Salvaging power grid connection project

A solution appears likely for the funding snags for EuroAsia interconnector, the planned high-voltage direct-current cable that will connect the power grids of Greece, Cyprus and Israel.

Greece’s Independent Power Transmission Operator (ADMIE) has come to a preliminary agreement with an Israeli fund for the latter to become one of the project’s shareholders, with a stake of up to 33%.

This development confirms Israel’s recent heightened interest in the project. If it goes through, it will provide enough capital for the project to be funded by the European Investment Bank (EIB), as well as through private funding.

The EIB, apparently, had rejected an application for €580 million in funding.

ADMIE officials have told Kathimerini that Greece’s transmission system operator has signed a letter of intent for joining the project with a minimum 25% stake with an option of raising it to 33%. This agreement convinced the Israeli fund to join the project, taking into account ADMIE’s know-how in power grid interconnections.

The new shareholding structure goes a long way toward ensuring EuroAsia Interconnector’s creditworthiness. The Cypriot state is also considering joining in as a shareholder, which further boosts the chances of the project, which will end Cyprus’ unenviable status as the only EU member with an isolated power grid.

EuroAsia Interconnector’s previous inability to raise funding also imperiled the disbursement of an EU-approved €657 million.

According to Cyprus’ Fileleftheros newspaper, state authorities had expressed doubts about the private company’s ability to manage a project that is expected to cost more than €2 billion.