31/03/25

ENERGY NEWS

The completion of drilling at the ‘Electra’ field in Block 5 of Cyprus’ Exclusive Economic Zone (EEZ) has been pushed forward for a few days due to minor delays caused by geological pressures affecting the drill rig, Energy Minister George Papanastasiou said.

Politis reported that the advent of natural gas will also bring a structural change to the domestic energy market. For the first time there will be conventional electricity production by a private company, giving impetus to the substantial opening of the electricity market to competition. George Chrysochos, CEO of Power Energy Cyprus (PEC), that belongs to Cyfield Group, in an interview notes that the company at will bring cheaper electricity and competition. Regarding the Great Sea Interconnector, he expressed serious objections to the project, characterizing it as a political project with limited economic viability. He was also critical about how the implementation of the project in Vasiliko has evolved.

Cyprus will cut value-added tax (VAT) on electricity bills from 19 per cent to 9 per cent for nearly 494,000 households starting from April 1. President Christodoulides had revealed the tax reduction measure some weeks ago, marking his administration’s two-year anniversary. The reduced VAT rate will remain in effect for one year, until March 31, 2026.

ECONOMIC NEWS

Philenews reported that Cyprus is now prosecuting five cases of Greek Cypriot property usurpation in the occupied territories. The most recent arrest is a Ukrainian national, facing 33 charges including conspiracy to commit a felony, conspiracy to defraud, and fraudulent transactions involving immovable property belonging to others. The four other cases currently involve five defendants, including two Hungarian estate agents,  Simon Aykut, a German woman, and a young Israeli national, with the case against Aykut being described as the most significant.

 A common denominator in these cases is that the defendants were involved in property transactions in illegal developments in the same areas, with some cases sharing the same defence lawyers, suggesting possible connections between them.

This marks the first time since the 1974 Turkish invasion that the Republic of Cyprus has responded with such determination to property usurpation. In the 50 years since the invasion, only one case has been tried with a prison sentence imposed, while another case against a Turkish Cypriot lawyer was withdrawn after a key witness died.

Cyprus has shown resilience in the face of successive economic shocks, with growth remaining among the highest in the euro area (3.4% in 2024), according to the International Monetary Fund (IMF).

Growth has been supported by foreign investment, strong tourism, and a boom in the ICT sector. The economy is showing modest signs of overheating with growth expected to moderate to around 2.5 per cent this year. Inflation will stabilise at 2 per cent.

The fiscal position is good with a surplus of 5.8 per cent & a public debt of 65 per cent. External risks include potential trade conflicts affecting Cyprus’ main trading partners, regional tensions, and energy price shocks. Domestically, risks include possible economic overheating and fiscal policy loosening.

President Nikos Christodoulides has defended his government’s economic policies and dismissed opposition criticism of public sector hiring as well as a recent warning from the International Monetary Fund (IMF) regarding the cost of the state payroll. 

The public payroll plus pensions and bonuses for public sector employees took up 35 per cent of total state expenditure in 2023 (€3.2bn) and was the highest percentage in Europe. This year the public payroll will exceed €4bn.

President Christodoulides announced that a long-awaited agreement concerning Larnaca Port would be signed in April with Greece’s Hellenic Republic Asset Development Fund (HRDF). The agreement aims to optimise the port’s use for economic and social benefits.

Cyprus recorded a gross domestic product (GDP) per capita slightly below the European Union average in 2024, with purchasing power at 95% of the EU mean, according to Eurostat.

Cyprus joined France, Italy, Spain, Czech Republic and Slovenia in a group of countries falling less than 10% below the EU average.

A protest was held on Saturday, organised by Akel’s Social Alliance movement and supported by the Green party.

The rising cost of living, a pressing issue for many Cypriots, was at the heart of the protest. A key point of contention is the introduction of the “green taxation” set for May. The organisers of the protest argue that this tax will exacerbate the financial difficulties faced by citizens who are already struggling with low wages, a housing crisis, and the relentless rise in the prices of everyday essentials. AKEL Secretary General said that two out of three citizens either cannot make ends meet or struggle dramatically.  

Hotels in Cyprus can obtain permits for small-scale desalination units within a week and install them before the peak tourist season, the Water Development Department (WDD) said, responding to concerns about bureaucratic delays after a new scheme was announced.

Philenews reported that according to Odysseas Michaelides, the recent announcements concerning the tax reform constitute a renovation, not a radical change. Regarding taxation of individuals, instead of supporting the low and middle income class, high earners are supported. Shareholders of banks and RES companies that made super profits are proving to be the big winners. There is complete absence of changes to VAT, which is a tax that mainly affects low-income groups.

28/03/25

ISRAEL RELATED

Philenews reported that the resumption of flights connecting Paphos International Airport with Israel after (two months) is the major concern of the tourism industry in Pafos.

