Minister of Energy Giorgos Papanastasiou said on Wednesday that the government is evaluating the Cyprus-Greece-Israel electrical interconnection project, EuroAsia Interconnector, but did not clarify whether or how the government will support the financing of the project of such a strategic importance, the cost of which has increased by 23%.

In statements after a meeting of the Council of Ministers, Papanastasiou reiterated that the government is considering three options, namely the provision of government guarantees, in order for the project to secure the remaining funding, the participation in the capital of the private implementing body, or no support.

Meanwhile, the daily newspaper "Phileleftheros" reported today that the EuroAsia Interconnector requested the provision of government guarantees of 600 million euro.

Papanastasiou welcomed EuroAsia's announcement of the signing of a 1.43 billion contract with Norwegian company Nexans for the construction of the subsea cable that will connect Cyprus with Greece, describing the signing as a very important part of the infrastructure.

He explained that the realization of the milestone is one of the goals set by the European Commission to maintain the financing of the project, amounting to €657 million, which, as he said, is one of the largest financing in projects of a member state.

Papanastasiou said that the second objective was the participation of the Greek Independent Power Transmission Operator, which signed a letter of intent for the participation and management of the cable and the transmission of electricity. The third objective, he added, that must be implemented immediately is the signing of an agreement for the construction of the voltage converter, which must be installed and be from a specific company because it must be in parallel operation with the networks of Europe which have the voltage converters from that company.

He said that the signing of the contract with Nexans is a very important development adding that while the project is considered private, nevertheless "the European Commission had Cyprus in mind when it offered the many millions". 

Replying to questions, he said that the project was initially estimated at €1.57 billion and due to the price increase of materials, the cost has increased by 23%, reaching €1.9 billion.

The project, he added, due to its high cost, is currently being evaluated because it will require additional lending and will be evaluated from three aspects, explaining that the first is the viability of the project, that is, "whether this project will bring advantages in terms of electricity costs to the end consumer, the second concerns its strategic importance and the third its connection - which is very important for us in Cyprus - with the neighbouring country of Israel".

The Minister said that while the project is of mutual benefit, since it connects two European countries, it actually connects Cyprus to Europe's network, which is a very important development since the EU goal is to connect all the member states of Europe with each other.

He pointed out that it is not easy to find a financing of 1.9 billion euro from a private entity, Papanastasiou said that the government, due to the fact that it is a strategic project, is studying three alternative solutions.

The first, he said, is to make no move, that is to let the implementing body find the additional amounts. The second, he added, is to guarantee some lending of the specific implementing body and the third is "to be part of the company's share capital so that we can be in some kind of control of what is happening in something that is very important and strategic for Cyprus."

Asked when the government will make a decision the Minister noted that we are "investigating the viability, we are in consultation with the European Investment Bank (EIB) and at this stage there is evaluation in order to move to the next stage which is its strategic importance."

Meanwhile, Minister of Finance Makis Keravnos said that no guarantee has been requested from him in relation to the Cyprus-Crete electrical interconnection project.

Replying to questions by reporters after the Cabinet meeting, Keravnos said that "no guarantee has been asked from anyone, at least not from me" adding that this issue is being discussed as an electricity transmission issue.

"It is a big investment and should be discussed in depth in all its aspects,” the Finance Minister said.