26/09/24

The Ministry of Environment and Energy of Greece has filed to Greek Parliament the amendment that includes the arrangement for the equal sharing of geopolitical risk between Greece and Cyprus, for the Great Sea Interconnector.

The regulation is included in the draft law of the Ministry of National Economy on public investments, ” which is scheduled to be voted in Parliament today.

To resume offshore surveys and advance construction of the cable, the two regulatory authorities will need to revise the Joint Decision on Cross-Border Project Cost Allocation (CBCA). This must be completed by Monday, September 30, in order for ADMIE to send Nexans the “Full Notice to Proceed”, with which it will be definitively committed to the obligations deriving from the contract amounting to 1.4 billion euros.

The government announced it would terminate electricity subsidies and reinstate VAT on 11 product categories from October, citing reduced inflation and energy costs as reasons for ending these cost-of-living support measures.

25/09/24

Philenews reported (from Capital.gr) that Greek and Cypriot energy regulators have approved €550 million in recoverable revenues 2024-2025 for the implementor of the Interconnector, clearing a major regulatory obstacle.

The implementor was asking for 48 million euros concerning expenses made by the previous owner of the project (EuroAsia) but the two regulators agreed to allow ADMIE to recover only 12 million euros. Recoverable costs of €287m for 2023-24 and €201m for 2025 were approved for the construction of the cable. For the voltage conversion stations , recoverable costs were approved, for 2025, amounting to 47.5 million euros, It is currently estimated that the voltage conversion station project will cost 375 million euros.

This decision paves the way to issue a full notice to proceed to cable manufacturer Nexans.

The €550 million will be recovered over 35 years, with Cyprus covering 63% of expenses and Greece 37%.

Under the agreement, Cyprus will pay €125 million by 2029, with the remainder to be collected gradually after the interconnection becomes operational. Greece’s expense recovery is set to begin in 2025.

With the regulatory framework and economic viability now established, attention has shifted to attracting investors for the project, which has already garnered significant international interest.

The United Arab Emirates, through energy firm TAQA, has expressed interest following a memorandum of understanding (MoU) signed between IPTO and Cyprus last year.

Discussions are underway for the creation of a joint Cypriot-Emirati company to participate in the interconnection’s share capital.

France has also shown keen interest, with infrastructure specialist Meridiam signing an MoU with the implementor in June regarding potential entry into the project’s shareholding.

The US state fund DFC has indicated its intent to acquire a 10% stake in the project, while Qatar has also been mentioned as a potential investor.

ADMIE is expected to launch an open call for investors in the coming months, with the project’s economic and geostrategic importance potentially attracting additional interest.

One of the issues discussed between Prime Minister of Greece Kyriakos Mitsotakis, President of France Emmanuel Macron and President Christodoulides, that s met on the sidelines of the 79th UN General Assembly, was the Interconnector.

Kyriakos Mitsotakis and Nikos Christodoulides informed Emmanuel Macron about the progress of the project of that is of European and French interest.

Left-wing opposition AKEL, has raised concerns over potential additional costs to the state stemming from the Vasiliko natural gas terminal project, which could amount to approximately €550 million.

In a letter to the Finance Minister, AKEL’s Parliamentary Representative, Giorgos Loukaides, cited recent media reports that Cyprus may need to repay €220-230 million to European financial institutions by the end of the month. Additionally, the European Commission is demanding the return of a €73 million grant. The letter also highlighted a reported €230 million required to complete land-based works at Vasiliko and resolve issues with the consortium.

These potential costs come on top of the €250 million already paid to the Chinese consortium without the delivery of the floating natural gas regasification unit “Prometheus”.

AKEL expressed further concern about possible additional expenses arising from claims at the London Arbitration Tribunal.

The opposition party also pointed to the indirect costs borne by Cypriot households and businesses through greenhouse gas emissions permits. Since January 2019, €958.5 million has reportedly been spent on these permits.

Loukaides requested confirmation of these figures and sought details on the government’s plans for completing the project, including timelines and potential infrastructure restoration costs.

Cyprus experienced varied price movements across essential consumer goods in August, with 18 basic products showing monthly increases, 25 decreasing, and two categories remaining unchanged, according to the latest Price Observatory report from the Consumer Protection Service.

The inflation rate continued its downward trend, falling to 1.5% in August from 2.1% in July and 2.7% in June. This moderation was attributed to decreases in petroleum products (-1.24%) and electricity (-0.6%), which offset significant increases in the food sector.

Food inflation stood at 2.38% for the January-August 2024 period compared to the previous year, driven by a 4.5% monthly increase in agricultural products and a 6.8% rise year-on-year.

Notable price hikes were observed in vegetables and herbs (41.7% month-on-month) & fresh meat (4.1%).

24/09/24

A video conference call was held on Monday between the respective energy regulators of Cyprus and Greece and the project promoter for the electricity connector.

The object of the call was to discuss Admie’s proposal for its expenditures going forward (capital expenditures and its operating costs for the years 2024 and 2025).

The talks follow a memorandum of understanding agreed, green-lighting the electricity interconnector.

Energy Minister George Papanastasiou said the talks were part of the standard process & any expenditures the promoter makes need the ok from the regulators.

Asked about the participation of the Cypriot state itself as a shareholder in the project, he said the matter is still under consideration.

Philenews reported that the regulators have approved approximately 550 million euros in recoverable expenses, covering the 2024-2025 period.

These expenses do not constitute immediate revenue and full cost recovery will occur over 35 years.

Cyprus is expected to begin reimbursing by late 2025 or early 2026, starting with 25 million euros. The government has committed to providing 125 million euros by 2029, with remaining costs to be gradually recovered from Cypriot consumers once the interconnection becomes operational. Greek consumers will contribute to expense recovery from 1 January 2025 through a special charge. Under the cross-border cost allocation agreement, Cyprus will cover 63% of the expenses, with Greece responsible for the remaining 37%.

A delegation of United Arab Emirates’ company Taqa has reaffirmed its interest in participating in the Great Sea Interconnector.

The delegation met with President Nikos Christodoulides on the sidelines of the UN general assembly.

Christodoulides and Taqa agreed their delegations would be meeting over the next few weeks to draft a roadmap on the next steps.

In a recent interview, Christodoulides revealed that advanced consultations were underway to establish a joint company with the UAE for participation in the electrical interconnection’s share capital.

This development builds on a Memorandum of Understanding signed last December between Cyprus’s Ministry of Energy, Greek power grid operator ADMIE, and TAQA to promote investments in the Cyprus-Crete electrical interconnection.

EU member states share common goals of achieving climate neutrality and ensuring a sustainable, secure and affordable energy future, Energy Minister George Papanastasiou said at the opening of the 2nd MED9 ministerial meeting on energy.

The conference, taking place in Larnaca, welcomed energy ministers and representatives from Mediterranean EU countries.

He added that the region is uniquely positioned at the crossroads of Europe, Africa and the Middle East, making it a vital hub for energy cooperation and innovation.

The summit, he said, is an opportunity to exchange views and strengthen commitment to a greener and more sustainable energy landscape.

Philenews reported that police have referred a multi-million euro fraud complaint against a Greek Cypriot businessman to its Crime Combating Department (due to its complexity).

The case initially reported to Larnaca Police in early September, involves allegations of a €3 million fraud targeting Israeli investors in a property development scheme.

According to the complainants, the businessman, active in real estate, allegedly obtained funds from Israeli investors under false pretences for a land purchase in Larnaca that never materialised. The investors claim the money was diverted to other projects.

The fraud allegedly involved an escrow account in Israel, with funds to be released upon receipt of certificates from the Larnaca Land Registry department. The investors’ lawyer alleges these documents were forged.

Allegations include the businessman submitting and subsequently cancelling property sale documents at the Land Registry to obtain receipts for investor payments, as well as altering documents for tax purposes.

President Nikos Christodoulides appointed Andreas Papaconstantinou as the new Auditor General replacing Odysseas Michaelides who was removed from office last week.

He is a Certified Auditor and an Certified Internal Auditor with experience both in the private and the public sector.

The Cyprus Chamber of Commerce and Industry (Keve) and Invest Cyprus on Monday co-organised a forum that sought to promote the island as a place through which Lebanese businesses can gain access to the European Union.

The president of the Chamber welcomed the business delegation from the French-Lebanese Chamber of Commerce and Industry & pointed out the potential for trilateral cooperation between Cyprus, France and Lebanon.

There was also a presentation from the Deputy Minister of Research, Innovation, and Digital Policy and B-to-B meetings.

An op-ed by Les Manison (former senior economist at the International Monetary Fund, an ex-advisor in the Cyprus finance ministry and a former senior advisor at the Central Bank of Cyprus) notes that Cyprus has seen five natural gas discoveries since 2011 but none have been developed despite the presence of major energy. A major problem is the inability of Cyprus institutions to arrange and implement viable projects-Cyprus has weak institutions. The government has not been able to design an overall detailed energy plan and seems to bow to the pressures of politicians and special interest groups. There is a need to create an independent institution to study and evaluate the economic viability and risks of major projects. The poor relations of Cyprus with Turkey and the failure to resolve between them the dispute on what is the exclusive economic zone of the island, which contributes to the delay in efforts to exploit natural gas deposits and draft firm plans for the distribution of energy from and to Cyprus.