Although initial reports spoke of a resumption of tourist flows from mid-March, this was postponed to early April and tourism operators are now awaiting developments.

According to info., there seems to be a ‘cloudy scene’ on the whole issue, with doubts being expressed more and more openly by local operators as to whether Tel Aviv has indeed lifted the doubts it expressed regarding security issues and as to whether the tourist flow from Israel will indeed have Paphos as its main destination from now on or whether it will become the Republic’s second airport, complementary to Larnaca on these routes.

Until the exact data is confirmed in practice next week, the schedule shown on company websites of the country’s airlines shows that EL-AL will return to Paphos from April 2 with four flights per week.

Air Haifa will start its flight schedule from Haifa to Paphos on April 1 with six flights per week, while there is nothing official yet for Israir. Arkia, on the other hand, had announced a return to Paphos from mid-March with five flights per week, which has not happened to date.

In addition, Ryanair is expected to operate 18 flights per week from March 30, while TUS will have eight flights to Paphos International Airport.

The Israeli market is currently the second largest market in Cyprus, which, according to statistics, is a year-round market and on average Israelis travel more than once a year, which is why the Paphos tourism department observes with obvious concern the ongoing impasse on the issue.

ECONOMIC NEWS

Media reported that Cyprus is bracing for a tough summer as the risk of water cuts remains high, despite new government measures aimed at tackling the ongoing water scarcity issue.

The government called for “a collective effort” to tackle the effects of the drought and the coming water shortages, also announcing a subsidy scheme to get hotels to run their own desalination units.

The government’s long-term solution involves two new permanent desalination plants, which are expected to begin operation in late 2029 or 2030.

Other measures include an allocated budget to repair Cyprus’s outdated water supply network, aimed at reducing water losses.

Currently, the Water Development Department (WDD) has in its hands proposals from 53 economic operators that have expressed interest in the development of floating desalination units, which will be placed at strategic points on the coasts. 13 proposals promise to install the units in Cyprus in less than six months. These proposals come from Cyprus, Greece, Israel, Italy, Norway and Spain. For the remaining 40 proposals, the response time for the operation of units is from 10 months to 24 months and come from these 6 countries as well as the following:

Belgium, Germany, France, Malta, China, United Arab Emirates, Saudi Arabia and Bahrain.

Procedure are also underway for installing temporary desalination plants.

Kathimerini reported that Cyprus has the potential to become a key hub for seaplane routes, both domestically and across the Eastern Mediterranean, according to Nikolas Charalambous, President and CEO of Hellenic Seaplanes.

The company is closely monitoring developments in the Middle East and awaiting the right conditions to introduce the first seaplane to Cyprus.

26/03/25

ENERGY RELATED

Under a legislative proposal tabled by Disy MP Kyriacos Hadjiyiannis, cutting off photovoltaic systems – those used for own electricity consumption, not commercial solar parks – would be prohibited.

Government agencies have been urged to come back with their written remarks by the end of the week, in a bid to fast-track the legislation so that it can go to the House plenum for a vote before the Easter holiday break.

ECONOMIC NEWS

Ex-Disy President Averof Neophytou said that the Government did not approach the tax reform issue with the required diligence. Its proposals essentially leave out of the picture those who really need it the most: middle- and lower-income households.

The proposed reform also brings foreign-owned companies to approximately the same denominator as Cypriot companies and they will have approximately the same tax burden.

This means that Cyprus will no longer be considered a low tax country. But on the other hand, by increasing corporate tax to 15%, Cyprus will be able to make new bilateral agreements to avoid double taxation with more countries. This is because some countries have a clause that they can conclude such agreements with countries where the corporate tax is at least half the rate of their own.

The latest version of the so called ‘financial protocol’ was signed between Turkey and the occupied north, considered according to Turkish-Cypriot media reports, to be a major development in further strengthening ‘the political and financial ties between the two sides’.

Turkey will be funding development works and implementing a number of projects this year.

The deal is in the region of half a billion euros.

Transport Minister Alexis Vafeades has expressed confidence that the construction contract for the much-anticipated highway connecting Paphos to Polis Chrysochous will be awarded by October.

The project is expected to attract interest from Cypriot contractors, as it falls within the capabilities of several local construction firms.

Regarding the Larnaca marina development, he said funding has already been allocated for dredging and renovation work.

The €1.5 million project is set to be tendered this week, while the transport ministry continues its study on the future development of the Larnaca port and marina.

Philenews reported that the Holy Synod of the Church of Cyprus has approved a request from Kykkos Monastery to develop a big plot of land it owns in Nicosia.

The mixed-use development in Engomi will include residential, tourism, commercial, recreational, office, educational, and medical facilities, along with public green spaces and community equipment.

