Cyprus minister hails project to link island, Israel to European electricity grid

Cyprus's energy minister, Damianos Damianos, has lauded the French investment company Meridiam's backing of the Great Seas Interconnector project. This ambitious electricity cable aims to connect the power grids of Cyprus and Israel to the European grid, potentially ending the region's energy isolation and establishing a new energy and trade corridor to the Gulf and India, aligned with European Union objectives.

However, the project faces significant hurdles related to its escalating costs, which have surpassed the initial estimate of $2.2 billion. A forthcoming European Investment Bank report is expected to provide clarity on the final cost. This is a critical concern for Cyprus, as an existing agreement places the burden of up to 63% of the construction costs on Cypriot energy consumers, which would lead to a substantial increase in electricity prices. Efforts are underway to secure additional private investment and explore further EU funding to alleviate this financial pressure on consumers.

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It’s a very important project for Europe because it connects Cyprus which is isolated to the European grid. And the idea is to then proceed and connect to Israel.

Beyond the interconnector, Cyprus is emerging as a vital alternative energy source for Europe. Minister Damianos announced that natural gas from an undersea deposit off Cyprus could begin supplying European markets as early as March 2028. This development is particularly significant given the ongoing war in Ukraine and instability in the Middle East, which have compelled Europe to diversify its energy sources. Partners TotalEnergies and Eni recently committed to developing the Cronos natural gas field, marking the first time gas from East Mediterranean deposits will be supplied to European markets.

The consortium plans to construct a pipeline from the Cronos field to Egypt's Zohr natural gas deposit within 18 months. The gas will then be processed at Egypt's Damietta facility, liquefied, and transported to Europe by ship. This strategic move positions Cyprus and the wider East Mediterranean region as crucial players in ensuring Europe's energy security during a period of global geopolitical uncertainty.

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It’s important for Europe at this time because of the war in Ukraine, because of this situation in the Middle East, that Cyprus is going to be an alternative source of gas.