The Electricity Authority of Cyprus (EAC) on Monday denied it has already decided to invest €43 million into upgrading its power plant at Dhekelia, following allegations by an association of businesses.

The EAC was responding to a statement put out earlier by the Electricity Market Association – the association representing providers of energy generated by renewables.

The association cited recent media reports to the effect that the EAC intends to withdraw from Etyfa – the Natural Gas Infrastructure Company. Etyfa is a subsidiary of Defa, the Natural Gas Public Company.

According to the Electricity Market Association, the EAC wants to take back the €43 million it has invested in Etyfa as a shareholder, and use these funds to invest in two internal combustion engines at the Dhekelia power station.

“If true, this contradicts the government’s policy concerning the EAC’s participation in Etyfa,” read the statement.

“Even more alarming is the fact that the EAC will use these funds in order to impose the continuation of its monopoly on the electricity market and to boost its dominant position.”

The association urged the energy ministry to “act immediately” by pointing out to the EAC that it must adhere to government policy. Also, the energy regulator should reject the EAC’s application to build the two internal combustion engines without the appropriate tendering procedure.

“The EAC’s application should be considered only if no interest exists from the private sector.”

Asked to comment, EAC spokesperson Christina Papadopoulou told the Stockwatch news outlet that they have indeed asked for permission to pull out of Etyfa as a shareholder.

The EAC has a 30 per cent stake in Etyfa.

Papadopoulou said that, following a review of the shareholding agreement, the EAC has asked the energy minister for permission to withdraw from Etyfa. The minister has yet to reply.

“No decision has yet been taken on how these funds [the share in Etyfa] would be used, if and when they are returned,” she added.