Household spending has seen a significant increase, according to the latest Household Budget Survey by the Cyprus Statistical Service. 

The average annual consumption expenditure per household reached €43,263 in 2023.

This marks a 38.6 per cent rise compared to the €31,206 recorded in 2015-2016.

The ferry service connecting Cyprus and Greece will operate for a fourth consecutive year, with the Cyprus-flagged vessel “Daleela” scheduled to begin its 2025 season on May 31 from Limassol port.

24/03/25

INBNews reported about a planned big residential development project in Larnaca which is a strategic collaboration of three leading forces in the sector, Astrea International Properties (company based in Greece), Aroundtown Property Holdings PLC and Prosperity Group.

ENERGY RELATED

The coming week is expected to be important regarding the drilling of the “Electra” target of block “5” in the Cypriot Exclusive Economic Zone (EEZ).

The results of the drilling by the Exxon Mobil-Qatar Energy joint venture are expected to be announced by the end of this month.

Energy Minister George Papanastasiou said: “We keep a small basket, the coming week is important.” Despite the positive indications that seem to exist, the Minister referred to the completion of the process in order to draw safe conclusions.

The Oxford Institute of Energy published an analysis entitled “Cyprus natural gas production can help stabilize Egypt’s energy balances” and refers to the agreements recently signed in Egypt, considering them very important.

The Minister of Energy will be in the United States between 2 and 8 April to participate together with the President of the Republic in an investment conference in New York. The aim is to seek investors in the energy, shipping and innovation sectors.

Meetings will also be held with ExxonMobil and Chevron.

Philenews reported that delays persist in Vasilikos LNG perminal project as negotiations continue. Hopes for finalising a contract with a major European company to oversee the completion of the terminal have not materialised, the state natural gas infrastructure company (ETYFA) and the government have confirmed. But some progress been made on the remaining construction work at the terminal’s jetty. Negotiations with potential project managers are ongoing and once a contract is secured, the appointed firm will assess completed and pending works before preparing tender terms for sections of the jetty’s top side and the terminal’s onshore infrastructure. ETYFA is reportedly moving towards directly awarding jetty construction work to two subcontractors who previously worked under the Chinese-led CPP consortium. A delegation from CPP recently visited Cyprus, exploring the possibility of returning as the project’s main contractor. However, sources indicate there is no such prospect.

The need for the European Union to take an active role in addressing the economic and geopolitical challenges of the Great Sea Interconnector (GSI) electricity interconnection project was underlined by Energy Minister George Papanastasiou.

He noted that although the technical challenges of the project appear to be covered by the specialized company that has undertaken the project, finding investors is affected by economic and geopolitical issues, which the Implementing Entity and the European Union are called upon to manage. The Minister recalled that both he and the Greek Minister of Environment and Energy intervened in the recent EU Council of Energy Ministers, asking Europe to take a central role in the management of projects of strategic importance such as the GSI.

An op-ed by energy analyst Charles Ellinas notes that electricity prices must come down and not just wait for natural gas to come. Low energy prices are a necessary condition to improve the quality of life of Cypriots and the sustainability of the economy.

Strengthening interconnections between member countries is also crucial for reducing prices

ECONOMIC NEWS

The Police have made a new arrest of a Ukrainian national for the embezzlement of Greek Cypriot properties in the occupied North.  Philenews reported that he is linked by police investigators to Simon Misriel Aikut, of the Afik Group. The Ukrainian advertised properties in the occupied areas, including residential units that are part of a project by the Afik Group. Testimonies show that he advertised a specific development of the said Group via a website. This is the largest “project” of the Afik Group in Trikomo, which is called CAESAR RESORT. The Afik group appears to have proceeded with the construction of 5,700 units there, of which it advertised that it had sold over 5,000. Afik Group’s developments in the occupied territories had a total turnover of hundreds of millions of euros & Simon Misriel Aykut faces a total of 242 charges for the usurpation of 60 plots of land owned by Greek Cypriots.

Politis & the Cyprus Mail reported that efforts to mitigate the country’s water shortage are intensely focused on the rapid acquisition of desalination plants. However, there are questions about how quickly the plants can be built given their cost, as well as to how water procured will be allocated, accounted for and managed. Israel is referred to as an example, a world leader in desalination where its five plants supply about 75 per cent of urban water. A new plant will soon ensure that 90 per cent of supply for drinking, agriculture and industry comes from desalinated seawater, and this is expected to rise to 100 per cent in future years. There is also a central wastewater treatment plant and the water is used for irrigation mainly in the arid south of the country. Israel also ensured that water losses in the system are very low, close to 3%.  In Cyprus, the volumes of water lost from leakage and unaccounted is estimated to be up to 50 and 20 per cent respectively. Cyprus’ five large desalination plants and 24 smaller units built to date satisfy 70 per cent of demand with the rest sourced from processed reservoir water. Two new planned permanent units and four mobile units, are expected to ensure 100 per cent of Cyprus’ non-agricultural needs will be covered for the upcoming decades.

