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.