Cypriot minister not optimistic about cable project with Greece amid Turkish intimidation

Cypriot Minister of Finance Makis Keravnos said the Great Sea Interconnector (GSI) project still faces very serious political obstacles. He highlighted the pressure from Turkey, alongside the financing disputes with Greece regarding the EU-backed bilateral investment to lay an undersea electricity cable that would connect the two countries.

Following a second incident this month when Turkish navy intimidated ships researching the seabed, Minister of Finance of Cyprus Makis Keravnos expressed doubt in the feasibility of the Great Sea Interconnector (GSI). It is a project to connect his country’s electricity system with Greece’s through Crete, by laying a cable under the sea.

“I can’t say I’m optimistic, especially when there are still very serious political obstacles, namely those posed by Turkey,” the official said, as quoted by domestic media. Namely, Turkish corvette TCG Bartın has approached Ievoli Relume and NG Worker, Italian vessels conducting research for the interconnection, in international waters just north of Crete.

GSI investment concerns now have to be addressed

Nevertheless, a recent due diligence study by a hired foreign consultancy showed the draft bilateral deal heavily favors Greece’s Independent Power Transmission Operator (IPTO or, in Greek, Admie). The authors warned of an “unnecessary additional layer of risks for any equity investors in GSI.”

Keravnos said the document confirms his concerns and that they must be discussed. While the two sides are working to overcome their financing dispute, the project is suffering delays, increasing the risk of cancellation.

Keravnos said in October that the total cost could well surpass EUR 2 billion. The Crete-Cyprus part is substantially leaning on funding from the European Union. The idea was to later extend the interconnector to Israel.

Turkey has been obstructing both GSI surveys and hydrocarbon exploration around Cyprus. There were several incidents involving gunboats.

Cyprus craves interconnections, flexibility sollutions

Meanwhile, Cyprus is struggling to maintain the stability of its isolated electricity system. Oil-fired power plants are increasingly working near their upper limits in peak hours. Conversely, storage capacities, flexibility systems and digital controls are needed for mitigating the pressure on the grid at times of weather-induced jumps in the production of wind and solar power, but also sharp drops.

It is the only noninterconnected country in the European Union. Moreover, Cyprus has no access to natural gas yet.

GSI was formerly known as EuroAsia Interconnector.