Sea Interconnector – the subsea electricity cable linking Cyprus to Crete. It is a project co-financed by the European Union.

But Keravnos did reiterate his concerns over the project. He spoke of a number of ‘gray areas’ which need clarity.

One such ‘gray area’ relates to the financial feasibility of the project. The government is waiting on the European Investment Bank (EIB) to assess the proposal. Asked when they expect the feedback from the EIB, Keravnos could not say.

Another concern has to do with the geopolitical risk, namely possible interference with the laying of the cable by the Turkish navy.

“There is the issue of Turkey, and how it will react to this. Here there needs to be a serious guarantee, because any obstruction to the pace of implementation of the project, amid an agreement that does not benefit consumers, would create severe problems both to the economy and to consumers.”

Last week the European Commission provided assurances in writing that it would “use all the diplomatic means at its disposal” to protect the Great Sea Interconnector.

Meantime according to daily Politis, a conference call between the interested parties – Greece, Cyprus and the European Commission – actually took place last Friday, rather than this Monday as media had earlier telegraphed.

Lasting hours, this discussion merely reconfirmed the deadlock, the paper said.

In terms of financing for the project, end of August is seen as a crucial deadline. By then Nexans – the manufacturers of the subsea electricity cable – expect to receive from the project promoter a ‘final notice to proceed’. By issuing such a notice to the contractor, the project promoter would undertake full liability for the entire amount of the €1.4 billion estimated cost of the cable.

But the promoter has concerns that it cannot undertake such liability unless and until a steady revenue stream is guaranteed. Greece’s energy regulator has agreed that Greek consumers will pay a fee towards the construction of the project starting in January 2025. However, Cyprus’ own energy regulator argues that Cypriot consumers should not chip in before the cable goes live – expected in 2030.

The Cypriot regulator is under pressure to revise that decision.

Financing for the Crete-to Cyprus segment of the interconnector is split at 33 per cent for Greece, 67 per cent for Cyprus.