23/09/24

A Framework of Understanding between Cyprus and Greece, for the promotion of the Cyprus-Crete Electricity Interconnection, was signed between the Minister of Energy, Trade and Industry of Cyprus and the Minister of Environment and Energy of Greece last Friday.

Based on this Framework, and following the relevant decisions of the Regulatory Authorities of the two countries, the project is expected to restart in the next few days. 

The announcement notes that the Interconnection will contribute to the removal of Cyprus’ energy isolation.

Philenews reported about an interstate agreement. It notes the agreement was signed after a decision by the Cyprus Energy Regulatory Authority to change the regulatory framework last Friday. CERA adopted two changes. 1. The start of cost recovery from the implementing body from 2025 until 2029, with 25 million euros per year, which will be deducted from consumers but will be returned to them with a state subsidy, which will be made available through electricity bills. 2. The granting of a preferential rate of capital return (8.3%) to the implementing body is extended for 17 years. In the final text of the interstate agreement, there is reference to the changes made by CERA & the remaining decisions that must be taken by the regulators to amend the cross-border cost sharing (CBCA). In particular, the regulators are bound by the agreement to redefine the 50-50 of the assumption of costs by consumers in Cyprus and Greece, in case the project is aborted by an external factor or incident, without the responsibility of the implementing body. The current distribution is 63 for Cyprus and 37 for Greece. The amendment of the CBCA will take place after legislation is passed by the Greek Parliament, according to which the additional – possible – cost for consumers in Greece (13%) will be financed by the Greek State and not directly by electricity consumers. The request submitted by the Cypriot side for a 50-50 division of the potentially higher cost of the project, over the budgeted 1.94 billion, was not accepted by the Greek side and is not included in the agreement. Regarding the participation of Cyprus in the share structure of the Great Sea Interconnector, with 100 million euros, it is mentioned that the final investment decision will be taken after the due diligence study that will be launched by the Cypriot Government.

Almost all of the implementor’s requests have been satisfied but it has not yet made the final commitment to the cable manufacturer and warns that he will not do so unless the regulators approve its recoverable expenses for 2024 and 2025.

ADMIE lobbied hard last week to secure approval from the two regulators, but its claim was not met.

However, it is possible that this will be done today, during a teleconference.

One of the claims the regulators authorities are not willing to approve are the 48 million euros that was paid to EuroAsia Interconnector to purchase the interconnection project. Other requests for smaller amounts remain under evaluation.

The pressures exerted by the ADMIE on the two regulatory authorities, which are often accompanied by ultimatums, are deeply troubling, as they foreshadow continuous confrontations and disagreements in the coming years.

President Christodoulides spoke with his French counterpart Emmanuel Macron informing him about progress with regards to the interconnector in the context of French cable laying company Nexans’ participation in the project. Both agreed to hold an in-person meeting with Greek Prime Minister Kyriakos Mitsotakis on the sidelines of the United Nations General Assembly. Philenews reported that according to sources, the recent discussions between Christodoulides and the Greek Prime Minister highlighted that while the Interconnector project is a significant investment for Greece, its primary beneficiary would be Cyprus. The energy link is seen as crucial in ensuring Cyprus’s energy independence and avoiding reliance on Turkey. From Greece’s perspective, the project is politically and economically important, although technically unnecessary for the mainland.

Cyprus is in “advanced consultations” with the United Arab Emirates regarding the establishment of a joint company to participate in the share capital of the Great Sea Interconnector, President Nikos Christodoulides said. He added that there is “also interest” on the part of the United States and Qatar. On the potential involvement of the UAE, the US or Qatar, he was asked whether those countries will also be allies of Cyprus and Greece in the event of a threat from Turkey. He answered, “certainly, when they invest in such a project, they are also directly interested in the implementation of the project. The sovereign rights of the Republic of Cyprus and the Hellenic Republic will not be called into question. The project in question is subsidised to a very large extent by the European Union itself. It is a project of common benefit of the European Union. Neither Greece nor Cyprus are questioning our own sovereign rights, nor do we accept the Turkish claims.”

Philenews reported that the discussions specifically concern cooperation with UAE state-owned company TAQA. In December 2023 a Memorandum of Understanding (MoU) was signed with TAQA, together with the Independent Energy Transmission Operator of Greece (ADMIE), to promote investments in the Cyprus-Crete electricity interconnection. The cooperation between the two parties is necessary as TAQA’s investment alone in the electricity interconnection stumbles on the EU acquis, as the UAE state-owned company has huge investments in the generation and supply of electricity in EU countries and elsewhere. The Cyprus – UAE cooperation is likely to be done through a special purpose company, which will invest with a very significant percentage of shares in the Great Sea Interconnector. The Republic of Cyprus will participate with 100 million euros. The President of the Republic also pointed out the importance of the electrical interconnection project contracts, stating that a part of the project has not yet been signed (according to Philenews this is for the voltage conversion stations from Siemens) and the first drafts are awaited.

The European Investment Bank (EIB) is still open to investing in the electricity interconnector project between Cyprus and Greece, its Vice President Kyriacos Kakouris said. He stressed the project for the Great Sea Interconnector still needs to be evaluated, primarily from a technical viewpoint to assess its validity for loan. Nonetheless, answers should be ready soon & the EIB would be offering its official response much earlier than the end of the year. He specified the results will determine the final investment decision of the Republic of Cyprus to take on a share of capital.

Ex-Presidential candidate Andeas Mavroyiannis in an article noted that as regards the Interconnector, clear answer are needed to important questions. Some things have not been answered such as which other countries will participate and why has Israel who was a key part of the original planning not made any commitment? The project involves governments and public authorities and transfers the cost and risk to the citizen and the consumer. Ideally, and if economic viability is ensured, the whole project should been undertaken by private investors with the public sector limited to the creation of the appropriate institutional framework, the resolution of the legal issues and dealing with the geopolitical risk. The fragile situation in the region is also an issue.

Strengthening energy cooperation between the Med9 countries and promoting green energy will be the focus of this week’s ministerial meeting in Cyprus. Energy ministers from the alliance of nine Mediterranean and southern European EU member states, namely Croatia, Cyprus, France, Greece, Italy, Malta, Portugal, Slovenia and Spain will be meeting on September 23, in the framework of Cyprus’ presidency of the Med9.

The Turkish Minister of Energy, Alparslan Bayraktar, stated that their current operations are in the Black Sea but they will return to the Mediterranean.

Philenews reported that a serious fraud case of international dimensions by a Greek Cypriot businessman with activities in the real estate sector is being examined by the Cyprus Police. Complainants in the case are Israeli investors. The complaint, according to info., was officially made in the first week of September through an Israeli lawyer. The businessman is accused of securing large sums of money from investors with false representations. More specifically, the Greek Cypriot presented fake receipts related to actions with the Land Registry of Larnaca, so that the funds of the Israeli investors were released and came into his possession. However, as the complainants claim, not only was the money not allocated for the purpose of the investment, it was used by the entrepreneur for other projects. The complaining persons are four, while the total amount they claim was extracted from them with false representations reaches 3 million euros.

The Republic of Cyprus and the occupied north both expressed overall satisfaction with the Council of Europe’s committee of ministers’ decisions regarding developments related to the use of and compensation paid for Greek Cypriot-owned property in the north.

The Republics’ foreign ministry described them as “positive developments”, which “reaffirm that the violations of property rights identified by the [ECtHR], regarding the illegal use and exploitation of Greek Cypriot properties by Turkey in the occupied areas, continue to exist.” the north’s ‘foreign ministry’ focused on a specific  case, saying that the IPC, that has been established in the north, is an effective domestic remedy.”.

Philenews reported that foreign nationals accused of land seizure are selling their properties and leaving the occupied territories of Cyprus, driven by investment insecurity following crackdowns by the Cypriot authorities.

Among those arrested are a Turkish-Jewish businessman and a German national, both facing charges of land seizure. More arrests are anticipated.

This growing insecurity is reshaping the economic landscape of the occupied areas, which is experiencing significant pressure. Reports indicate that the majority of those fleeing are Russians, Ukrainians, and Israelis involved in substantial investments. Properties are being sold primarily to Turkish buyers, a trend that suggests Turkish officials are encouraging local investors to purchase Greek Cypriot properties from foreign nationals.

Finance Minister Makis Keravnos hailed rating agency Morningstar DBRS’ decision to give Cyprus a credit rating of BBB (high) and upgrade the island’s outlook from “stable” to “positive”.

Morningstar DBRS based their assessment of Cyprus on the reduction of its public debt, with the country’s public debt as a percentage of gross domestic product (GDP) falling from 99.3 per cent in 2021 to 77.4 per cent in 2023.

According to Morningstar DBRS, growth likely to continue to benefit from strong private consumption, rising services exports, and strong construction investment in the coming years.

Philenews reported that there has been a recent increase in registrations in the relevant registry of premises rented through the internet and platforms like Airbnb. Registration in the registry of the Deputy Minister of Tourism is mandatory by law, so that these properties can be advertised and, consequently, made available for short-term rental. However, a significant number of such properties continue to remain outside the registry. According to some estimates, around half of the accommodations advertised on various platforms, which some estimates put at around 15,000, are not registered.

