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General Auditor Warns Of Regulatory Shortcomings And Energy Sector Delays

Concerns Over Strategic Energy Projects

The General Auditor, during his interview on RIC1’s “Apo Mera Se Mera,” raised significant concerns over persistent delays and inconsistencies in critical energy sector projects. His remarks, which cover issues ranging from terminal natural gas processing (Terminal Natural Gas) to electric interconnection (Electric Interconnection), and the prolonged inertia in the utility’s entry into photovoltaic energy, have resonated powerfully with the public. Investors and consumers alike view his concerns as both genuine and justified.

Investigations Grounded In Ongoing Inquiries

According to sources at Fileleftheros, the Auditor’s statements were not intended as a precursor to imminent actions by the Audit Service; rather, they are the outcome of comprehensive investigations and ongoing contacts that are expected to reach a conclusion in the near future. These in-depth inquiries shed light on potential mismanagement and systemic regulatory failures affecting the management of energy assets.

Delayed Photovoltaic Licensing And Market Manipulations

Among the most critical issues is the languid pace at which the national electricity utility, AHK, has pursued licenses for large-scale photovoltaic parks. By delaying these projects, the AHK has not only increased its levelized cost per kilowatt-hour but has also indirectly favored a small group of private energy producers. These private entities have capitalized on market transitions during reform periods, benefiting significantly in the competitive energy market while the majority of consumers continue to endure high electricity prices. This discrepancy raises serious questions about the allocation of responsibilities between the AHK’s management, the previous energy ministry, and the regulatory authority at General Auditor.

Emergence Of A New Energy Suppliers Association

Adding a further dimension to an already complex scenario is the establishment of the newly formed Association of Electricity Suppliers Representatives (S.E.P.I.E.). Formed in late November, the association aims to provide specialized representation for private suppliers in a market where they ostensibly operate as competitors. Regulatory bodies, including the energy regulatory authority (EPA), may soon scrutinize the legitimacy of such collective actions, which some fear could lead to cartel-like behavior detrimental to consumer interests.

Addressing Infrastructure And Market Inconsistencies

Beyond the photovoltaic and market representation issues, the General Auditor also criticized inconsistencies in other critical projects. He highlighted that the liquefied natural gas reprocessing unit was provided until the end of December to complete its operations, with a contingency plan to deploy an auditor to investigate further if milestones remain unmet. Similarly, he pointed out conflicting government statements regarding the completion of the strategic cable project—a venture that continues to leave consumers locked in with high electricity prices due to insufficient natural gas supplies and limited competition from international energy firms.

The Road Ahead

The forthcoming comprehensive report by the Audit Service—expected by the end of January—will cover serious operational and managerial shortcomings at AHK. As investigations progress, the General Auditor and his team remain committed to unveiling any confluences of regulatory neglect and market manipulation affecting the national energy landscape. The ultimate aim is to recalibrate conditions so that consumers benefit more directly from energy market reforms and cost efficiencies.

Bank of Cyprus Upgrade Signals Fresh Optimism For Greek And Cypriot Banks

Regional Banks Enter A More Favorable Cycle

Bank of Cyprus and Eurobank are well positioned to benefit from a renewed re-rating of Greek and Cypriot bank stocks, according to Cyprus-based investment firm Roemer Capital, which upgraded Bank of Cyprus to a buy rating and reaffirmed its positive view on Eurobank.

The firm cited easing geopolitical tensions, resilient economic growth in Greece and Cyprus, lower funding costs and Greece’s expected transition to developed-market status as the main factors supporting the sector.

Roemer Capital also lowered its cost of equity assumptions, updated its forecasts following first-quarter 2026 results and extended its valuation horizon to the end of 2027, raising target prices across its banking coverage.

Bank Of Cyprus Gets The Largest Upgrade

Bank of Cyprus received the biggest revision, with Roemer Capital upgrading the stock from hold to buy and setting a target price of €11.10, implying potential total upside of 27%.

The firm highlighted the bank’s strong capital generation, profitability and projected 100% dividend payout, describing it as the strongest capital-return story among the banks under coverage. Roemer Capital maintained its buy rating on Eurobank, assigning a target price of €4.90 and forecasting potential upside of 28%. The report said the bank is well placed to benefit from loan growth, improving operating performance and merger-and-acquisition synergies.

National Bank of Greece and Piraeus Bank also retained buy ratings, with expected returns ranging from 25% to 36%. Optima Bank was upgraded to buy, while Alpha Bank remained at hold on valuation grounds.

Why Growth Still Sets The Region Apart

According to Roemer Capital, Greek and Cypriot banks continue to benefit from stronger economic fundamentals than many western European peers. The report pointed to faster economic growth, healthier balance sheets, low levels of non-performing exposures, capital ratios approaching 20% and strong customer deposit bases.

Analysts expect performing loans across the sector to grow at a compound annual rate of 6% to 8% through 2028, supported by private investment, digitalisation, green manufacturing, supply-chain expansion and a gradual recovery in household lending.

The report also said the conclusion of lending under the EU Recovery and Resilience Facility is unlikely to materially affect credit growth, as banks have already shifted back towards traditional commercial lending. Roemer Capital expects Euribor to remain between 2.2% and 2.5%, a level it believes should support both lending activity and net interest margins.

Geopolitics, Valuation And Market Structure Support The Case

The report said improving geopolitical conditions have strengthened the investment outlook, noting that Brent crude prices have largely returned to pre-war levels while Greek government bond yields have stabilised at around 3.5%. Although geopolitical risks remain, Roemer Capital believes the likelihood of a major inflationary shock or significant pressure on bank profitability has eased.

Another important catalyst identified by the firm is Greece’s expected promotion to developed-market status by FTSE Russell, STOXX and MSCI over the coming months.

According to the report, the reclassification should improve liquidity and attract a broader base of international investors. Roemer Capital also said Euronext’s acquisition of the Athens Exchange is expected to strengthen market infrastructure and increase international visibility, particularly for Bank of Cyprus and Optima Bank.

The firm noted that Bank of Cyprus has already benefited from its Athens listing, with average daily trading value increasing from less than €400,000 before its September 2024 move to nearly €6 million afterwards.

Economic Momentum Remains A Core Tailwind

Roemer Capital said both Greece and Cyprus have moved beyond post-crisis recovery and are now supported by private-sector-led growth. For Cyprus, the report highlighted recent tax reform and efforts to simplify the legal and regulatory framework, while also noting that limited foreign banking competition continues to support domestic lenders.

Overall, Roemer Capital expects Greek and Cypriot banks to remain well-positioned for profitable loan growth over the coming years.

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