Cyprus power link project moves toward restart as Greece clears surveys

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Cyprus power link project restart

Highlights

Greece authorized new seabed surveys for the 1,000MW Great Sea Interconnector after Turkey signaled eased tensions, reviving the project’s timeline.
Meridiam acquired a 66% stake in GSI and Nexans reached a separate agreement supporting renewed surveys, adding momentum to the €1.9 billion project.
The undersea cable, now targeted for completion in 2031, has €657 million in EU funding but faces rising cost uncertainty and investor resistance in Cyprus.

Diplomatic progress revives cable timeline

As reported by Financial Times, the troubled project is set to resume after Greece authorised new seabed surveys and Turkey appeared to signal lower tensions over disputed eastern Mediterranean waters. Ankara has argued that its permission is needed for the work, while Athens says no such consent is required.

The Great Sea Interconnector is a planned 900km undersea cable between Crete and Cyprus with capacity of 1,000MW. First proposed in 2012, it has repeatedly been delayed by maritime disputes between Greece and Turkey, including a July 2024 incident in which Turkish warships challenged an Italian-flagged research vessel operating south of the Greek islands of Kasos and Karpathos.

Momentum increased in August when French infrastructure investor Meridiam acquired a 66 per cent stake in GSI, while a separate agreement involving French cablemaker Nexans supported renewed surveys. Over the weekend, Turkish foreign minister Hakan Fidan told Greek newspaper Kathimerini that the dispute over navigational warnings had been resolved, while Greek Prime Minister Kyriakos Mitsotakis said French talks with Ankara did not amount to a request for permission.

Energy security and cost pressures remain central

The cable is designed to allow electricity to flow in both directions, giving Cyprus access to the wider European market and creating scope to export surplus renewable power as solar capacity expands. It could also reduce the island's dependence on imported fossil fuels, which still account for most of its power generation.

Originally budgeted at 1.9 billion euros, the project has secured 657 million euros in EU funding, the largest grant ever awarded to an electricity interconnection project. Brussels has designated it a project of common interest, but the final cost remains uncertain after Cyprus's energy regulator warned last month that the original budget would not be enough.

Beyond geopolitical friction, the project has also faced delays from disagreements between Athens and Nicosia over cost-sharing and resistance from some investors in Cyprus to opening the island's electricity market. The scheme is now expected to be completed in 2031 and is eventually intended to extend to Israel, creating a broader electricity connection between Europe and the eastern Mediterranean.

We have previously noted how S&P flagged rising sovereign borrowing risks amid geopolitical shocks and elevated fiscal spending.

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