17/09/24

The cabinet may (not verified) continue discussing the Great Sea Interconnector, with reports noting the government is now grappling with the issue of whether the Cypriot state will become an equity stakeholder in the company running the project.

But even if it is discussed at the cabinet meeting, it is unclear if any decisions would be made. It is also possible that only certain issues may be decided upon.

Philenews reported that the direct government financing of 25 million euros annually from 2025-2029 to recover implementation costs & extending the concession period for an 8.3% return on capital to the implementing body from 12 to 17 years may be approved today.

The ratio between the two countries for the provision of a geopolitical guarantee for the security of the project will be 50-50 has also been given the green light from Greece.

Media reports said a major pending issue relates to the Cypriot state’s participation in the holding company that would be established to run the interconnector project (up to €100 million –30 per cent of the shares). The govt. seems unready to decide this now so as not be criticized that it did not wait for the cost-benefit evaluation while the process of buying shares is time consuming also.

The government has twice invited tenders for a consultancy that would be tasked with assessing the cost-benefit analysis. To date, only one consulting firm DNV (Norway) has responded.

Philenews reported that the “hole” in the Vassiliko terminal project, the work on which was terminated a few months ago and a compensation claim process is ongoing at the Arbitration Court, is worrying the Ministry of Finance.

The state may be asked to put up to €500 to €600 million.

The Minister of Finance Makis Keravnos met with representatives of the coalition parties DIKO, EDEK and DIPA and informed them about the 2025 budget as well as the forecasts and fiscal risks with the which the economy may face. Despite the positive rates of the economy and the rise of economic indicators, the developments at the Vasilikos terminal are worrying. According to information, the additional costs that will arise for the Republic from the project in Vasiliko, as analyzed  by the Minister of Finance are as follows:

• By the end of the month, the Republic will have to return to the European Investment Bank or the European Bank for Reconstruction and Development a total amount of €220 to €230 million. This is money that was given as a loan for the project, with the Republic as guarantor.
• The European Commission demanded from the Cypriot authorities the return of €73 million, which it gave to the country as a sponsorship (out of a total of €101 million) for the construction of the project.
• It is estimated that another €230 million will be needed for the completion of the works on land in Vasilikos (pier and other infrastructure), as well as for other pending matters with the consortium.

The state has a reserve to cover the additional costs, through the surplus,

Regarding the budget for 2025, it is expected to be submitted to the Council of Ministers next Friday. The growth rate in 2025 will be around 4%, inflation around 2% and unemployment at 5%. Regarding the public debt, it is estimated to be 64% of GDP.

The transport minister has been fiercely criticized by yacht owners at the Larnaca marina, who are demanding a reduction in berthing fees and charges, following the termination of the agreement with Kition Ocean Holdings.

The reason are statements he made, comparing the marina to the rest of the marinas in the Republic, as well as some in Greece, as the one with the lowest fees.

Foreign investors in Cyprus are increasingly shifting their focus from luxury properties to more affordable housing, driven by a desire for residency permits rather than citizenship.

This shift, according to a report from real estate firm Danos, marks a significant change in the market dynamics. Geopolitical factors, particularly tensions in the Middle East, are expected to sustain interest from foreign buyers, especially from Europe and Asia.  

Despite the challenges of rising construction costs and new regulatory changes, foreign investors continue to show strong interest in Cypriot real estate.

The Cyprus Residency Programme, also known as the ‘golden visa’, remains a significant driver of foreign investment, offering residency permits to non-European citizens who invest in Cypriot real estate.  

A team of financial experts from the US Department of the Treasury’s Internal Revenue Service Criminal Investigation (IRS-CI), are in Cyprus to meet with counterparts from the Ministries of Finance, Justice, and the Cyprus National Police.

They will discuss emerging money laundering tactics and other financial crimes affecting both countries.

Cyprus’ competition watchdog has ruled that competition in the country’s banking market remains healthy, approving Eurobank’s acquisition of a 26.1 per cent stake in Hellenic Bank.

With the transaction, Eurobank now controls 55.3 per cent of Hellenic Bank shares.

The Commission for the Protection of Competition’s (CPC) decision was approved by a narrow 3-2 vote.

Philenews reported that while the construction of the new Paphos-Polis Chrysochous highway has faced delays, the project’s impact on land values and property prices is becoming increasingly central to discussions.

It is estimated that land values in areas close to the highway route will skyrocket.

The project involves the design and construction of a two-lane road initially from, with a length of 15.5 km and a cost of €86,845,010 (incl. VAT).

16/09/24

Sigmalive reported that consultations continue between Greece and Cyprus with the aim of reaching a final agreement on the matter of the Great Sea Interconnector.

Developments are expected in the next few days. The meeting of the President with the Greek Prime Minister on September 19, in Athens, is also considered an important milestone.

Due to the continuation of the discussions, the Minister of Energy, Trade and Industry canceled his trip to the USA, where he was scheduled to go to an energy exhibition.

According to information cited by Greek Economic Tahidromos, the agreement reached by Athens and Nicosia during the meeting last Tuesday provides for three things.

1. That ADMIE recovers revenues of 125 million euros, instead of 200 million euros, during the construction period.

The Cypriot side maintains that this cost will be covered by emission revenues, while the rest of the revenues that ADMIE is entitled to will be covered upon the start of operation of the electrical interconnection.

2. For the Republic of Cyprus to become a shareholder in the electrical interconnection Great Sea Interconnector.

Today, the sole shareholder is ADMIE. Based on the agreement, Nicosia will enter the share capital with 100 million euros.

3. That Greece increases the percentage of the geopolitical guarantee for the implementation of the Greece – Cyprus cable project.

According to information, the ratio between the two countries for the provision of a geopolitical guarantee for the security of the project will be 50-50.

Philenews reported that government officials and technocrats are rushing into an overloaded current of coordination in their attempt to finalise the changes in the document that will make up the framework of the electricity connection between Greece and Cyprus.

Sources say that the Energy Ministry will submit a final script for approval on Tuesday September 17th, during the next scheduled Cabinet meeting.

It all points to an arrangement where the government’s request that the countries equally share of the cost of possible project failure has now been accepted by Athens.

The sticking point is the budgeted cost of the electricity connection. The Energy minister seems to share expert concerns that the cost is unlikely to remain sub two billion and has requested a number of guarantees in the eventuality that these fears are realised.

In case the work is extended beyond 2030, it is understood that neither the state nor the public will be called upon to cover any additional cost of implementation expenses..

The project will be high on the agenda of talks between President Christodoulides and Prime Minister Mitsotakis in Athens next Thursday & a final agreement document should be in place, at least approved by the Cypriot side.

According to info., the conclusion of the consultations between the Cypriot Government with the Greek Government and ADMIE is now stumbling on the strong desire of the Greek side to close within the week also the issue of the participation of Cyprusin the share capital of Great Sea Interconnector, with 100 million euros and approximately 30% of the shares.

ADMIE believes that if the Cypriot Government announces its decision to acquire a significant percentage of shares, it will send investors and financiers the message that the Republic of Cyprus fully supports the project & will work beneficially for profitability and financing. There is also a pending request for a loan of around 500 million euros from the European Investment Bank (EIB). The Presidency of the Republic considers that it cannot deviate from its commitment to take a decision only after the evaluation studies. But as it this may take time the Greek side is pushing for the issue to close possibly through the Cyprus Transmission System Operator. According to info., the Presidency favors the issuance tomorrow of a decision that will make even clearer and stronger its interest in buying equity but on the other hand it wants to give time to the evaluation studies to decide on the viability of the project, before making its binding decision.

Philenews (Andreas Bimbishis) reported that Emirati TAQA’s participation in the Great Sea Interconnector was at the center of talks held by President Christodoulidis in the United Arab Emirates last Wednesday.

Government circles contacted by Philenews noted the importance of the talks while underlining the involvement of Abu Dhabi’s national energy company (TAQA).

Nicosia notes the UAE’s interest in the specific project, while underlining that the trip to the Gulf state came at a pivotal point in the GSI discussions. There is also a positive sign regarding the diplomatic aspect of the whole matter considering that similar meetings with the leadership of the UAE are not an easy task. Last December, a memorandum of understanding was signed between the Ministry of Energy, ADMIE and TAQA for cooperation in the electrical interconnection of Cyprus, Greece and Israel.

The purpose of the memorandum is for the Ministry and TAQA to engage in discussions with ADMIE, so as to study the possibility of participating in the share capital of the new company that will take over as the Implementation Agency of the project.

It is foreseen that an advisory committee will be set up which will meet twice a month and which will be attended by two members from each side and an additional person from ADMIE.

The ‘so-called transport minister’ Ethan Arikli of the occupied North said that not only the requests for direct flights, direct trade and direct contacts, but also the electrical interconnection by cable with Turkey, should be set as a condition for the resumption of talks in the Cyprus issue. 

MEP Kostas Mavrides (DIKO – S&D) has questioned the European Commission about the legality of a clause in a 2016 agreement concerning Cyprus’s ports.

The clause, part of a deal for private management of Limassol port, requires state compensation if commercial activities at Larnaca port exceed 900,000 tonnes annually.

Mavrides revealed that in 2023 alone, €3.354 million was paid to the managing company under this provision.