Central Bank of Cyprus (CBC) governor Christodoulos Patsalides highlighted the country’s economic transformation in recent years, while also outlining the challenges that lie ahead.

Speaking at a joint conference he stressed the need for sustainability, innovation, and inclusiveness in shaping Cyprus’ economic future.

A key focus of his speech was the transformation of the banking sector, which he described as a pillar of economic stability.

He also made reference to the country’s budget surplus of 4.5 per cent of GDP in 2024 as evidence of its commitment to fiscal responsibility.

Furthermore, he noted the trajectory of public debt, which stood at 61.9 per cent in January 2025, reinforcing Cyprus’ progress toward long-term financial stability.

The Secretary General for International Economic Relations and Extroversion of the Ministry of Foreign Affairs of Greece and President of Enterprise Greece, Dimitris Skalkos noted in an interview, about repaid efforts to create a single economic area between Greece and Cyprus.

Public-private partnerships (PPPs) can lead to major investment opportunities and change the development landscape to the benefit of both the government and private organisations, according to Invest Cyprus CEO Marios Tannousis.

With this in mind, Cyprus will host the leading international conference ‘Unlocking Investment Through PPPs’ on March 26 and 27, 2025, which aims to highlight and explain the opportunities that public-private partnerships can create. 

A €170 Million expansion has started at Larnaca and Paphos airports to boost capacity and passenger experience.

17/03/25

ISRAEL RELATED

Politis hosted an interview with Shlomi Kofman, VC of the Intl. Relations Division at the Israel Innovation Authority

Title: “Innovation and the cooperation between Cyprus-Israel”

Main points: 

• He refers to the role of the Innovation Authority, how it works and the Start-Up  Nation.
• He is optimistic about the potential of cooperation between Cyprus-Israel and there are things that Cyprus can learn from Israel’s experience.
• EU programs offer benefits for both and there have been successful cooperations already with such programs.
• The challenge for small countries is attracting funds for startups. But when there is excellence in R&D, investments come. 

ENERGY RELATED

The Cyprus Mail reported that Cyprus is facing a deepening energy crisis as homeowners who invested in solar power find themselves repeatedly cut off from the grid. Despite the government’s strong push for renewable energy adoption, the electricity authority of Cyprus (EAC) has been remotely shutting down residential solar panels due to an oversupply of energy. This issue exposes serious contradictions in Cyprus’ energy strategy. While the government encourages solar energy adoption, it has failed to provide the necessary infrastructure to support users once they invest. Experts say the situation is the result of poor planning and regulatory failures.

Cyprus’ newly proposed national hydrogen strategy has been put forward for consultation, aiming to align the country with the European Union’s broader hydrogen goals.  However, according to energy professor & former chairman of the Cyprus Energy Regulatory Authority Andreas Poullikkas, the plan lacks the necessary depth, clear targets, and concrete implementation measures needed for a robust national strategy.

The Electricity Authority of Cyprus has issued an expression of interest for the supply of batteries, in view of the project planned to create a central energy storage station.

The next step will be the announcement of tenders and subsequently, the creation of the first central energy storage station.

ECONOMIC NEWS

George Pantelides is the new President of the Federation of Employers and Industrialists, as no other candidates had submitted interest.

The Federation of Employers & Industrialists announced that at the Annual General Meeting on May 7, 2025, Antonis Antoniou will have completed two consecutive two-year terms as President of the Federation, the maximum allowed. 

Media reported that he has universal support from the entire business world and a firm believer in utilizing human resources, the biggest competitive advantage of Cyprus.

He is head partner of the Consulting Services Department and Chief Strategy Officer of Deloitte Cyprus

should responsibly and reliably handle the major challenges of business. 

Natasa Pelidou (an ex-Minister of Energy & Commerce) has been appointed CEO of Med Energywise Ltd, part of Petrolina holdings (Lefkaritis Bros).

Med Energywise has acquired the ExxonMobil Cyprus retail trading activity, which deals with the supply, distribution and marketing of petroleum products through its fuel stations network.

Tourism Deputy Minister Kostas Koumis announced a record-setting year for Cyprus’ tourism sector, with over 4 million visitors and revenues exceeding €3 billion.

Philenews reported that Cyprus is facing one of the most serious water crises in its history.

According to  scenarios being developed by the Department of Water Development, the island’s dams are expected to be empty by the end of 2025, leaving the country facing severe shortages.

The situation is becoming even more worrying as demand for water increases, while rainfall remains insufficient and climate change exacerbates the already tense situation

Kathimerini reported that Greek businesses are continuing to make their mark, with a growing number of companies looking to expand and partner with Cypriot firms.

