The European Investment Bank (EIB) may finance the Cyprus-Greece electricity interconnection project, said EIB Vice President Kyriacos Kakouris, indicating that the project will be evaluated primarily from a technical perspective to determine its eligibility for a loan.
In statements on the sidelines of a loan agreement signing ceremony with the Minister of Finance, the Mayor of Paphos, and the Cyprus University of Technology, Kakouris confirmed that a cost-benefit analysis, submitted by project operator IPTO, was under review and will soon be finalized. The results of this analysis will play a key role in the Republic of Cyprus’ final investment decision, which includes a potential €100 million equity injection into the special purpose vehicle managing the project.
In response to questions, Kakouris confirmed that the EIB received the cost-benefit analysis from both IPTO and the Minister of Finance around the end of July, and a confirmation of the assumptions regarding the energy plans of the Republic of Cyprus had been requested. He added that while the government has provided responses, the EIB has requested additional information, mainly regarding the project’s financial planning, which is currently being assessed by the bank’s services.
“The study has not been completed yet, but I am assured that it will be finalised soon, considering developments in both Cyprus and Greece,” said Kakouris. He also noted that the EIB’s decision would be made well before the end of the year.
When asked if the EIB has changed its cautious stance on financing the project, Kakouris said that the study submitted in July was largely the same, with updated assumptions, and that the EIB’s decision will be based on technical evaluations of the proposal.
EIB monitoring Cyprus LNG terminal situation
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Kakouris was also asked about the EIB’s position on the financing of the liquefied natural gas (LNG) terminal in Vasilikos, which has collapsed and is under investigation by the European Public Prosecutor’s Office. He confirmed that the EIB had funded the project, highlighting its importance for Cyprus’ economy and energy efficiency.
“It is unfortunate that a project of such significance has reached this point,” Kakouris said, adding that the bank was closely monitoring developments on a weekly basis, staying in contact with both the Ministry of Finance and the project’s contractor, ETYFA.
The EIB, he concluded, “remains committed to supporting the projects it finances, as long as their intended purpose remains intact”.
