The European Union has allocated 657 million euros for the construction of a 2,000 megawatt submarine power cable that will connect the power systems of Israel, Cyprus and Greece, said Minister of Energy of Cyprus Natasa Pilides, AP reported.
According to her, the funding is the largest investment ever made by Cyprus and also the lion's share of the total allocated this year by the Europe Connectivity Fund, which finances infrastructure projects, to one project.
The money will enable the crews to begin construction of a cable segment that will connect Cyprus to Crete, at a total cost estimated at around 1.6 billion euros. It is expected that negotiations on the transfer of funds will be completed this summer.
Pilides said that in addition to the geopolitical weight of the project, it will ensure the energy security of Cyprus, increase competitiveness in the energy supply sector and help the island nation more easily transition to a green economy.
With the completion of the cable, more investment in renewable energy is expected to improve the energy mix of Greece, Cyprus and Israel. Pilides noted that the study shows that the cable, combined with energy storage, could increase Cyprus' use of renewable energy by more than 50% by 2030.
Last October, Pilides and her Greek and Israeli counterparts signed an agreement to speed up the technical work on the cable, dubbed the Eurasia Interconnector.
The first phase of the cable is expected to be completed by 2025.
The switch to an electric cable line appears to have supplanted plans for a potential pipeline link between the three countries to transport gas from existing and potential fields off the coast of Cyprus and Egypt to Europe via Greece.
Support for the so-called Eastern Mediterranean gas pipeline project has waned amid questions about its feasibility as well as its adverse environmental impacts.
Cypriot President Nikos Anastasiadis said last week that the pipeline's feasibility studies were still ongoing, but other alternatives were open to bringing gas to markets.
One of the most likely options is to transport the Cypriot gas to Egyptian refineries, where it will be liquefied for export by sea.