He argued that this arrangement not only fails to serve the public interest but also restricts the growth of the Larnaca port’s operations.

The MEP highlighted that Cypriot authorities, including the Audit Office, Law Office, and Commissioner of State Aid Control, had previously expressed reservations about the clause.

He asked the Commission to clarify whether the clause violates EU state aid and competition laws.

The EU’s anti-fraud office (Olaf) is investigating Cyprus’ fisheries department over a tender which the audit service said contained “unacceptable” conditions and cost €1.5 million more that the lowest bidder. The project has also been hit with delays. The matter has also been reported to the anti-corruption authority and transparency commissioner for possible criminal offences including abuse of power.

Olaf’s investigation concerns the purchase of an oil recovery vessel aimed at responding to marine pollution incidents in Cyprus’ exclusive economic zone (EEZ).

Ukrainian oligarch Igor Kolomoisky, a prominent person who was once an ally of President Zelensky, loses his Cypriot citizenship after the authorities of the Republic confirmed that it was obtained by fraud, false representations and concealment of essential facts. The Ministerial Council also revoked the citizenship to seven more people (2 families) who had become Cypriots via the Cyprus investment program.

12/09/24

Minister Eli Cohen posted on social media that he spoke with the Minister of Energy, Trade, and Industry of Cyprus. They underscored the strong relationship and ongoing cooperation between Israel and Cyprus, and  Minister Cohen emphasized the great importance of the “Great Sea Interconnector” project to Israel. The project will connect Israel’s electricity grid to the European one through Cyprus and Greece, and strengthen energy security in the region. This groundbreaking project is a top priority for Israel as it enhances regional energy security, provides access to diverse energy markets and strengthens Israel’s integration into the European energy network.

Discussions regarding the regulatory framework for the Great Sea Interconnector connecting Cyprus to Crete will carry on “for as long as it takes”, deputy government spokesman Yiannis Antoniou said but the government “recognises that time is not unlimited.”

After Tuesday’s roundtable meeting of stakeholders on the matter, discussions would continue “remotely”.

He added that Tuesday’s meeting was “productive and beneficial”, and that the government believes it is “on a good road, on the right road” over the matter.

He said the issues raised included technocratic, technical, economic, and legal matters and that “we want to see [all sides’ positions] converge when it is possible.

“Our central question,” he said, “is over the reduction of energy costs for Cypriot homes and businesses. That is our approach.”

“We do not consider that there is a risk of aborting the interconnector project”, noted the Greek Minister of Foreign Affairs, Giorgos Gerapetritis, in an interview noting its importance and that Greece is very clearly of the opinion that the project will continue normally.

He underlined that the cable will pass through the territorial waters of Greece and Cyprus and through international waters of the Greek EEZ. The laying of cables is absolutely protected by international law.

Asked about the events in Kasos involving Turkey (end of July an Italian vessel carried out surveys for the interconnection project) he said: “The absolute distortion that is being made is that we allegedly recognized claims, which is false. Allegedly there was a crisis, and this is false. Allegedly, the survey has not been completed, and this is false”.

Philenews reported that there are estimates that a compromise for the interconnector is possible in the next few days.

According to info., an agreement satisfactory to both sides could be reached if the Greek Government and ADMIE (implementor) accepted some differentiations that would reduce the costs for Cypriot consumers, in the scenario that the electrical interconnection is interrupted or blocked by unforeseeable factor (force majeure). For its part, the Cypriot Government reportedly remains ready to accept the two basic requests of ADMIE – that the Government and not the electricity consumers directly finance – possible with budget approval by the Parliament – the financing of ADMIE with 25 million euros per year for the five years (2025-29) to recover part of its costs for the execution of the projects and, secondly, extending the preferential rate of capital return of 8.3% to 17 years.

Although information was initially published about the intention of the parties to hold a new teleconference yesterday, it seems it did not take place. But there is a possibility it may happen either today or very soon.

Edek socialist party called on the government to convene a meeting with political parties over the Great Sea Interconnector so as to form a national policy on the matter.

With this in mind, it set out its stall on the issue, saying Cyprus should instead “focus on the arrival of natural gas” and that it was “problematic” that the Greek government is “insisting that it be implemented … without any step being taken between Greece and Cyprus to delimit the two countries’ exclusive economic zones (EEZ).”

An op-ed in Philenews noted that the President left this crucial meeting on the interconnector to attend a book presentation. The President’s choice clearly demonstrates a politician whose sense of the seriousness of issues is illogical. And that, of course, is very dangerous for any political leader. When a President abandons a meeting of utmost national interest to attend a book presentation, where his presence serves more to bolster his public relations than anything else, then that so-called leader proves to be utterly inadequate.

Shimon Aykut, who was arrested in early June facing charges related to usurpation of property in the occupied territories, will remain in custody until September 27

Explaining its rationale, the Court ruled that there is a risk of the accused fleeing justice as there is a visible possibility (based on witness material put before it, the seriousness of the offences and the possible jail term) of conviction.  In its decision the court also noted that any reasonable expectation of acquittal is not/cannot be excluded.

President Christodoulides met with President of the United Arab Emirates Sheikh Mohamed bin Zayed Al Nahyan where they discussed cooperation in energy and infrastructure.

US sanctions imposed on entities and individuals in Cyprus are not targeting the country but oligarchs and arms traders that enable Russia to continue waging its war in Ukraine, US Ambassador to Cyprus Julie Fisher said.

She was addressing the Sanctions and Export Controls: Best Practices seminar, which brought together representatives from the Central Bank of Cyprus, compliance officers of the Cyprus banking sector and officials from the US Treasury, Justice and State Departments.

The Supreme Constitutional Court rejected an appeal filed by a Syrian businessman against the revocation of his Cypriot citizenship after his name had appeared on a European Union list of financiers of Syrian President Bashar al-Assad.

The man is also one of Assad’s cousins.

He had applied for Cypriot citizenship for himself, his wife and their four sons in 2009 under the country’s citizenship through investment programme, commonly known as the ‘golden passport’ scheme.

Meanwhile, one of the richest people in the world, Miroslav Miskovic remains a Cypriot after a recent decision by the Council of Ministers to revoke an earlier decision in 2021.

He was previously acquitted by the Court of Appeal in Belgrade for a tax evasion case in which he was convicted and on which the Republic of Cyprus relied to start the process of depriving him of the citizenship he had acquired in 2012.

Philenews reported that the Republic is expected to soon shake hands with Hermes Airports, which is the managing company of Larnaca and Paphos airports, in relation to the second phase of construction of the infrastructure projects at the two airports and the extension of its management.

The Cyprus Shipping Chamber (CSC) participated at a recent meeting of the International Chamber of Shipping (ICS) in London.

The event involved discussions on numerous issues, including the attacks on ships in the Red Sea and the Gulf of Aden, along with developments concerning emissions reduction targets.

The Bank of Cyprus is studying the divestment (partial or full) from JCC Payment Systems Ltd, in which it holds the largest percentage of participation (75%). Euronet Worldwide Inc, listed on the NASDAQ stock exchange, is listed as an interested buyer.

11/09/24

A crucial meeting was held yesterday at the presidential palace on the interconnector issue.

Cyprus’ ministers of energy and finance, as well as representatives of the legal service attended as also Greece’s energy minister, a representative of the EU commission, cable producer Nexans and Greece’s independent power transmission system operator (Admie).

Media reported that the only positive information made public after the meeting was the assurances given by the President of the Republic and the Ministers of Energy of Cyprus and Greece that the contacts will continue in the coming days.

The Deputy govt. spokesperson said that no one wants the dialogue to collapse. There are issues that need further processing and additional information is expected. The outline has been set and now at the level of technocrats other data will be exchanged so that a decision can be made at a political level. The time frame is not unlimited but the schedule is also not ‘suffocating’ in the sense and image that was created in the previous days.

Philenews reported that it should not be ruled out, due to the seriousness of the matter and the side effects that the final decisions on the energy future of Cyprus will have, that President Christodoulidis chooses to inform the political leadership, in order to record the their positions before finalizing his own decision. Other media reports said Cyprus is considering asking the European Commission to raise its pledged grant of €657 million – accounting for about a third of the project’s total cost – by another €200 million. This is because the €657 million had been pledged at a time when the project was costed at €1.4 billion; by contrast the latest estimates place the price tag at €1.9 billion.

An op-ed in Politis entitled “Israel needs to enter” notes recent statements of the CEO of the Interconnector implementor who stated the importance of interconnection also with Israel. If the issue was trilateral there would be no discussion of geopolitical risk or viability. It is not trilateral

and like Israel usually does, it is absent. In the big plans, such as natural gas finds in the East Med. and the interconnector project, Israel appears to lead things but then disappears. One could mention the war but this tendency existed. While discussing the idea of a terminal in Cyprus, Israel proceeded with its own plans for Tamar and Leviathan. Today, while the logic of the cable was to connect Europe with Asia via Israel, hence the first name was Asia Interconnector, the Israelis have disappeared from the project and we are talking about a cable from Cyprus to Crete. What’s going on? How will the cable lead to an electrical interconnection with Saudi Arabia that will move forward in the coming months, according to the CEO? What is certain is that these projects can make it possible to transfer huge amounts of “green” energy from the Mediterranean to central Europe, where the major consumption centers are located. This will be mutually beneficial for all economies involved, as long as everyone remains firmly focused on the big picture. If they are team players and don’t only see their own interests.

