- Cyprus has approved a €1.9 billion undersea electricity cable project to link its grid with Greece. The project is expected to reduce consumers’ electricity bills by up to 40%.
- Funded in part by a €657 million EU contribution, the project aims for completion by 2029 and may eventually extend to connect with Israel’s electricity grid.
Cyprus has approved the construction of a €1.9 billion ($2.1 billion) undersea electricity cable to connect its power grid with Greece’s, a significant step aimed at reducing electricity bills and ending the island’s energy isolation. Energy Minister George Papanastasiou announced that the European Union will contribute €657 million ($735 million) toward the project, emphasising its importance for energy stability and economic growth.
The Cypriot government will allocate €25 million ($27.8 million) annually over five years to fund its project share, ensuring that taxpayers won’t face increases in their electricity bills. This contribution, totalling €125 million, will be financed through EU emissions trading system revenues.
Once completed by the end of 2029, the approximately 900-kilometer (560-mile) cable is expected to lower electricity bills for Cypriot consumers by up to 40%. While an additional €36 will be charged on Cypriot electricity bills to cover the cable’s operational costs, officials assure that this will be offset by the substantial savings achieved through the project. Consumers will share the cable’s operational expenses equally in Cyprus and Greece.
With a projected return on investment of 8.3%, the project attracts interest from potential investors, including the US and UAE’s energy and water companies. Cyprus is also considering becoming a stakeholder in the parent company managing the cable once it is operational.
The cable is designed to last approximately 35 years and may eventually extend to connect with Israel’s electricity grid. Israeli Energy Minister Eli Cohen has highlighted the project’s significance, calling it a “top priority” to enhance energy security in the region.
The Cabinet’s decision comes after weeks of negotiations between Cypriot officials and Greece’s Independent Power Transmission Operator to address construction risks and financial viability. These risks include potential delays from third-party interference, prompting the Cypriot government to distribute its €125 million contribution in increments.
Nexans of France has been contracted to build the undersea cable, while Siemens of Germany will handle the onshore transformers. Although the cable’s route has been mapped, further surveying may be necessary in challenging subsea terrain to ensure its protection. This ambitious project will reshape Cyprus’s energy landscape and foster more significant economic development for its citizens.