
ECONOMIC NEWS FEBRUARY 2025
06/02/25
ENERGY NEWS
The Minister of Energy, Trade and Industry, George Papanastasiou, pointed out that energy is connected to everything and is a key topic of discussions worldwide, noting that strength lies in unity. Cohesion and cooperation between EU member states are needed to address the challenges.
He was speaking at the 14th Athens Energy Summit. He also noted the environment of uncertainty created by the new US policies and the wars, with Europe being affected because its heavy industry cannot be competitive. He also said that discussions are underway with the Egyptian government on the exploitation of the gas fields in the Cypriot EEZ.
ECONOMIC NEWS
Cyprus remains among the Eurozone’s five most expensive countries for both housing and consumer loans, according to December data from the Central Bank of Cyprus.
Housing loan interest rates rose to 4.75% in December 2024, up from 4.50% in November, significantly above the Eurozone average of 4.15%.
Consumer loan rates increased to 7.20% from 6.99%, while business loans up to €1 million rose to 5.11% from 5.01%.
Despite political pressure on banks to reduce borrowing costs, including a December 2024 gentleman’s agreement between the government and two systemic banks, rates continue to rise.
The Bishobric of Limassol submitted an environmental study for a project costing €379 million. It includes the establishment and operation of a University, various primary and secondary educational institutions, research and development centers, cultural centers and other facilities.
Eurobank Cyprus has renewed its cooperation agreement with Cyprus Seeds, a non-profit organisation focused on the commercialisation of innovative academic research.
Cyprus betting revenues €292 million rose 13 per cent year-on-year during the third quarter of 2024.
05/02/25
ENERGY NEWS
Cyprus has concluded exploration activities in blocks 2, 3 and 9 of its Exclusive Economic Zone (EEZ) after licenses expired without renewal, as Korean state firm Kogas exits the region.
Energy Minister George Papanastasiou confirmed that investigations failed to identify commercially viable natural gas deposits in these areas. The development sees Kogas, which held 20% rights in the three blocks, departing from Cyprus’s EEZ.
Italian energy giant Eni, which led the consortium, will continue operations in blocks 6, 7, 8 and 11 in partnership with French firm Total.
Cyprus plans to sell the entire output from one of its two offshore gasfields, Chevron’s Aphrodite, to Egypt which has recently seen its own output decline and in order to meet drastically rising local demand.
According to the Middle East Economic Survey, Egypt is set to sign two deals in Cairo on February 17 that it hopes will help secure gas from the two offshore Cyprus gas discoveries that are closest to development: the Chevron-operated 3.5 tcf Aphrodite, and the Eni-operated 2.5 tcf Cronos.
Philenews reported that a new round of discussions on the Cyprus-Crete electricity interconnection will be held tomorrow in Athens by the Energy Ministers of Cyprus and Greece.
This time, everyone’s attention, including the two ministers, is focused not only on the technical and legal issues pending regarding the interconnection project, but mainly on Turkey’s apparent intention to prevent the carrying out of surveys in maritime areas that it arbitrarily claims fall within its continental shelf.
As the Greek media have written many times in recent days, the Greece is very concerned about the indications it receives from the Turkish Government, according to which the research off Crete and Kasos, even without falling under the so-called Turkish-Libyan memorandum, will each time cause the departure of Turkish warships, which will require the Italian company carrying out the research to request and receive permission from the Turkish Authorities.
The talks will also cover the serious technical and financial pending issue concerning the transfer of the project from ADMIE to the subsidiary company Great Sea Interconnector, in which there is an intention from the Cypriot Government to purchase share capital.
At the previous meeting it was agreed that the Greek Minister, in collaboration with ADMIE, would prepare and send to the Cypriot Minister a detailed position of the Greek side on the points raised.
Those points of objection had come from the legal due diligence study, by Curtis, Mallet-Prevost, Colt and Mosle LLP, which act as external advisor to the Republic of Cyprus.
That study warned, among many other things, the Government that if it purchases share capital in GSI, it would be embroiled in an economic adventure with very negative consequences.
The letter by the Greek Minister has not yet been sent yet.
It should be noted that the publications (initially by Bloomberg) about a comprehensive agreement between ADMIE and rench investment fund Meridiam, for the Fund to purchase 49.9% of the current share capital in GSI, had no follow-up.
Unconfirmed reports state that the new president of the Cyprus Energy Regulatory Authority (Polis Lemonaris), with other colleagues, will also have contacts with the Greek Energy Regulatory Authority (ERA) and ADMIE.
Cyprus lost 167,000 megawatt hours of renewable energy in 2024 due to a lack of storage facilities, MPs were told, as households continue to face soaring electricity bills.
MPs on the House energy committee expressed disappointment over the wasted power, which could have been used during peak demand. They also criticised the government for failing to develop a strategy to store and distribute energy.
ECONOMIC NEWS
The legal framework for assigning a study on the future of Larnaca’s port and marina is currently being prepared by Cyprus’ attorney general’s office. This was confirmed by Larnaca Mayor, Andreas Vyras.
He said that the city has accepted the decision of President Christodoulides to assign the study to Greece’s port planning authority. The decision was made through a Cyprus-Greece state agreement.
Vyras stressed the need to complete the study quickly so a new investor can be found. He also raised the possibility of state-funded development.
Vyras also responded to recent criticism from former transport minister and current President of the Famagusta District Local Government Organisation (Yiannis Karousos) who accused him of not reacting strongly enough to the loss of the investment.
The mayor rejected the claims, stating that the municipality did everything possible to support the project. He emphasised that legal rulings had to be respected.
Despite Cyprus’ relatively modest trade volume with the US, the island could still experience indirect effects of US tariffs on European goods, warned Sofronis Clerides, professor of economics.