The United States Ambassador to Cyprus, Julie Fisher, reiterated yesterday that the electrical interconnection between Greece and Cyprus is an important opportunity for Cyprus.

The Employers and Industrialists Federation (OEV) stressed that the sustainable electricity interconnection must be a project which is of European co-ownership and, as such, entitled to European geopolitical safeguards.

“The project must, with reliable independent studies, begin and finish without dramatic, for the economy, overruns in the estimated costs, with the introduction of caps on the financial exposure of the state,”.

Politis reported that the debate on the Cyprus-Greece electricity interconnection has again brought to the fore the issue of the large profit of electricity production companies, from Renewable Energy Sources (RES). There are more voices raising the issue of excess profits and also suspicions that the Great Sea Interconnector may also impinge on their interests

The Cyprus Mail reported that management of the Karpaz Gate Marina near the occupied village of Ayia Triada in the Karpas peninsula has been transferred out of Israeli hands and put under the operation of Turkish Cypriot Arkin group.

New investments into the marina will now be made exclusively by the Arkin group.

The Karpaz Gate Marina first opened in 2011, and cost around €120m to build, and as such constituted the largest Israeli investment in the north – a fact which had caused concern in Turkey and among some Turkish Cypriots, though has thus far seen very little traffic.

According to the north’s ‘tourism ministry’, just 113 people arrived at the Karpaz Gate Marina from abroad in the first seven months of the year.

The Cyprus Mail reported that a court will convene today to decide whether Simon Aykut will be held until his trial or released on bail.

Aykut, 73, is being tried for developing on over €43 million worth of Greek Cypriot land in the north through his company Duminka part of the Afik group.

During a hearing on Tuesday, the court heard from the prosecutor that based on testimony he needs to remain in custody until the trial is complete.

The defence attempted to refute the prosecution’s case.

The Cyprus Mail reported that no investment has been made in the occupied north’s ports “in 100 years”, the north’s ‘transport minister’ Erhan Arikli said.

The north’s cabinet had approved a bill to privatise both ports, but that has met with problems.

Arikli pointed out that the decision to privatise the ports had initially been made in 2001, but that the necessary funds to do this had never been allocated.

He also claimed that a company by the name of Salamis Port Shipping Ltd had “pressured for the handling tender to not be an international tender” – a point upon which he had insisted, event to the point of withdrawing his party’s support for the ‘government’.

10/09/24

Philenews reported that the more the authorities study the existing agreements and regulatory decisions for the Cyprus-Crete electricity interconnection, the more they worry about dozens of gray areas, as well as potential pitfalls.

Today, the President of the Republic is attending the meeting he called with all the interested parties, but he is going more to ask and claim, than to shake hands for an agreement.

The absence of any commitment for the final cost of the interconnection, the delivery time of the project, but also the damage that will be borne by the consumers in the event of interruption of the project for reasons of force majeure, are the biggest concerns of the Government.

A big problem is caused by the attitude of the investors/implementor (ADMIE) and the Greek Government (it owns 51% of the shares of ADMIE), who, while demanding that the changes they demand in the regulatory framework be made, in order to further ensure their financial interests, refuse to discuss changes requested by the Cypriot Government in the framework, accusing it of withdrawing from the original agreements.

Under these circumstances, the chances of an agreement being reached during the afternoon meeting are not a lot.

From the side of the govt. a great effort is being made to identify possible risks (financial and other) for the state and consumers, in the regulatory decisions already taken by CERA and binding on both sides. The Government insists on finding a formula that will protect consumers and the economy, in case the costs for the interconnection increase beyond the 1.94 billion budgeted. the Government also does not accept the request of ADMIE to change the wording related to the compensation of the implementing body in case of interruption of the project without its own responsibility. On the contrary, the Government (and the Attorney General) now consider that the specific wording in the regulatory framework ( “may”) is insufficient for the country’s interests and must be amended. Financing the project with 125 million euros is acceptable as also extending the preferential rate of capital return of 8.3% to 17 years.

The Great Sea Interconnector (GSI) is both technically and financially viable and must go ahead, former finance minister and Disy MP Harris Georgiades said.

According to the MP, the project’s benefit is clear and it should progress. It is unthinkable to derail a project for which construction has already started, and which had already been assessed and approved by the EU. “We cannot blow up this historic opportunity and remain isolated,”

Much has been made over the issue of geopolitical risk, he said, but in the event of Turkish aggression, Greek consumers would also be liable for almost 40 per cent (37 per cent) of the fallout. And the EU would never have earmarked €657 million in subsidies for a project which was unfeasible or unworthy of the well-assessed geopolitical risk.

As for the project perhaps not bringing down electricity prices or, conversely, becoming a monopoly precisely due to its flooding the island with low-cost energy, Georgiades held that such fears were illogical and baseless.

As for concerns over the project’s costs, the €2 billion currently estimated, would be the “absolute max” that would need to be paid out by the state or the consumer.

The electricity authority (EAC) pays €2.5 billion per annum to burning imported fossil fuel he pointed out.

“What the consumer will [directly or indirectly] have to pay, is not the €2 billion but that minus the EU subsidy, minus the 63 per cent to be paid by Greek consumers – and that remainder would be spread out over 35 years,” he said.

The project will be both viable and profitable, Georgiades confidently concluded. The Cypriot consumer would be burdened with a “cost of €30 per year, while saving €150”.

Philenews reported on statements made by the Minister of Foreign Affairs of Greece, Giorgos Gerapetritis.

“I want to be clear. The search, as well as the laying of an electric cable, is permitted and absolutely guaranteed by international law.

The rules of international law absolutely allow the search and laying of an electric cable, and therefore there could be no obstruction by another state.

After all, this proves the fact that the specific project for the electricity interconnection between Greece and Cyprus has been approved by the European Commission, which is known evaluates things very carefully”.

But he did not say, however, why ADMIE is demanding that it be financially guaranteed through the regulatory framework that it will be fully compensated in case the project is wrecked by an external factor.

He also did not say how it is possible for the European Commission, which is supposed to evaluate things very carefully, to make a mistake twice in a very short period of time for projects for which it gives money from the EU budget. Once it gave 657 million euros to a company that could not, as the Commission itself diagnosed afterwards, implement the interconnection and a second time when the studies it approved showed a cost of 1.4 billion which increased to 1.94 billion.

The Greek Minister of Energy stated that the Interconnector will have significant profits for Cypriot consumers.

Philenews reported that a Professor of the Polytechnic School at Frederick University, specializing in sustainable energy issues (Paris Fokaidis) stated that public opinion in Cyprus appears cautious towards the Great Sea Interconnector.

“This reluctance is not unjustified, as there have been several failures in grandiose energy projects in Cyprus. This fact gave the opportunity to domestic lobbies to target the project and create a climate of questioning. These lobbies have found expression in specific politicians and are supported by specific media, cultivating a climate of doubt about the viability of the project.

The main lobby is that of the domestic Renewable Energy Sources (RES) producers, who currently sell the kilowatt hour at a higher price than the European Union average, and about three times the price compared to Greece, taking advantage of the island’s energy isolation. The interconnection with Greece is expected to drastically reduce the price of energy, which will hurt their revenues.

At the same time, there is the domestic conventional power generation lobby, which also opposes the project, as it will reduce its revenues.

A third lobby seems to be worried about the geopolitical dimension of the interconnection, arguing that the energy support of Cyprus can remove the chances of solving the Cyprus issue or prevent cooperation with Turkey. This lobby promotes the view that all efforts to upgrade energy and adopt the European energy policy should be abandoned until a solution to the Cyprus issue is found.

Also, the attitude of the involved bodies from Greece on the issue has not helped to strengthen the confidence of the Cypriot society. The pressure from the Greek side, through anonymous entries in the press and other media, created suspicions of possible corruption in the project, giving food for scenarios of involvement which are circulated within Cypriot public opinion.

Nevertheless, despite strong opposition from various lobbies, the Cypriot government and the country’s major political parties continue to support the project.

A Cyprus Mail op-ed notes that the Government needs to be fully informed before taking GSI decision.

The project for importing LNG to Cyprus must be completed as soon as possible, as every delay costs the Cypriot economy and the consumer huge sums of money, President of the House energy committee, Kyriakos Hadjiyiannis said.

“There is a huge need for parliament to take a very critical look at this project in a way that we can help, contribute and even strengthen the very issue of transparency to the extent that we can serve it, in view of the arbitration or even the court proceedings that are going on”.

Philenews reported that French TotalEnergies, which operates jointly with the Italian ENI in seven blocks in the Cypriot EEZ, is expanding its activities in Cyprus, in the field of renewable energy sources. In joint venture with Universal Life insurance, TotalEnergies aims to implement a 100 MWsolar park.

The trial of Israeli property developer Simon Mistriel Aykut, who is accused of having developed and sold €43 million worth of property on Greek Cypriot land in the occupied north, will begin on September 27.

Aykut appeared in front of the Nicosia criminal court on Monday, where he faces a total of 124 charges. He is being represented by two Greek Cypriot lawyers and one Turkish Cypriot lawyer, while an Israeli lawyer is also observing the proceedings.

