When Nikos Anastasiades spoke in December 2007 of the “scandal of the century,” referring to the Papadopoulos government’s manoeuvres to push forward a floating natural gas unit, while denouncing political and other interests, he could hardly have foreseen what would unfold during his own presidency, and later under the Christodoulides administration.
In March 2024, the European Public Prosecutor’s Office (EPPO) informed the Republic of Cyprus (RoC) that it had launched a criminal investigation into possible offences by the Natural Gas Infrastructure Company (ETYFA), the Chinese consortium CPP, or other parties involved in the awarding and execution of the public contract for the design, construction, and maintenance of the liquefied natural gas (LNG) import terminal. The tender, announced in October 2018, carried a total value of over €500 million and was awarded to CPP in August 2019. To date, €200 million has already been paid.
Wrong from the start
Two months earlier, in January 2024, the Audit Office issued a report that sharply criticised the entire process.
- The outcome of the tendering process was far from the “resounding success” claimed by ETYFA. With two of the three bidders excluded, competition was severely undermined, leaving only a single bidder to be evaluated.
- The sole valid bidder included companies implicated in rigging public works tenders in Greece. Senior executives of an affiliated company in Cyprus had pleaded guilty and been convicted for bribing a public official in the so-called “garbage scandal.” By law, this should have disqualified CPP. Yet, under pressure from the government of the time, it was decided there was no alternative if Cyprus wanted natural gas. Canceling the tender would have meant losing €105 million in EU funding and delaying gas imports – and the benefits for the Cypriot economy – by at least five or six years.
- Contractor delays began immediately. The project, scheduled for 24 months, started five months late. Over time, demands increased, pushing completion deadlines further and further back.
No more… coal
Beyond the risk of losing hundreds of millions on a project that may never be delivered – a point that will be clarified within the next two to three months by a project manager hired last May, after the current government’s ‘Plan B’ collapsed – Cypriot citizens continue to subsidize the absence of natural gas in power generation and the disastrous trajectory of the most critical energy infrastructure in Cyprus’ modern history. Through their electricity bills, they are paying the price of successive governments’ inadequacy and mismanagement.
The cost of incompetence
- A household in Cyprus currently pays 5 cents more per kilowatt-hour than the European average: 33 cents/kWh versus 28 cents/kWh. That makes Cyprus the 7th most expensive country in the EU.
- Adjusted for purchasing power, Cyprus is the second most expensive at 36.1 cents. In Spain – where wages are comparable – the price is 26.6 cents, a full 9.5 cents (26%) lower.
- Electricity production from EAC’s conventional units costs 21 cents/kWh. In Greece, where natural gas is used, the cost is around 18 cents — a 14% difference.
- The environmental costs (not to mention human cost) of greenhouse gas emissions for Cypriot consumers reached €1.11 billion between 2018 and early 2025. Had Cyprus used a cleaner fuel, household electricity bills would have been 20% lower.
- As early as the late Nicos Rolandis’ tenure as Energy Minister, it was clear that natural gas would bring major savings. At the time, projections spoke of 50% lower electricity prices. Today, even with higher international gas prices, the savings would still be around 30%, factoring in competitive market benefits and reduced emissions costs. With gas, if you factor in the fixed charge, network use, RES fund etc, households could pay up to 10 cents less per kWh. In practice, the average household pays €400 a year, or €66 every two months – an amount no cost-of-living allowance or tax reform can truly offset, leaving Cypriots captive to high energy prices.
- Further losses come from the reduced efficiency of Electricity Authority (EAC) plants still burning mazut and diesel, and from two fully installed but idle generation units — EAC’s Unit 6 and another privately owned facility. The risk of partial or total blackout, which could cost the economy tens of millions, has forced President Nikos Christodoulides to approve the purchase of costly hybrid units for installation at Dhekelia.
A systemic failure
Beyond the potential criminal liability now under EPPO investigation – its independence ensuring that responsibilities will be allocated for the ‘scandal of the century’ which may see us lose half a billion euros – the LNG debacle highlights a deeper failure: successive Cypriot governments have failed to design and implement a realistic energy strategy. This failure has left the country hostage to high energy costs and structural energy insecurity.