A Business Forum was organized recently with 20 Greek and 60 Cypriot companies participating from a variety of sectors. Over 1,500 companies of Greek interests are already operating in Cyprus.

13/03/25

ENERGY RELATED

President Christodoulides announced a reduction in VAT on electricity prices for domestic consumption from 19% to 9%.

He made the announcement while reviewing the government’s work for 2024.

The President also said that the govt. has proceeded with targeted actions to utilise natural gas in the EEZ with the signing of two important agreements in Egypt for commercial exploitation of natural gas, while drilling is in progress with results expected in the coming days.

Philenews reported that a Cypriot company has launched a pilot data center in Limassol, which, in addition to the services it provides, wants also to examine the possibility of absorbing green energy that is rejected by the electrical system.

ECONOMIC NEWS

President Christodoulides, while reviewing the government’s work for 2024 said that Cyprus recorded one of the highest rates of growth in the Eurozone at 3.4 per cent of its gross domestic product last year.

He also made reference to the multiple ratings agencies which have upgraded Cyprus’ credit rating to an ‘A’ grade in recent months and that Cyprus is approaching the target of reducing its rate of public debt to 60 per cent of its GDP. The unemployment rate of 4.9 per cent is the lowest it has been since 2008.

In Cyprus, over €1.2 billion worth of Russian assets have been frozen, as part of Europe’s broader effort to block Russian assets amid ongoing sanctions. However, most of these assets are not physically in Cyprus. Only a small portion is in cash or local assets; the majority of the €1.2 billion is managed through funds and services outside the country.

According to Kathimerini, the Cyprus Securities and Exchange Commission (CySEC) has been actively investigating these assets.

In addition to investigating Russian asset movements, CySEC’s AML department reviewed 510 reports from compliance officers and internal audits submitted by financial companies. These checks are part of Cyprus’s ongoing effort to improve its money laundering prevention measures.

In 2024, CySEC imposed €2.76 million in penalties, with most fines targeting companies in the investment sector. Over the past three years, sanctions have totaled €7.82 million.

10/03/25

ISRAEL RELATED

Kathimerini reported that Cyprus’ long-awaited “Iron Dome,” the Barak MX anti-aircraft defense system, is now fully operational, significantly bolstering air defense capabilities.

24News has confirmed that the system is functioning smoothly, with technical setbacks and global conflicts playing a role in the installation’s initial delay.

ENERGY RELATED

Greece’s dependent transmission system operator ADMIE’s decision to temporarily suspend payments to French technology company Nexans for the manufacture and installation of submarine cables for the Great Sea Interconnector is “understandable”, Energy Minister George Papanastasiou said. “in the context of the technical, fiscal, and geopolitical risks inherent to the project”.

Additionally, he said that depth surveys had been completed and that Nexans is “continuing normally with their production” despite the halt in funding. 

ADMIE had not yet delivered to Nexans a “full notice to proceed”, Papanastasiou said. Doing so would immediately make ADMIE fully responsible to deliver €1.4 billion to Nexans for the task. 

In view of the multiple risk factors, ADMIE had elected to make monthly payments to Nexans, of which the latest one due had been paused, Papanastasiou said. 

He added that the temporary pause in payment could be read as a bid by Admie for additional support from “key players”, including Israel, the EU, and the United States.

ADMIE to date has paid Nexans about €200 million while the next installment of €70m had been due on February 28. In the event that Nexans decides to trigger a compensation clause should the project stall, ADMIE would have to reimburse the European Union for €160m in funds already disbursed. 

President Christodoulides and French President Macron discussed the implementation of the Great Sea Interconnector on the sidelines of Thursday’s European Council summit.

The electricity authority (EAC) has been given the clear go-ahead to upgrade the Dhekelia power plant with two new flexible generators and is in the process of evaluating tenders, Energy Minister George Papanastasiou said. 

Negotiations are underway at the European Union level as to who will pay for the investment, with the European Commission suggesting that the entire cost had to be borne by EAC customers, while the state had pushed for it to be borne by all grid users, regardless of if their energy is directly supplied by the EAC. 

Despite arguments that the estimated at €150 million cost was high, “the cost of a backout would be much higher” Papanastasiou warned. 

Local residents have already staged a protest against the installation.

Philenews reported that frustration is mounting among citizens who have installed domestic solar photovoltaic systems, as their energy production is being cut off for power grid stability reasons.

Indicative of the situation is the initiative taken by a group of citizens to organise a protest in early April outside the Presidential Palace.

An op-ed by energy analyst Charles Ellinas notes that Cyprus is totally unprepared for the age of electricity.

Over 35 per cent of energy bills goes on taxes.