The defence is expected to object to Aykut’s continued detention.

Aykut was arrested in June while attempting to cross from the north to the Republic.

He is the founder of the Afik Group, which has carried out various construction projects in Trikomo, many of which are believed to be on Greek Cypriot land.

The Afik Group made headlines a year ago when Politis newspaper reported that a law firm co-founded by then Cyprus Bar Association chairman Christos Clerides was representing Afik Group chief executive officer Afik Yaacov.

Yaacov had reportedly registered a company named Danilen Ltd in Nicosia at the same address as Clerides’ law firm, with Politis saying the alleged link between the law firm and Yaacov emerged as part of the bar association’s obligation to oversee all lawyers and their compliance with anti-money laundering regulations. The law firm said at the time that reports of assisting people and facilitating where it comes to matters related to the north, or any connection of the firm with illegal activities “are false and a result of sinister and ulterior motives”.

The cattle breeders’ coordinating committee expressed fury over the European Commission’s decision to provide €39.5 million in aid for the Turkish Cypriot community as part of its latest annual action programme.

They said the funds, which the commission said aimed at facilitating Cyprus’ reunification and supporting the socio-economic development of the community, are “affecting the economy” of the Republic.

A report on actions taken by the Deputy Ministry of Research, Innovation and Digital Policy in relation to the creation of the “National Wallet of Cyprus” (eWallet) was published by the Audit Service.

The report identifies, among other things, serious irregularities and violations of regulations, conflict of interest, non-transparent procedures and arbitrary decisions which, as it states, “leave the Deputy Ministry and the State exposed”.

It was decided to investigate the issue following statements by the former Deputy Minister of Research, Innovation and Digital Policy,Filippos Chatzizacharias, to the media on 7/6/2023, where he complained that the Deputy Ministry, in 2022, had verbally assigned to a consortium, which consisted of the University of Cyprus and two Cypriot private companies the national digital wallet (eWallet) project. An officer of the Ministry involved in the project seems to be related to one of the companies. seems to have had close relationship with one of the companies. The companies who undertook the project by direct assignment, demand the total amount of €1,373,544 plus VAT for the works carried out.

Boat owners in Larnaca have threatened to escalate protests over mooring fees at the city’s marina, following a demonstration on Saturday . The Moored Boats Owners Association has given the Ministry of Transport, which took over marina management on May 27, until the end of the month to address their demands. They are calling for fees to be reduced to levels predating the management of Kition Ocean Marina.

Influencers in Cyprus face increased scrutiny as authorities step up checks on tax compliance and transparency in advertising.

This move, aimed at protecting consumers, follows new EU regulations requiring influencers to disclose commercial interests in their posts.

Michael McBride, Managing Partner at Chrysses Demetriades & Co. Law firm said that recent geopolitical events and subsequent sanctions have hit many economies in the EU, including Cyprus, hard. In the case of Cyprus, what had been built over the last 30 years or so with the Russian market vanished in less than one year. However, as with any crisis, there are new opportunities and it is down to the expertise of each provider to exploit them.

Director General of the Research and Innovation Foundation (RIF) Theodoros Loukaidis recently met with Henrietta Egerth, who leads Austria’s national R&D funding agency, FFG.

The meeting took place in Vienna, and sought to deepen the ties between the two agencies, while exploring future avenues of collaboration.

A cross-border tax evasion and money laundering scheme involving Greece, Cyprus and Slovakia has led to the arrest of 21 people, Greek police said.

Greece’s police said the case amounts to a €26 million tax fraud, in which at least 430 front companies were set up across all three countries.  

Unemployed and dependent persons were listed as administrators so as to conceal the identity of the real ‘masterminds’ behind the case. Fake transactions amounting to €150 million had been declared.

09/09/24

A broad meeting has been convened at the Presidential Palace this morning, in the presence of the Attorney General, the competent ministers, the deputy minister under the President and others to discuss the Interconnector. This in light of the meeting tomorrow with the participation of the Ministers of Energy and Finance, the Deputy Minister to the President on behalf of the Republic of Cyprus, the Minister of Energy on behalf of the Greek Government, a representative of the European Commission, representatives of ADMIE, NEXANS and the Legal Service of the Republic of Cyprus. The President wishes that all aspects of the project for which he and the involved ministries have reservations and concerns be discussed in an attempt for the final positions of the Cypriot side to take shape.

The President stated last Friday that he’s following with great interest the intense positions of some media and some politicians, either for or against the Interconnector. “They seem to forget what they said in the past. The government will take a decision that serves the interests of the Cypriot people and not burden them financially. We have seen in the history of this Republic what happened to big projects, with projects of great strategic importance and where they ended up”.

In response to a  remark that there are different positions within the Government, the President said “there is no different position. The job of one Ministry is to put the economic data, the job of the other Ministry is to put the energy data and as a whole we decide.”

Asked to comment on the ongoing investigations of three former Ministers in relation to contracts signed for the electrical interconnection project, the Govt. Spokesperson said that as far as he knows from media reports, “it is a letter from a member of the House of Representatives. If there are any suspicions, any shadows, everything should be investigated, everything should be brought to light. For us, what interests us is to ensure the benefit of the Cypriot consumer, and with this in mind we will continue to make decisions on the basis of real data, without any shadows”.

The Great Sea Interconnector project will go ahead “if its financial viability is ensured”, Greek Prime Minister Kyriakos Mitsotakis said.

“I consider it to be a very important project, and much more important for Cyprus because it essentially breaks the country’s energy isolation. I can assure you that if the financial viability of the project is ensured, the project will be done and any geopolitical risks will be overcome,”.

The Minister of Energy & Environment of Greece, who will participate in the meeting on Tuesday for the Interconnector, said that “the things we had expected have not been done  neither in general, nor in particular.” According to Philenews information, the statement is not irrelevant to the Greek government’s strong discomfort by President Christodoulides’ personal decision not to ratify, at the recent Council of Ministers meeting, the additional terms requested by the project implementor to be included in the regulatory framework.

The president of DISY party Annita Demetriou was asked to comment on the statements of former president of DISY, MP Averof Neophytou, who expressed the opinion that with the Cyprus issue unresolved, no energy project is going to be completed.

She disagreed with his statements stating that the interconnection project, as a project of geostrategic importance that removes the energy isolation of Cyprus, should be approached positively.

It is the responsibility of the govt. to answer questions being raised and to put in place the safeguards needed for the successful completion of the project. She wondered whether, due to the Turkish occupation, far-reaching plans should not be made.

“Everyone has the right to express their opinions, but DISY’s position is positive towards the project.”

In relation to the geostrategic risk and Greece’s position, she noted that Greece is Cyprus’ strongest ally and that the various questions must be included in the discussion of the negotiating framework. “Everyone must take on his role and it is important that we don’t come out in retrospect and say what we believe”.

Cyprus is in a vulnerable position and stands alone in the issue of electrical connectivity, said the American Ambassador to Cyprus Julie Davis Fisher on the sidelines of the 4th Metropolitan Economist Summit in Thessaloniki last Friday.

Essentially referring to the issue of the electrical interconnection, she said: “Now is the time to stop thinking only about money and the involvement of the EU regarding the Great Sea Interconnector. It is time to think about the geopolitics around such a project and recognize how important it is to see Cyprus connected to Europe through this opportunity. Cyprus fought for major energy projects and we saw a series of Presidents trying to implement them. Now is the time to do it right because these opportunities will pass and Cyprus will be left behind. For the US what matters is stability and security in a region that is lacking it. Cyprus is very important for us in the Eastern Mediterranean region and ensuring the energy supply is important for Cyprus “.

Under Secretary of State for Energy Resources of the US Department of State’s Office of Energy Resources, Jeffrey Pyatt also made statements during the conference about the usefulness of diversification of energy sources, including the energy cooperation between Cyprus and Israel.

This can create greater connectivity in the Eastern Mediterranean, based on clean energy.

Philenews reported that whatever the President had planned in his mind for the meeting he called for Tuesday will have to be reconsidered after the direct and overt intervention of the USA, through its ambassador in Cyprus. The Americans are “pushing” for the implementation of the project. The State Department took a clear position in favor of Cyprus’s compliance with the planning for the promotion of electrical interconnection here and now. The US ambassador to Cyprus, although indicated that it is time to think about the issue of geopolitics around the Interconnector, did not say a word about the big geopolitical danger and Turkey, leaving to Cyprus and its President the ‘hot potato’. During her presentation she repeated the word ‘now’ many times, meaning immediately. Dialogos referred to a blatant intervention by the Americans calling on Cyprus to accept the plan for the promotion of electrical interconnection, here and now.

Philenews reported that the cost of the geopolitical risk and the possible obstruction of the electricity interconnection by Turkey is the most important issue to be discussed at the meeting on Tuesday for the Interconnector. But non-completion of the project can theoretically be caused by other factors, which fall under the definition of “force majeure”. According to info., the invitation of Nexans to the meeting is linked to the need to discuss ways to substantially reduce the burden on the consumers of Cyprus and Greece if the project is interrupted. Unconfirmed information states that ADMIE has informed that the cost of a reversal of the plans due to Turkish intervention will be at least 500 million euros. But the Cypriot Government is concerned that it may be much higher. During the meeting, many parameters of this aspect will be discussed, both with Nexans and the European Commission, so that any compensation is as little as possible for consumers and the EU can contribute (through the sponsorship of 657 million and not only).

