The Great Sea Interconnector (GSI) has taken a significant step forward, with the Cyprus-Israel section of the project moving closer to implementation following two major developments in recent days.
The submission of an investment request by Greek transmission operator ADMIE to the regulatory authorities of Cyprus and Israel has coincided with the entry of French infrastructure investor Meridiam into the project's shareholder structure. According to analysts, the developments strengthen not only the project's financial foundation but also its geopolitical backing.
After months of uncertainty, political debate and questions over both economic viability and geopolitical risks, the project is now progressing from planning toward implementation.
Former Energy Minister George Papanastasiou told Politis that the latest developments should not be viewed merely as a revival of the project, but as steps that improve its prospects for completion by addressing its biggest challenge: geopolitical risk.
"I see the project moving towards implementation," he said, arguing that the participation of Meridiam and the growing involvement of Israel create a broader network of economic and strategic interests around the interconnector.
According to Papanastasiou, the project is gradually becoming better protected against geopolitical pressures, including objections raised by Turkey.
A 324km subsea cable
Under current plans, the Cyprus-Israel section will consist of an offshore cable approximately 324 kilometres long, installed at depths ranging from 2,200 to 2,400 metres.
The system will have a transmission capacity of 1,000 MW through a 500 kV high-voltage direct current (HVDC) connection.
Converter stations are planned for Kofinou in Cyprus and Hadera in Israel, allowing electricity to flow in both directions depending on market conditions and demand.
Next regulatory step
The latest move by ADMIE involves filing the investment request following the completion of a cost-benefit analysis and a proposal for cross-border cost allocation.
The process will allow regulators in Cyprus and Israel to determine how project costs will be distributed between the two countries.
Once agreement is reached, a Final Investment Decision (FID) can be taken, opening the way for financing and construction.
Papanastasiou noted that similar negotiations took place for the Greece-Cyprus section, where the current allocation assigns 63% of the cost to Cyprus and 37% to Greece.
He cautioned, however, that such negotiations are often complex, with each side seeking to minimise its financial contribution while demonstrating the benefits it receives.
Israel prioritises energy security
According to Papanastasiou, Israel's interest in the project is driven not only by economic considerations but also by energy security.
Israel views secure electricity supplies as a strategic priority and sees the interconnector as a means of securing access to alternative power sources during emergencies or conflict.
Through Cyprus, Israel would gain access not only to Cypriot electricity generation, including renewable energy, but also to the wider European electricity network via Greece.
He argued that projects of this nature should therefore be assessed not solely on commercial grounds but also on their contribution to national security and resilience.
Strategic role for Cyprus
Papanastasiou believes the project's wider significance for Cyprus extends beyond the energy sector itself.
If completed, the interconnector would place Cyprus at the centre of electricity flows between Israel and Europe.
"Being in the middle of electricity flows between Israel and Europe gives you a strategic position," he said.
He added that Cyprus risks being sidelined if it does not actively participate in regional energy projects that place the island at the centre of future energy networks.
Meridiam and Israel seen as geopolitical support
The former minister argues that Meridiam's acquisition of a majority stake in Great Sea Interconnector represents far more than a financing arrangement.
Combined with Israel's growing involvement, it creates a network of political and economic interests linked to the project involving countries with significant international influence.
In his view, this broader backing could help reduce geopolitical risks associated with Turkish objections and potentially increase the likelihood of wider international support, including from the United States.
Potential impact on electricity prices
Papanastasiou also rejected suggestions that the interconnector would automatically lead to higher electricity costs for Cypriot consumers.
He said electricity prices in Greece are currently around 7 cents per kilowatt-hour lower than in Cyprus and argued that imports from Greece could provide electricity at prices at least 20% lower than domestic generation costs.
He nevertheless stressed that the greatest benefit would be ending Cyprus' energy isolation and integrating the island into the Israel-Europe energy corridor.
Turkey remains the biggest challenge
While acknowledging recent progress, electrical engineer and energy consultant Christos Hadjilaou warned that the project's main obstacle remains unresolved.
Speaking to Politis, he said recent developments indicate the project is beginning to move forward again, but cautioned that the primary risk remains geopolitical, particularly regarding Turkey's position.
Hadjilaou expressed greater scepticism than Papanastasiou about the extent to which French and Israeli participation alone can guarantee the project's success.
In his view, involving powerful international stakeholders is not enough on its own. What matters, he said, is whether there are concrete assurances that the project can proceed if Turkey chooses to challenge or obstruct it.
