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Cyprus

EAC wants another €45 million for this year

The state-owned Electricity Authority of Cyprus (EAC) is requesting an additional €45 million for this year, mostly to cover the higher-than-expected cost of fuel purchases and carbon credits.

At the House finance committee on Monday, discussing the power company’s supplementary budget, MPs were told the extra funds are needed because the EAC had previously made conservative estimates of its fuel expenditures.

Lawmakers heard that, up until August of this year, electricity consumption had risen 4 per cent, year-on-year – something the EAC had not anticipated for 2017.

And due to weather conditions, power generation from renewable energy sources was likewise lower than expected.

This required the purchase of additional fuel for the island’s power stations.

Total fuel expenditures for 2017 had initially been budgeted at €316.8 million; the revised figure is now €349.5 million.

Moreover, due to increased use of fossil fuels, the EAC needs an extra €7.5 million for EU emissions allowances. Initially the cost of the allowances was budgeted based on €4 per tonne, but the price of the allowances has since risen to €7 a tonne.

The EAC imports heavy fuel oil to power its stations.

The company is also asking for an additional €6.7 million to cover payroll expenses. Of this, €6 million will go toward pension payouts, and €700,000 to overtime pay for staff working at the electricity sub-stations and the distribution network.

The supplementary budget is to be put to the plenum this Friday.

All in all, the various government departments and state-run organisations are collectively asking for some €261 million in extra funds for 2017.

The finance ministry claims the overall supplementary budget will not derail the fiscal target set for 2017, which is a budget surplus of 0.9 per cent of GDP.

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