Authorities in Cyprus risk losing out on EU funds unless they quickly come to a final arrangement concerning the purchase and installation of smart meters, the boss at the Electricity Authority of Cyprus (EAC) told lawmakers on Monday.

Giorgos Petrou, chairman of the board at the EAC, was speaking in parliament reviewing his organisation’s budget for 2024.

Petrou spoke of the EAC’s recent decision to award the contract for the purchase and installation of smart meters for homes and businesses across Cyprus. The contract was awarded to the Cyprus Telecommunications Authority (CyTA), but that decision has since been challenged with the Tenders Review Authority by one of the other bidders.

The EAC boss said there is a risk that Cyprus might lose the related funds designated in the Recovery and Resilience Facility.

Under the schedule, Cyprus now has until the end of March to seal the awarding of the contract, which provides for the procurement and installation of 400,000 smart meters.

More specifically, authorities need to receive 50,000 smart meters and install 15,000 of them by September of this year, and next receive all 400,000 and install 250,000 of them by June 2026.

Otherwise Cyprus will fall foul of the commitments undertaken towards the Recovery and Resilience Facility.

CyTA landed the contract for €39.9 million. The other two bidders were New Cytech Business Solution (€37.6 million bid) and Logicom Solutions Ltd (33.6 million bid). It’s understood that the latter is the company taking recourse at the Tenders Review Authority.

Taking other questions from MPs, Petrou asked for “a few more days” for the EAC to come to a decision on whether or not to drop its prior request for a 6 per cent hike on electricity bills.

At any rate, he added, the energy regulator has the final say – should the EAC decide to insist on the rate hike.

The EAC board and the energy regulator are scheduled to meet this coming Wednesday, when the matter will be discussed.

Regarding the saga with the natural gas liquefaction (LNG) terminal at Vasiliko, Petrou confirmed that construction works there have ceased for the last month.

He said the government is keeping them in the loop about the situation. It was his understanding that, whereas the government has contacted the consortium, the latter has not responded.

Regarding plans to upgrade the Dhekelia power plant, Petrou reiterated that they intend to purchase two internal combustion engines. The combined cost comes to an estimated €80 million, while the purchase of storage batteries would bring that number up to €110 million.

Speaking to the challenges lying ahead for the EAC, Petrou noted that last year the organisation paid €256 million for greenhouse gas allowances. These costs would drop radically were the EAC to transition to burning natural gas.

The official said the new turbine being installed at Vasiliko – the island’s flagship power station – is designed to burn natural gas. Although it could be converted to also burn hydrogen.

The EAC’s balance sheet for 2024 involves expenditures of €2.395 billion and revenues of €2.103 billion.

Petrou said €250 million concern ‘unforeseen’ fuel expenses and the purchase of electricity.