Clerides explained that while the direct impact on Cyprus might be limited, the broader economic slowdown caused by these tariffs could still affect the country.
Deputy Minister of Innovation Nicodemos Damianou met Greek Minister of Digital Governance Dimitris Papastergiou at the Cyber Intelligence Summit in Athens.
According to an official announcement, the meeting aimed to strengthen cybersecurity cooperation.
3.2.2025
Philenews reported that the procurement and installation of equipment deemed necessary to be added to the Prometheus ship, so as to be certified in the future as a floating storage and regasification unit for liquefied natural gas (FSRU), could require 8 months.
This means the plan of transporting it to a foreign terminal, so that it can be certified or rented, has been significantly limited. Also, it seems the chances of the natural gas terminal being able to operate in a year from now are very limited.
A project manager for the project needs to be appointed who will then need to appoint a contractor.
The upcoming agreement expected to be signed between Cairo and Nicosia for the transfer of the two Cypriot deposits, ‘Kronos’ and ‘Aphrodite’, to Egypt, is a natural continuation of the excellent relations between the two countries said the Minister of Energy.
Philenews reported that the Electricity Authority took the first step towards installing an electricity storage system in Dhekelia and it has reportedly committed that it will cover the cost of installing the batteries from its cash reserves. It has already published a tender.
Energy analyst Charles Ellinas in an op-ed notes that as the development of Cyprus gasfields gets closer, so the claims about their importance in supplying Europe’s gas needs get louder, totally oblivious to whether Europe needs such gas, and, of course, how oil and gas companies make investment decisions and where the most likely markets for the gas is.
Foreigners buying properties at a rapid pace will be discussed by the House interior committee, after concerns have been lodged that the sales are proceeding unchecked to the highest bidder.
Land acquisition by non-Cypriots is approaching a third across all districts.
The long and short term social and financial impacts of the trend are to be examined and solutions sought, MPs said, after data revealed that as many as 72 per cent of sales made in Paphos (56 per cent of sales went to third-country nationals and 16 per cent to citizens of the EU) over the past ten years, were to foreigners. In Limassol, Larnaca and Famagusta, the number of foreign sales approached 50 per cent while in Nicosia it is 15%.
Among the issues raised was the fact that ongoing purchases by foreigners are driving up property prices and creating a housing crisis for the locals.
Other concerns are the lack of background checks on buyers and the lack of criteria for touristic developers.
Despite the fact that the citizenship by investment scheme has been abolished, “golden visas”, whereby property buyers automatically acquire permanent residency, still exist.
The Cyprus Architects’ Association called for stricter controls and immediate amendments to laws governing the establishment and operation of tourist facilities.
The announcement follows concerns raised by MPs over unchecked investments by foreign individuals and companies.
Its intervention was prompted by reports regarding the development of a hotel in the Paphos area – understood to be the Israeli Fattal Group’s investment in Latsi – which has been plagued by multiple legal violations.
The association referenced the “general upward trend of tourist developments without the required permits, in violation of urban planning and environmental regulations.”
Nineteen European Union countries, including Cyprus, are calling for the European Investment Bank to boost lending for the defence industry.
The EIB, owned by EU governments, is not allowed to finance the production of ammunition, weapons or military equipment. To remove the prohibition, a majority of governments have to agree and some countries have expressed misgivings.
There was a 5.4 per cent increase in average gross monthly earnings for Cyprus employees in the third quarter of 2024, reaching €2,351, compared to €2,230 in the same period of 2023.
40 per cent of employees earned under €1,500, while 39 per cent earned between €1,500 and €2,999.
12 per cent earned between €3,000 and €4,499, 6 per cent earned between €4,500 and €5,999, and 4 per cent earned more than €6,000.
Some note that the impressive & disproportionate increase in the number of non-Cypriot employees (by 79.1%) and their average earnings (by 47.8%) from 2017 to 2023 (in some economic activities) creates the distorted impression of a general welfare of employees.
In an interview the DG of the Research & Innovation Foundation (Theodoros Loukaidis) said that Cyprus is among the top startup ecosystems worldwide. It is home to 12 universities, 9 research institutes, 7 Centers of Excellence and 500 startups, with more than 3,500 researchers and 4,000 people employed in the high-tech sectors. Since 2016, it has allocated €206 million to support R&I, supporting more than 510 beneficiaries.
12 per cent earned between €3,000 and €4,499, 6 per cent earned between €4,500 and €5,999, and 4 per cent earned more than €6,000.
Desalination plants will work on a continuous basis to help relieve the pressure on the dams and provide farmers with water, Agriculture Minister Maria Panayiotou said. Until now, the plants operations have been dependent on weather conditions.
Efforts are also underway to employ mobile desalination plants.
After a record-breaking year in 2024, extending the tourist season, enriching the tourist product and developing new markets are the goals for 2025, deputy minister of tourism Costas Koumis said. New markets are those that Cyprus does not receive large numbers from and with which there are no direct air connections – the US China and other Central Asian countries.
Philenews reported that many large Greek companies, which have invested in various sectors of the economy, are showing great interest in the Cypriot market. Over 1,500 companies of Greek interests are active in Cyprus.
Bank of Cyprus announced it would cut its ECB-linked base lending rate to 2.90% from 3.15%, effective from 5 February 2025, following the European Central Bank’s recent monetary policy decision.
The 0.25% reduction is expected to benefit approximately 12,000 borrowers through lower monthly repayments. An additional 8,000 borrowers with Euribor-linked loans are already experiencing rate relief, as the Euribor has declined to 2.59%.
Superhome Centre has been sold to Vasilitsi Diy Ltd for €94 million.
Ermes Department Stores, a subsidiary of the Cyprus Trading Corporation, held 51 per cent of the store’s shares while 49 per cent was owned by Secora BV, a Dutch-registered company.