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Great Sea Interconnector Project Faces Heightened Cost And Viability Scrutiny

by THEFUTURE.TEAM

December 5, 2025

In a recent House Finance Committee session, critical issues surrounding the cost and long-term viability of the Great Sea Interconnector (GSI) were brought into sharp focus. The project has become a focal point amid ongoing concerns over budgetary deficits at the Cyprus Energy Regulatory Authority (Cera), which continues to operate at a deficit for the sixth consecutive year.

Project Cost Concerns

During the session, Cera Vice-Chairman Alkis Philippou acknowledged that EU-backed projects of common interest typically receive state subsidies due to their initial lack of financial viability. However, Philippou warned that escalating costs could ultimately undermine the sustainability of such essential infrastructure initiatives. Committee Chairman Polyvios Lemonaris highlighted unresolved issues, notably the final cost of substations, and pointed out that remaining technical challenges—such as incomplete seabed surveys and uncertainties in the cable-laying process—might necessitate additional expenditures and infrastructure enhancements.

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Budgetary Implications and Fiscal Oversight

In addressing the myriad financial challenges, lawmakers expressed a demand for comprehensive clarification, emphasizing both the impact on public finances and the importance for citizens. Lemonaris provided further insight into Cera’s 2026 budget, which projects a significant deficit of €2.8 million against revenues of €3.1 million and expenditures of €5.9 million, with nearly half of the expenditure allocated to staff salaries. Despite these short-term imbalances, current reserves are expected to cushion the deficit and leave €2.2 million in the accounts by year’s end. Additionally, annual fees currently represent 87% of revenue while salaries consume 48% of expenditures. A revised fee structure has already been proposed to steer the agency toward a balanced budget.

Market Dynamics And Project Timelines

Lemonaris also touched upon broader market developments, noting that the electricity market officially opened to competition on October 1. However, with only two producers, 11 suppliers, and a handful of renewable energy stakeholders currently active in the sector, wholesale pricing remains in line with transitional arrangements. He expressed optimism that the natural forces of competition would help stabilize—and eventually drive down—prices once the market matures.

Looking Ahead

The critical nature of completing interconnection projects on schedule was underscored by committee members, who warned that delays could leave Cyprus with constrained energy capacities post-2029. While Greece’s independent transmission system operator, Admie, has yet to signal any changes to the December 31, 2029, completion deadline, ongoing technical reviews and pending reports from the natural gas administrator are set to outline the necessary infrastructure improvements. Lawmakers continue to monitor these developments closely, recognizing the far-reaching implications for both national energy security and fiscal stability.

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Central Bank Of Cyprus Balance Sheet Reflects Strong Eurosystem Position

by THEFUTURE.TEAM

February 17, 2026

Overview Of Financial Stability

The Central Bank of Cyprus (CBC) has released its latest balance sheet, reaffirming its steadfast role within the Eurosystem. The balance sheet, featuring total assets and liabilities of €29.545 billion, underscores the institution’s stable financial posture at the close of January 2026.

Asset Allocation And Strategic Holdings

Governor Christodoulos Patsalides issued the balance sheet, which details the CBC’s asset composition under the Eurosystem framework. Notably, the bank’s gold and gold receivables amounted to €1.635 billion, providing a significant hedge and stability to its balance sheet. Additional asset categories include claims on non-euro area residents denominated in foreign currency at €1.099 billion, while claims on euro area residents in both foreign and domestic currency add further depth to its portfolio.

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The most substantial asset category, intra-Eurosystem claims, reached €19.438 billion, an indication of the CBC’s deep integration with its European counterparts. Furthermore, euro-denominated securities held by euro area residents contributed €6.587 billion. Despite a marked emphasis on these areas, lending to euro area credit institutions in monetary policy operations recorded no activity during the period.

Liability Structure And Monetary Policy Implications

On the liabilities side, banknotes in circulation contributed €3.218 billion. Liabilities to euro area credit institutions associated with monetary policy operations were notably the largest single category, totaling €17.636 billion. Supplementary liabilities included those to other euro area residents, which aggregated to €4.989 billion, with government liabilities playing a predominant role at €4.754 billion.

Other liability items, such as claims related to special drawing rights allocated by the International Monetary Fund at €494.193 million, and provisions of €596.571 million, further articulate the CBC’s exposure. Revaluation accounts stood at €1.643 billion, and overall capital and reserves were confirmed at €333.822 million, completing the picture of a well-capitalized institution.

Conclusive Insights And Strategic Alignment

The detailed breakdown illustrates the CBC’s sizeable intra-Eurosystem exposures, reinforcing its central role within Europe’s monetary landscape. With an asset-liability balance maintained at €29.545 billion, the CBC’s financial position remains robust, indicating a commitment to structural stability and strategic risk management.

This fiscal disclosure not only provides transparency into the CBC’s operations but also serves as a benchmark for comparative analysis among other central banks within the Eurosystem, highlighting the intricate balance between asset liquidity, regulatory oversight, and monetary policy imperatives.