The days until Friday, September 6 are considered critical for the Greece-Cyprus cable, that is, for whether the large project worth 2 billion euros will be implemented.
The developments were stormy and the background hard between Athens and Nicosia so that the parties involved, i.e. ADMIE, the Ministries of Energy of the two countries and the Regulatory Authorities of Cyprus (CERA) and Greece (RAAEF) reached an agreement with many “if”, as the information says.
The Greece – Cyprus cable
According to information from Athens, ADMIE – which is the implementing body of the project for the Greece – Cyprus cable – sent a letter to the French company Nexans, which in its letter suspended the cable works from tomorrow to delay its decision until Friday, September 6.
This development came, sources say, as Cyprus accepted that the project with the regulatory framework decided by CERA on July 2 did not make the investment viable.
CERA has reportedly pledged to change the framework with two new regulatory decisions. The first will be issued the day after tomorrow, Wednesday, September 4, and on Friday, the 6th of the month.
If these decisions are not taken that will put the project on track then the work by Nexans will be suspended next Friday for good.
The decisions of CERA
According to information, the French and ADMIE are waiting to see if the decisions that will be issued will lead to the viability of the project.
According to sources, CERA will take a decision on a WACC of 8.3% over 17 years, and as far as this income is concerned, it will amount to 125 million euros for the first five years of construction of the project.
The rest of the income, the information says, will be covered by capitalization from the day of operation of the project onwards.
In essence, the rest of the revenue will be covered by consumer invoices.
In relation to the geopolitical risk of the project, the governments will see it at a later stage.
Temporary agreement
According to reports, the aforementioned agreement is temporary. The final will come when ADMIE will have all the regulatory decisions in its hands.
A decision by RAAEF with a WACC of 9% for the Greek part of the cable is also expected.
Difficult negotiation
Sources state that it was a very difficult negotiation that led to a truce between the two sides.
If the regulatory framework is closed then the project will run, according to competent officials, and of course if the agreed terms are respected.
The project, sources note, is moving forward due to the stance taken by ADMIE, questioning whether the project would be sustainable with the decision of CERA on July 2.
The Turkish cable
It is worth noting that ADMIE and the Cyprus Operator TSMC succeeded in blocking a request from the Turkish Cypriot side for an electrical interconnection with Turkey.
A related request had been submitted to ENTSOE, the European transmission system operator.
However, if Nicosia does not comply with the agreed terms, then the request for the cable between the occupied territories and Turkey will be reinstated.
Source: OT.GR
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