ECONOMIC NEWS

The Interior and Finance Ministries are preparing to tap into the European Investment Bank’s newly announced €10 billion housing initiative to address the island’s growing housing affordability crisis.

The Interior Ministry intends to initiate dialogue with the EIB to clarify the operational framework of the announced platform and develop a proposal to utilise European funds.

A significant rise in German tourists visiting the occupied territories of Cyprus is expected in the coming months, according to statements by the so-called “minister of tourism” Fikri Ataoglu.

Germany remains the largest source of tourists for the occupied territories.

Out of 741 tourist units preparing to reopen in Cyprus, only 100 have secured a licence (13.5%).

Politis reported that a company that had participated in the previous tender in 2024 for the lease of helicopters for firefighting purposes and was excluded, was awarded a new bid in 2025 for the same purpose.

06/03/25

ENERGY RELATED

Former Justice Minister Ionas Nicolaou who represents renewable energy producers has called on Energy Minister George Papanastasiou to implement a new subsidy scheme for energy storage systems.

He argues that this will enhance the integration of renewable energy into the national grid while maintaining competitive electricity prices.

The government recently chose to issue a grant scheme for storage installation in renewable parks, but only for those maintaining power purchase agreements with the Electricity Authority of Cyprus (EAC) at predetermined prices. This decision excludes parks that continue to produce and sell energy within the transitional electricity regulation.

ECONOMIC NEWS

The tax package announced by the Government does not meet the expectations of society and has not satisfied it. This emerges from a survey (2,583 people) conducted by Philenews.

Asked whether they are satisfied with the increase in tax-free income from €19,500 to €20,500, the overwhelming majority (71%) answered negatively.

They overwhelmingly agree with the increase in corporate tax from 12.5% to 15%.

Kathimerini reported that despite the European Central Bank (ECB) preparing for its sixth interest rate cut since June 2023, bank profits in Cyprus have soared, marking two consecutive years of record earnings. While 2023 was already considered a milestone year, with total bank profits slightly exceeding €1.1 billion, 2024 has been even stronger, approaching €1.2 billion.  Bank of Cyprus recorded the highest earnings, reporting €508 million in profits for 2024. This rise was mainly due to higher interest rates.

Hellenic Bank profits reaching €382.6 million in 2024 and Eurobank Cyprus (part of Eurobank S.A. in Greece) reported profits of €210 million.

According to the mayor of Paphos, two construction companies that were involved in the €1 million bribery scandal in the Paphos Sewerage Board some years ago, and their directors-owners were not punished either criminally or disciplinary, have created an absolute monopoly in the asphalt (premix) sector. As a result, they monopolize State projects regarding the construction and maintenance of roads. The companies are  Cyfield (formerly Nemesis) of Kyriakos Chrysochous and Iacovou Bros (Iacovou Brothers). According to the mayor, the two companies share State projects (after agreements between them), as a result of which they have profits of tens of millions of euros annually.

Tourists from Israel, Lebanon and other Middle Eastern countries are freely entering the Republic of Cyprus, gambling in casinos in the occupied north, and declaring their winnings to customs authorities without any issue arising.

The revelation came during a session of the House Institutions Committee.

Finance Minister Makis Keravnos expressed his full support for the re-establishment of the cooperative banking sector in Cyprus on a stable and sustainable basis.

During a meeting with the board of the Pancyprian Cooperative Association, Keravnos welcomed their initiative, which is spearheading the creation of the Pancyprian Cooperative Bank.

05/03/25

ISRAEL RELATED

Philenews reported that the Ministry of Transport’s negative response to the proposal of Prosperity Group CY, a shareholder of the former contractor for the alleged €1.2 billion investment in the Larnaca port/marina project, which requested the revival of the agreement in order to continue the project, was not a surprise. Although the response was related to the legal aspects of the proposal, in essence no one appeared willing to risk a possible new failure of the project, which would cause strong reactions in Larnaca.

The Minister of Transport, explaining the reasoning behind the decision, said that it was on the principle that a shareholder of a company is not the company itself. Prosperity cannot apply for the reinstatement of a contract that is held by someone else, namely Kition”. He indicated that this decision “does not prohibit the company from submitting bids in the future” for a marina and port.

The Municipality and other Larnaca bodies were informed of the decision.

The CEO of Prosperity Group CY, Panos Alexandrou, did not hide his disappointment with the decision, who argued that the proposal concerned an agreement with Kition, but with a new shareholding structure. “We will discuss the matter internally to decide how to handle it,” he noted.

The attention now focuses exclusively on the plans that have been announced and especially, on the decision to assign the study for the two infrastructures to the Greek Port Planning Authority of the Hellenic Republic Development Fund (HRADF).

All open issues will be discussed in a broad meeting next Monday.

