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Cyprus Eyes United Arab Emirates Partnership On Landmark Subsea Cable Project

by THEFUTURE.TEAM

September 9, 2025

Strategic Political Engagement

Cyprus has turned to the United Arab Emirates as it looks to forge a stronger cooperative bond to develop an ambitious EU-financed subsea power cable. This initiative, designed to link Europe with the eastern Mediterranean, underscores Cyprus’ unwavering backing of the project. In a recent meeting, Cypriot President Nikos Christodoulides and his foreign minister held discussions with UAE leadership to explore the potential for joint investment and broader collaboration in related sectors.

Investing In Infrastructure and Future Growth

The dialogue marks a notable step forward in international energy infrastructure, paralleling the vigorous political interest in regional connectivity. The discussions come in the wake of remarks from Greek Prime Minister Kyriakos Mitsotakis, which prompted Cyprus to elaborate on its strategic plans. A partnership with the UAE could not only inject fresh capital into the project but also signal robust, multinational support in an era when energy security and sustainability are paramount.

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Technical Milestone With Global Implications

At a length of 1,240 km and reaching depths of 3,000 metres, the cable – currently under construction by Greek transmission operator Admie – is poised to become the world’s longest high-voltage and deepest subsea link. Building on nearly a decade of groundwork by Cyprus-based developers, the project now navigates complex financial and operational challenges, including clarifications on overall cost, viability, and accountability for delays.

Regulatory Hurdles And Future Outlook

Adding to the scrutiny, European prosecutors recently initiated an investigation into potential criminal offences related to the €1.9 billion venture that aims not only to connect Cyprus with Greece but also extend to Israel. Despite these challenges, the trilateral support from Cyprus, Greece, and Israel is a robust testament to the project’s strategic importance and its potential to reshape regional energy dynamics.

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Cyprus Economic Resilience: Real GDP Growth Driven By Key Sectors In 2025

Macro-Economic Overview

The Statistical Service of Cyprus (Cystat) released its first estimate for 2025, showing that the country’s Gross Domestic Product increased by 3.8% in real terms and 4.5% at current prices. In real terms, GDP reached €30.52 billion, reflecting continued economic expansion compared with 2024. Nominal GDP rose to €36.32 billion, indicating higher overall economic activity during the year.

Diverse Sectoral Contributions

According to the production approach, growth was mainly supported by several key sectors of the economy. These included Information and Communications, Hotels and Restaurants, Construction, and Wholesale and Retail Trade, including motor vehicle repairs. The performance of these sectors contributed to the overall increase in economic output during 2025.

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Consumption, Investment, And Trade Dynamics

Data based on the expenditure approach show that public consumption increased by 6.7%, reaching €6.82 billion. Private consumption rose by 3.7% to €20.65 billion. Gross fixed capital formation grew by 2.3%, reaching €7.35 billion, reflecting continued investment activity. Exports increased by 5.3% to €35.52 billion, while imports rose by 4.9% to €34.04 billion. The increase in imports moderated the overall contribution of external trade to GDP growth.

Quarterly Insights: Strong Fourth Quarter Performance

Separate data from Cystat indicate that seasonally adjusted real GDP grew by 4.5% in the fourth quarter of 2025 compared with the same period in 2024, reaching €7.76 billion. Quarterly, GDP increased by 1.4% compared with the third quarter of the year. Growth during the period was mainly recorded in Wholesale and Retail Trade, Information and Communications, and Hotels and Restaurants. The figures confirm continued economic expansion across several sectors of the Cypriot economy during the final quarter of 2025.