Turkey’s Vice President Cevdet Yilmaz promised to “ensure the sustainability of the energy supply” in the occupied north. He said Turkey plans to build a “sustainable energy infrastructure” while the occupied north’s ‘prime minister’ Unal Ustel reiterated, during Yilmaz’s visit, that plans are afoot to lay an undersea cable which would connect the north to Turkey’s electricity grid.

This, he said, will “solve the energy problem completely”.

Following these statements, a meeting on the matter of “energy security and supply” was held in the presence of Turkish Cypriot leader Ersin Tatar who said the cable will “mark a new era”, while Ustel described it as the “project of the century”.

The cable was due to be completed in 2028, though this timeline was based on the planning phase having finished and construction having begun in 2024.

“President” Ersin Tatar said the  Immovable Property Commission (IPC) has concluded and closed 1,840 cases to date. Stressing that the IPC is an internationally recognized domestic remedy for property disputes, Tatar said the “government” with support from Turkey will continue to do everything possible to ensure it works effectively. There have been reports in the Turkish Cypriot media recently of efforts by the Cypriot Republic to negatively affect the Turkish Cypriot economy via the property issue.

Cypriot media have been reporting that the Republic is targeting usurpers of Greek Cypriot properties, triggering a domino effect across the economic and political landscape of the occupied territories.

They also report that it has led to a significant exodus of foreign investors from the area. 

The government has said Turkey is using the Immovable Property Commission (IPC) to avoid its obligations to claimants who were displaced in 1974 and won cases in international courts.

Politis reported that in addition to the legal measures, there are also important technological weapons that can be used immediately and effectively.

Internet posts related to the promotion of property sales in the occupied areas that were illegally erected on lands belonging to Greek Cypriots can be removed or even disappear.

In a written statement, regarding allegations of the existence of a “black hole” at the entry points of the Republic from where “black money” is trafficked, the Minister of Finance  assures that “the Ministry of Finance, taking it very seriously and in its effort to continuously improve the procedures and systems for controlling liquid assets at the entry and exit points of the Republic, has taken all actions to investigate the matter and find ways to strengthen and improve the work of the Customs Department in order to more effectively carry out its work” .

Cyprus achieved the third-highest annual growth rate in the European Union and the second-highest in the eurozone for the second quarter of 2024, according to Eurostat.

Secret investment funds registered in Cyprus were used to hide luxury yachts and real estate linked to a sanctioned Russian banker, the Cyprus Investigative Reporting Network has revealed.

Cyprus Business News reported that some 1,900 Cypriot companies may be subject to the upcoming higher corporate tax rate as Cyprus brings its legislation in line with European and global practices, George Panteli, the Permanent Secretary of the Ministry of Finance said.

He also noted that the global nature of the new rate also meant the Ministry did not foresee companies relocating from the island.

Two well-known economists (Andreas Charalambous and Omiros Pissarides) in an article in the Cyprus Mail note that serious delays in projects of strategic significance for the country, such as the import of natural gas, the port of Larnaca and the Paphos-Polis highway, have led to an intensification of discussions, domestically. The evaluation of public investments should be assigned to a specialised government department and a standardised, merit-based and transparent evaluation process should be established. For key strategic and/or complex projects, it is important to seek the involvement of experts.

Owners of pleasure boats staged a protest at Larnaca Marina, demanding that the state reduce mooring fees since it took over the marina’s management on May 27. They expressed their dissatisfaction with the increased charges and mooring fees that had been imposed by Kition Ocean Holdings.

The Nicosia Municipality announced the launch of a new two-month business accelerator programme.

This initiative is specifically aimed at individuals, teams, and existing businesses in the creative and cultural sectors who are looking to develop their ideas.

04/09/24

The government on Tuesday was forced to deny media reports it has taken any final decisions hidden from the public eye regarding funding for the controversial electricity interconnector project.

“No definitive agreement has taken place in relation to the final content of the regulatory framework governing the Cyprus-Crete electricity connection,” director of the president’s press office Viktoras Papadopoulos said.

Talks between the stakeholders are ongoing, he added, advising “patience”

Philenews reported that the that the matter would be closed today at the Ministerial level, information indicates that perhaps the decision will be postponed until tomorrow or Friday, as it is quite possible that not all the documents will be available for the members of the Government in time today . There are also reservations or objections that may be expressed by some ministers, specifically the finance minister, who has expressed concern. These are more connected to the state participation in the project rather than the final content of the regulatory framework.

Based on the law, any expenditure regarding the fund of emissions (225 million euros to be paid to the implementor)  must be included in the budget and approved by Parliament. However, it is not certain whether a budget will need to be submitted for the 2025 tranche now or in the next period.

MPs expressed strong doubts over the state’s decision to utilise the country’s emissions penalty fund to finance the Great Sea Interconnector and have sent a letter to the President to convey their concerns over the mode of financing for the interconnector project, and seek clarity from the president as to the government’s intentions.

Speaking to Cyprus Mail, Greens MP Charalambos Theopemptou said the move had been met with furious opposition from electricity authority (EAC) experts who have long held that investing in the island’s own infrastructures was the only sane priority.

This would entail fixing the massively polluting Dhekelia power station, building-up energy storage, and unpegging the price of renewable energy (RES) from conventional fuel production. Also, convincing the EU to use finds from the Emissions Trading System fund

will not be easy, he added.

The reported agreement has been portrayed as a means to avoid passing on the GSI funding gap of €125 million onto consumers.

MP and House energy committee chair Kyriakos Hadjiyiannis was also critical stating that instead of the cost being paid through a monthly fee it will be paid by the central state. It also leaves the state open to ongoing cost hikes, with the consumer ultimately paying the bill sometime in the future. Cyprus would also be supplied from the fourth most expensive energy producer in Europe and Cyprus did not need Greece’s RES energy.

A European Union directive by which a set percentage of energy used by member state residents must be derived from an interconnected source, means Cyprus must press ahead with the Great Sea Interconnection, Cyprus Chamber of Commerce and Industry (Keve) general secretary Marios Tsakkis said. The ultimate linking up of the Greece-Cyprus electric systems to Israel is also an imperative for the enterprise to make sense Tsakkis said.

Asked about the final leg of the GSI with Israel, Tsakkis said the cost for this would certainly be borne by the Israeli state, however, he could not detail how this would affect the 67/33 per cent cost sharing already determined for Cypriot and Greek consumers by the project implementor.

The geopolitical significance of the project particularly in regards to its linking up Europe with Israel, was underscored by the energy minister during a meeting with the Chamber.

Chevron, in an announcement, stated that the amended plan submitted for Aphrodite includes improvements to the approved 2019 plan, which will be beneficial to both Chevron and the Republic of Cyprus.

The new plan is similar to the 2019 Development and Production Plan, but at the same time, it recognizes the decline in available natural gas resources and has therefore been further optimized for the benefit of the Republic of Cyprus and partners in Aphrodite.

According to Chevron, the plan includes a Floating Production Unit (FPU) (also known as a Gas Processing Unit) in the Exclusive Economic Zone (EEZ) of Cyprus and a pipeline to export gas.

It asks for continuous support from the Republic.

Today a new hearing is scheduled at the London arbitration court regarding the liquidation of the guarantees of CMC for the Vasiliko project, amounting to 70 million euros.

After the termination of the contract, CMC appealed to the arbitration court to freeze and suspend the process of liquidation of the guarantees

The Chinese consortium also claims additional compensations due to delays that occurred during the construction of the project.

A meeting of the Minister of Transport, Communications and Works with the Mayor of Larnaca has been scheduled for September 27, during which the developments surrounding the city’s port-marina project will be discussed.

Politis reported that with financial support of the so-called ‘reparations committee’, Turkey seeks to limit the effects caused by the arrests for the illegal exploitation of Greek Cypriot properties in the occupied north. Tens of millions of euros were granted in order to start an effort to buy land belonging to Greek Cypriots (provided the legal owners themselves agree) in order to appease the reactions of investors.

The European Court of Auditors  raised concerns about the slow absorption of the Recovery and Resilience Facility (RRF) funds across the European Union.

According to the ECA’s latest report, the funds are entering the real economy at a slower pace than anticipated.

As of the end of 2023, Cyprus had only submitted 40 per cent of the payment requests outlined in the indicative schedules of its operational arrangements, compared to the EU average of 70 per cent.

Additionally, only 8 per cent of the allocated funds for Cyprus had been disbursed, with just 5 per cent of the milestones achieved. This corresponds to 14 out of a total of 271 milestones.

Globe Invest Limited, the family / investment office of Teddy Sagi, announced that its subsidiary company, Whitestreet Investments, has signed agreement with Trastor for the sale of Excelsior Hotel Enterprises, owner and manager of the Labs Tower in Nicosia.

Trastor is one of the leading investment groups in Greek real estate. Globe Invest will continue to manage Labs Tower.