ENERGY RELATED

An additional €200 million was requested by the Natural Gas Company (DEFA) from the Ministry of Finance to complete the natural gas terminal project at Vasiliko.

Speaking before the Parliamentary Energy Committee, the representative of the Ministry of Finance stated that the ministry is considering the request for state support or the granting of loans to DEFA in order to complete the project.

The requested amount would supplement the original €289 million contract value.

The Minister of Energy Giorgos Papanastasiou said the goal is the completion of the terminal by the end of the year.

The FSRU ship is in Malaysia, where it had an inspection so as to be considered an FSRU. Two issues need improvement and components installed.

In relation to the pier, decisions will be taken for pending issues in the next few days while regarding land projects, new tenders will be required.

The European Public Prosecutor’s Office began investigating nine new criminal cases for Cyprus in 2024, with four of them relating to the construction of the natural gas import terminal in Vasilikos.

According to its Annual Report, the total number of criminal cases is 12, as three other cases are under investigation (began between 2023 and 2021). The estimated damage for the 9 cases amounts to 572 million euros, while in total, for all 12 active investigations, the estimated damage reaches 583 million euros. Among the cases under investigation, in addition to the Vasiliko terminal project, is a case of alleged cross-border fraud for non-payment of VAT, with an estimated loss of 10.5 million euros, as well as cases of fraud and misuse of European funds.

Cyprus will begin implementing renewable energy storage systems in 2026 at the earliest, Energy Minister George Papanastasiou announced during a parliamentary discussion.

The planned battery storage infrastructure, to be installed between 2026 and 2030, will have a total capacity of 160 megawatts with the capability to store renewable energy for 2-3 hours.

Electricity Authority of Cyprus (EAC) Chairman George Petrou announced ongoing tender processes for installing storage systems at the Dhekelia power station

Electricity Market Association Chairman George Chrysochos claimed current government subsidy schemes exclude significant market segments while favoring the EAC.

Renewable Energy Association President Fanos Karantonis advocated for hydrogen storage technology investment.

Philenews reported that private producers of electricity from commercial photovoltaics will fight a tough battle to overturn an EU Directive through which a request by the Christodoulides Government to grant the Republic a derogation was approved, so that the Cyprus Transmission System Operator (TSO) can manage central electricity storage systems, outside the competitive electricity market, for security and balancing purposes of the system.

Philenews reported that two major players in the renewable energy sector have reached a significant agreement for the sale and supply of solar-generated electricity.

HAFFNEVE HOLDING LIMITED, owned by the Zorpas Group, has agreed to sell 23 megawatts of photovoltaic parks to Bioland, a key producer and supplier of green electricity. The deal is pending approval from the Commission for the Protection of Competition.

The total installed capacity from renewable sources in Cyprus currently approaches or exceeds 900 megawatts.

Once finalised, the agreement is expected to strengthen Bioland’s position in the soon-to-be liberalised electricity market, while allowing HAFFNEVE HOLDING LIMITED to focus on developing and operating new solar farms to meet the growing energy demands of its factories and retail outlets across the country.

ECONOMIC NEWS

Tourism revenue in Cyprus saw a significant year-on-year increase of 17 per cent in December 2024.

For the entire year of 2024, total tourism revenue amounted to €3.2 billion, representing a 7.3 per cent rise compared to €2.99 billion recorded in 2023.

The average per capita expenditure of tourists in December 2024 was €653.27, reflecting an 8.7 per cent increase.

British tourists, who formed the largest market segment, accounting for 23.7 per cent of total arrivals in December 2024, spent an average of €64.12 per day.

Israeli visitors, the second-largest group with a 17.4 per cent share, had a significantly higher daily expenditure of €162.55.

Meanwhile, Polish tourists, making up 9.4 per cent of total arrivals, spent an average of €72.17 per day.

The Cypriot economy is projected to have grown by 3.4 per cent during 2024, in real terms.

The positive growth is primarily driven by a number of sectors. These include hotels and restaurants, information and communication, construction, and wholesale and retail trade.

The Association of Large Investment Projects, during a recent meeting with the Minister of Foreign Affairs, presented its recommendations on the role of the private sector in the economic diplomacy strategy promoted by the Ministry of Foreign Affairs.

20 per cent of workers in Cyprus were classified as low-wage earners in 2022, compared to 14.7 per cent across the European Union, according to a report by Eurostat.

The Law Office of the Republic has rejected a proposal by the deputy tourism ministry to cap the number of short-term rental properties a person or company can register in Cyprus. However, discussions on the issue are still ongoing.

The move was part of an effort to regulate the booming short-term rental market, including properties listed on platforms like Airbnb. The ministry had proposed limiting each individual or company to a maximum of two properties in the self-catering accommodation register.

