Cabinet’s final decision over the regulatory framework of the leg of the Great Sea Interconnector project which runs between Crete and Cyprus was delayed for another day on Wednesday, with an extraordinary cabinet meeting now scheduled for Thursday.

A decision had been expected on Wednesday, with meetings between President Nikos Christodoulides, attorney-general George Savvides, Finance Minister Makis Keravnos and Energy Minister George Papanastasiou taking place throughout the day.

However, the government stopped short of reaching a final decision on the matter in the end.

Speaking on the matter on Wednesday evening, government spokesman Konstantinos Letymbiotis said the government has requested “clarifications” on the matter of the interconnector, and that “final decisions” will be made pursuant to those clarifications being made.

“Any decisions made by the Republic of Cyprus will be made in the service of the main goal that has been set, that being that electricity bills are not burdened by additional amounts before the project is completed,” he said.

He added that the government had been in contact with the Greek government and the European Investment Bank “for days”, and that it had set as its priority that “the project works for the benefit of the consumer.

“What must be taken into account is the benefit for the Cypriot consumer, the benefit for electricity, for each of our bills, and that is what is being evaluated. These clarifications have been requested. As a responsible government, with due diligence, with due responsibility, we have to evaluate all these parameters,” he said.

It had been reported that “serious concerns” had been raised over whether the government is legally required to secure parliament’s approval before committing to the project.

The most recent hitch in negotiations centred on Greece’s independent power transmission system operator Admie’s request for Cyprus to pay a total of €125 million between 2025 and 2029 – before the interconnector is operational.

In the end, a solution to the matter had reportedly been reached, with the Cypriot government set to utilise funds made available to it through the European Union’s emissions trading system (ETS) to pay the required €125m.

Admie had reportedly initially driven a hard bargain on the matter but, faced with the spectre of the project’s collapse and the possibility of being liable for tens of millions of euros to cable producer Nexans, which had already been commissioned to start the project, they reportedly eventually backed down.

As such the government managed to ensure that no more than €125m would be paid to Admie over this period for this purpose.

The government will still be liable for other “reasonable construction expenses” requested by Admie, which would be recoupable through Cypriot consumers’ electricity bills, but only once the interconnector becomes operational.

Earlier on Wednesday, energy expert Charles Ellinas described the idea of using ETS funds to pay Admie as a “sound investment”.

He told the Cyprus News Agency that the Cypriot government currently pays the EU between €200m and €300m as “emission rights” due to its continued burning of fuel oil to produce electricity.

The EU returns around 90 per cent of this to the country and keeps the rest for other investments.

Access to ETS funds requires countries to use at least half of the money returned to invest in projects related to climate change, but, as Ellinas said, “such a thing does not happen in Cyprus.”

As such, he said, using these funds to pay towards the Great Sea Interconnector would be “a positive”.

“I support this because the money should be used for projects related to climate change. Interconnection is a climate change-related project, so it is a sound investment,” he said.

He went on to say that as the interconnector will not be operational until 2030, the benefits will only be felt in the long term, but that those eventual benefits will include an increase in renewable energy use in Cyprus, the export of “clean energy” to other countries, and “the import of more clean energy at low prices”.

“I believe that interconnection will lead to a significant reduction in renewable energy prices and will increase competition, which currently does not exist in Cyprus,” he said.

However, not everyone was enamoured with the idea of using ETS funds to finance the interconnector.

Green Party MP Charalambos Theopemptou had told the Cyprus Mail on Tuesday that the idea had been met with furious opposition from experts within the electricity authority (EAC).

He said people inside the EAC had insisted that “investing in the island’s own infrastructure is the only sane priority”, with projects including fixing the Dhekelia power station and building up Cyprus’ energy storage capacity said to be priorities.

The €125m payable over five years to Admie is separate from the €100m buy-in to the project’s holding company, which Cyprus is required to pay if it wishes to buy itself into the project.

On that matter, the Cypriot government has demanded access to a cost-benefit analysis and the time to evaluate it before coming to a final decision, but the finance ministry’s permanent secretary George Panteli had said last week that Cyprus’ authorities have not yet seen the project’s financing plan.

He said his ministry is at present “not in a position to put forth” any concrete statement regarding the project’s risks, neither from a geopolitical standpoint, nor regarding the potential impacts of the project on Cyprus’ economy and energy market.

This is the case, he said, due to “the absence of decisions and studies which have not been completed”, as well as “regulatory decisions which have not been finalised” over the matter.

In both cases, the matter of “geopolitical risk” is taking increasing precedence, with fears growing regarding the region’s potential geopolitical volatility.

The issue of “geopolitical risk” relates to possible interference with the laying of the cable by Turkish warships in the Aegean. Admie had sought reassurances that should anything occur beyond its control which would hinder the interconnector project, including Turkish interference, it would be able to recover the investments it had made up to that point.

With this in mind, Admie had asked the Cyprus Energy Regulatory Authority (Cera) to “diversify its regulatory framework to cover the geopolitical risk” of the project.

The current regulatory framework provides that the matter of covering costs of the project should it not be completed due to “geopolitical factors” “may” be considered by the regulatory authority, with George Papanastasiou and Cera chairman Andreas Poullikkas both in agreement that the current laws on the matter suffice.

Papanastasiou last week pointed out that Admie had requested six regulatory changes, and that Cera had accepted four of them.

“The two that are left are very important, and we responded in writing to Admie that Cera’s position is clear: consumers cannot shoulder any costs without benefitting,” he said