Greece’s dependent transmission system operator Admie’s decision to temporarily suspend payments to French technology company Nexans for the manufacture and installation of submarine cables for the Great Sea Interconnector is “understandable”, Energy Minister George Papanastasiou said on Friday.
He told CyBC the decision was understandable “in the context of the technical, fiscal, and geopolitical risks inherent to the project”, with it having been revealed on Thursday that payments were suspended after Turkish warships had reportedly “disrupted” seabed surveys related to the project.
Additionally, he said that depth surveys had been completed and that Nexans is “continuing normally with their production” despite the halt in funding.
Admie had not yet delivered to Nexans a “full notice to proceed”, Papanastasiou said. Doing so would immediately make Admie fully responsible to deliver €1.4 billion to Nexans for the task.
In view of the multiple risk factors, Admie had elected to make monthly payments to Nexans, of which the latest one due had been paused, Papanastasiou said.
Asked if the pause was indicative of the project floundering, he said the interconnector is a project of common interest for the European Union, with the eventual aim of connecting Israel with Europe via Cyprus and Greece.
Moreover, he said, Nexans stands make the largest profit by far out of all companies involved in delivering the project.
He then added that the temporary pause in payment could be read as a bid by Admie for additional support from “key players”, including Israel, the EU, and the United States, which had according to Greek Energy Minister Theodoros Skylakakis in November expressed its clear support for the project’s essentiality.
Admie to date has paid Nexans about €200 million while the next installment of €70m had been due on February 28. In the event that Nexans decides to trigger a compensation clause should the project stall, Admie would have to reimburse the European Union for €160m in funds already disbursed.
In January 2022, the European Commission had approved €657 million under the Connecting Europe Facility for the interconnector.
Admie, a 51 per cent stakeholder in the project, is still awaiting the Cypriot government’s decision over whether or not it will pay the €100m it has requested to buy into the project’s holding company.
The Cypriot government took receipt of a cost-benefit analysis for the plan in July, but two months later in September, George Panteli, the finance ministry’s then permanent secretary, had said Cyprus’ authorities had not yet seen the project’s financing plan.
He said his ministry was at the time “not in a position to put forth” any concrete statement regarding the project’s risks, neither from a geopolitical standpoint, nor regarding the potential impacts of the project on Cyprus’ economy and energy market.
This is the case, he said, due to “the absence of decisions and studies which have not been completed”, as well as “regulatory decisions which have not been finalised” over the matter.
In addition, he said the government was not given access to the interconnector’s financing plan and was not privy to the details of Admie’s agreements with technology companies Nexans and Siemens for the manufacture of the interconnector’s cable and voltage convertors.
The wait for a decision had irked Skylakakis earlier in the year. He had said in April that Cyprus may miss deadlines should it delay a decision on the matter, and pointed to the European Commission’s financial support for the plan under its Connecting Europe Facility, and an extra €100m pledged through the European Union’s Recovery and Resilience Facility.