04/03/25

ISRAEL RELATED

Philenews reported that Prosperity Group, through a letter in August 2024, requested from the Government to reinstate the Concession Agreement for the development of the port and marina of Larnaca, not to the original contractor, Kition Ocean Holdings Ltd, but to itself, which is a minority shareholder in the company. According to the Minister of Transport, Communications and Works Alexis Vafeadis, Prosperity’s request must be examined based on the legal framework and no decision will be made before the legal implications of the possible revival of the contract are assessed. The question that arises concerns the legality of the reassignment of a terminated contract to a new company, which, although a shareholder of the original company, has no legal participation in the project. Therefore, the request, according to the Minister, cannot be examined further.

In addition, the issue of the need to sign a new agreement arises and the Minister of Transport does not intend to examine the issue without first following the correct procedures.

When this is clarified, there will be a consultation with the local community.

The Ministry, in collaboration with the Legal Service, continues to prepare the documents for the assignment of the study for the Larnaca port-marina project to the Private Public Property Development Fund of Greece.

At the same time, the Government is proceeding, in collaboration with the Municipality of Larnaca, with external development projects that were not included in the previous procedures.

ENERGY RELATED

Energy Minister George Papanastasiou has been invited to appear before the House energy committee today to update members on energy storage, hydrogen development and the liquefied natural gas (LNG) import terminal in Vasiliko.

On February 14, 2025, the energy ministry launched the electronic application process for the Energy Storage Grant Scheme, which supports storage systems combined with renewable energy projects. For the LNG import terminal, the Minister has stated the infrastructure must be completed by the end of the year, with the floating storage and regasification unit (Fsru) “Prometheus” positioned at the terminal and ready for operation. The Fsru vessel is still moored in Malaysia, where it’s undergoing technical inspections and was expected to remain there for about two to three months.

President Christodoulides has called a meeting today, in the presence of the Minister of Energy and the leadership of the Electricity Authority ,during which the current electricity generation capabilities and its prospects for the coming years (before and after the expected arrival of natural gas in Vasiliko) will be discussed. The Government is supporting the installation of two new gas turbines at the Dhekelia station, as well as storage systems, to support the network, despite complaints from private electricity producers. It is possible that EU officials may reject the Cypriot request to cover the 150 million euro cost by charging all consumers.

ECONOMIC NEWS

Kathimerini reported that Cyprus is preparing to implement its first major tax reform in over two decades, aiming to modernize the tax system, boost competitiveness, and align with international standards. While the government’s proposals have been broadly welcomed by businesses, the plan has also sparked controversy over its perceived shortcomings, particularly regarding low-income households and income inequality. The reform is set to be completed by August 2025, with legislation expected to take effect in early 2026. The new framework aims to simplify the tax code, correct long-standing distortions, and increase the state’s tax collection capacity. Key changes include an increase in corporate tax rates, adjustments to individual income tax brackets, and the abolition of the controversial deemed dividend distribution. One of the most important aspects of the reform is the rise in corporate tax from 12.5% to 15%.

Invest Cyprus has welcomed the recent announcements from the government regarding the country’s tax reform, highlighting its potential to further enhance the nation’s attractive tax system.

Left-wing Dialogos reported that the purchase of real estate in Cyprus by foreigners has reached large proportions, with many gaps in the legislation and in the registration of who these buyers are. “What will be the future of the country when the country’s urban centers are rapidly passing into the hands of wealthy foreign citizens”?

The tripartite cooperation between the government, employers and employees has led to significant economic benefits during the first two years of President Nikos Christodoulides’ administration, Labour Minister Yiannis Panayiotou said.

He was speaking after a meeting between the president and trade union leaders. Panayiotou also highlighted the role of social dialogue in boosting employment and increasing wages and outlined key timelines for major labour policies. The renewal of the cost-of-living allowance (CoLA) agreement is scheduled for June 2025, while the national minimum wage decree is set for revision in January 2026 and pension reform bills will be submitted to parliament before the end of this year.

He acknowledged differences in perspectives between trade unions and employers on certain issues.

The submission of bids for the Paphos Mobile Desalination Plant is expected today. The implementation of the project will take place within a period of four to seven months.

Philenews reported that the walled city of Nicosia is “dying slowly”, according to its shopkeepers. In 1994 there were 680 businesses in the area compared to approximately 130 operating today. Of these, 80 businesses are managed by locals while the remaining approximately 40 are managed by foreigners.

Kathimerini reported about a Cyprus Marine and Maritime Institute project that uses small, high-tech underwater drones to keep an eye on artificial reefs designed to help marine life thrive. These autonomous underwater vehicles, or AUVs, are the future of ocean monitoring, offering scientists a way to protect and study these reefs without the need for big, expensive equipment.

Cyprus’ chief scientist Demetris Skourides was presented with the Global Leader award during the 2025 Global Business Conclave awards ceremony in London.