03/09/24

Partners in the Aphrodite natural gas field submitted a new development plan for the field to the government. In an announcement, the partners (NewMed Energy, Chevron and Shell) said the estimated cost of the updated development and production plan will be approximately $4 billion. The partners also said that they would be building an independent floating production facility, which will have a maximum production capacity of around 800 MMCF per day through four production wells.

The natural gas will be exported via a pipeline to the Egyptian transmission system.

Yossi Abu, CEO of NewMed Energy stated: “We updated the development plan according to the instructions of the Cypriot Minister of Energy, and look forward to the plan’s approval to allow swift progress in the development of the reservoir. The reservoir’s development is another step in the regional collaborations that are evolving around natural gas in the Mediterranean Basin”.

Philenews reported that the proposal indicates that the consortium is going back to the provisions of the 2019 agreement, conceding the use of a FPSO over the field, as well as operating four production wells. Energy experts in Cyprus and Greece have described the estimated cost excessive and even unrealistic, indicating that it will ultimately deter the investment itself and hinder profitability for both parties.

The Cypriot government’s ‘notice of breach’ letter sent recently relates to one of the milestones in the contract, namely the performance (by the consortium) of the Front-End Engineering Design, or Feed.

The updated development plan for the Aphrodite gas field is moving “in the right direction and close to the positions of the Republic of Cyprus” President Nikos Christodoulides said, noting he has already arranged meetings with Chevron in his upcoming New York visit for the UN General Assembly. CNA sources suggested the government would be issuing its response in two weeks. According to the sources, the plan includes amendments to the updated plan submitted in the summer of 2023 and is moving towards the agreed original development plan submitted by Noble Energy, the previous operator of the gas field, in 2019.

An agreement was reached over the funding gap for the Great Sea Interconnector, according to media.

The governments of Cyprus and Greece, the EU directorate-general for Energy, the regulatory authorities of the two countries, and Greece’s independent power transmission operator, Admie, were reported to have agreed on the final content of the regulatory framework.

The agreement was concluded, reportedly, after the initiative of the President of the Republic, who had direct talks on the matter with the Greek Prime Minister Kyriakos Mitsotakis and the European Commission.

The accepted solution involves tapping into the state’s energy penalty fund for emissions, state broadcaster CyBC reported.

The fund will be used to pay out €25 million per year, from 2025 to 2030, to cover the cost of the project.

The move is presented as an avoidance of foisting the project’s cost directly onto individual consumers, a proposed measure which had been blocked by Cyprus’ energy regulator (CERA).

Official statements are expected on Wednesday. Philenews reported that the regulatory framework approved by CERA since 2023 will not change, at least in this phase, as far as geopolitical risk is concerned. The reference will remain that in the event of an external risk that will interrupt or prevent the completion of the project, without the direct responsibility of the implementor, CERA may approve the recovery of the costs that the implementing body will have incurred until then from the consumers. The implementing body wanted to remove the word “may” reservation, after the clear position of the Cypriot Government that the geopolitical risk will be borne by the investor and not the consumers.

The preferential rate of capital return of 8.3% is expected to be granted to the implementing body for 17 years. instead of 12. This will secure revenues of some millions to the implementing body, so that the project is considered sustainable (profitable for investors) in all its phases.

According to Greek media there is intense concern among the Greek authorities, as regards the issue raised by ADMIE for the geopolitical risk, which gives Turkey ‘’a foothold’’. The pressure on Cyprus to resolve the disputes, as well as reported threats towards CERA, are also a concern.

The Cyprus News Agency reported that according to its info., the project seems to be slightly sustainable during its construction but according to international investment practice, in such cases it does not attract investors.

Philenews (political editor Costas Venizelos) reported that the occupation regime in the north has resorted to new scare tactics as it attempts to force the Cyprus government into abandoning the intensive campaign of cracking down on European or third country nationals illegally purchasing or selling Greek-Cypriot properties in the north. The threat is the settlement of the fenced off city of Famagusta, in blatant violation of Security Council resolutions.

According to the editor’s sources, this is because the latest arrests of property usurpers had a subsequent major financial impact.

According to reports, the Afik Group, owned by Simon Aykout, currently in custody, was forced to lay off 700 employees following the latest developments, which have scared off many foreign potential buyers, while many illegal owners are now selling out and leaving the occupied territories.

Following a report in Dialogos that a provision for a ceiling on trade in the port of Larnaca exists, Philenews also reported that DP WORLD, which manages the port of Limassol, received 3.3 million euros in compensation just for 2023.

The company claimed this amount after a dispute with the Ministry of Transport and received it after winning an arbitration.

This provision was in the privatization agreement of the port of Limassol by the previous government and stipulates that if the port of Larnaca exceeds a certain ceiling of activity, compensation must be paid to the contractor company of the port of Limassol.

According to Dialogos, the state has already paid compensation of 9 million euros to the port of Limassol for exceeding the upper limit of commercial activity in the port of Larnaca for the period 2017-2021. Philenews reported that supposedly, the compensation that the government was going to pay would be very low but in reality, many millions have already been paid. The Legal Service had expressed disagreement with some provisions of the proposed agreement, but the ministry of transport ignored it. The provisions, instead of favoring the state, favored the companies.

The number of people crossing from the Republic to the occupied north via crossing points has decreased by 4% in the first seven months of 2024 compared to the same period last year. Excluding Turkish Cypriots, just over 2.81 million crossings were made to north via Cyprus’ nine crossing points between January and July this year. Crossings by Greek Cypriots also saw a slight decline while some nationalities saw dramatic falls in the total number of crossings-Russian citizens falling by 21 per cent and crossings by Israeli citizens dropping by 31 per cent. Some nationalities experienced an increase. Earlier in the summer, former Cyprus Turkish tourism and travel agencies’ union (Kitsab) director Mustafa Soforoglu had raised the alarm, saying the north is “suffering major losses” in its tourism sector and facing a serious decline in the number of foreign tourists. The reasons are the increased costs of flights accommodation while there is inadequate promotion in the international arena.

Dismissing 15 employees from Kition Ocean Holdings was necessary, Transport Minister Alexis Vafeades said, adding that efforts were made to find suitable positions for these individuals at the newly established Larnaca-Famagusta District Development Company.

The employees had been promised similar jobs after the collapse of the Larnaca Marina project. However, for 15 out of the 87 employees, the transport ministry was unable to find roles within Anetel. In a joint statement issued last week, the former employees expressed their dismay at the situation

The price of package holidays in Cyprus as well as in the EU continued increasing in 2024, with Cyprus recording the third highest increase among member states in July, according to data released by Eurostat.

In July 2024, the consumer price of package holidays in the EU was 6.6 per cent higher than in July 2023. The price of domestic holiday packages was up 11.1 per cent, while international holiday packages saw a 5.7 per cent increase.

In Cyprus, the consumer price of package holidays in July 2024 was 16.7 per cent higher than July 2023. The price of domestic holiday packages had increased by 11.8 per cent while international holiday packages saw a 17.2 per cent increase.

The occupied north’s ‘tourism minister’ Fikri Ataoglu implored Turkish holidaymakers to choose to travel to the north instead of to the Greek islands for their holidays.

This trend of Turkish citizens choosing to holiday in Greece comes with the north’s tourism sector enduring a difficult year, suffering major losses in its tourism sector.

The Cyprus general government recorded a surplus of €702.50 million, equivalent to 2.2 per cent of GDP, during the first seven months of 2024.

This marks a significant improvement from the €345.90 million surplus (1.2 per cent of GDP) reported during the same period in 2023

The growth was driven by increases across several revenue streams such as taxes on production and imports, revenue from taxes on income and wealth, social contributions and property income.

The economic growth rate for the second quarter of 2024 in Cyprus is positive, estimated at 3.6% compared to the same quarter in 2023. The positive growth rate is mainly attributed to the sectors of “Hotels and Restaurants,” “Construction,” “Information and Communications,” and “Wholesale and Retail Trade, Repair of Motor Vehicles.”

The European Union’s ‘Med9’ states’ agriculture ministers on Monday called for a “holistic approach” to water, which will ensure that the region’s inhabitants can live sustainably in the future and be insulated against water scarcity, Cyprus’ Agriculture Minister Maria Panayiotou said.

She said the ministers’ aim was to issue a joint communique on the matter of water scarcity.

Former transport minister in the Anastasiades government, Marios Demetriades, has been charged in the golden passports scandal, for offences related to corruption, bribery and money laundering. The indictment comprises over 50 charges against eight individuals and two legal entities.

These include Demetriades’ father and two siblings.

Philenews reported that according to Danos Property Consultants and Valuers, despite significant annual increases in property prices and rents across Cyprus, recent quarterly data indicates that the housing market is showing signs of slowing price growth for the first time since 2020. This slowdown is evident in the stabilization and, in some cases, slight decline in house and apartment prices across the island.

Peace in the hotel sector has been put on hold as trade unions dismissed an intermediary proposal put forward by the labour ministry for the renewal of the industry’s collective agreement.

Ayia Napa and Protaras have joined forces to boost their tourism product.

A joint promotional campaign, “Live Unforgettable Moments,” launched in August, seeks to attract visitors from key markets such as the United Kingdom, Scandinavian countries, Germany, Switzerland, Austria, Poland, and France.

Hellenic Bank posted a profit after tax of €189 million for the first half of 2024, marking an 18 per cent increase compared to the same period during the previous year.