Greece and Cyprus Engage in Critical Talks to Resolve Great Sea Interconnector Disputes

Greece and Cyprus are currently engaged in a critical 48-hour period of discussions aimed at resolving outstanding disputes concerning the ambitious Great Sea Interconnector (GSI) energy cable project. This multi-billion-euro initiative, designed to link the power grids of Greece, Cyprus, and eventually Israel, is facing both financial disagreements and significant geopolitical tensions in the Eastern Mediterranean. The urgency of the talks underscores the commitment of both nations to advance a project deemed crucial for regional energy security and the integration of Cyprus into the European electricity network.

Project Overview and Strategic Importance

The Great Sea Interconnector, formerly known as the EuroAsia Interconnector, is envisioned as one of the world's longest and deepest submarine power cables. It aims to establish a green, reliable, and bidirectional subsea connection, initially between Greece (Crete) and Cyprus, and later extending to Israel. The project's total length is approximately 1,208 kilometers, with the section between Cyprus and Greece spanning 898 kilometers. With an initial capacity of 1,000 MW, expandable to 2,000 MW, the GSI is projected to end Cyprus's energy isolation, enhance energy security for all three nations, reduce CO2 emissions, and provide an alternative energy supply route for Europe. The estimated cost for the Greece-Cyprus section is around €1.9 billion, with the European Union's Connecting Europe Facility (CEF) contributing €657 million in funding. Greece's Independent Power Transmission Operator (IPTO/ADMIE) took over as the implementing entity in late 2023/early 2024.

Key Disputes and Financial Hurdles

Recent tensions have primarily revolved around financial aspects and cost allocation. Greece's ADMIE reportedly filed a formal objection with the Cyprus Energy Regulatory Authority (CERA), challenging a decision on expense recovery. ADMIE is seeking recognition for €251 million in expenses already incurred, while CERA had approved €82 million, allowing only €25 million for 2025. This dispute appears to challenge both the July 2024 regulatory framework and a bilateral agreement between Nicosia and Athens. Under this framework, Cyprus committed to contributing €25 million annually from 2025 to 2029, totaling €125 million, and is expected to cover 63% of the project's expenses, with Greece covering the remaining 37%. Cypriot Finance Minister Makis Keravnos has previously voiced reservations about the project's economic viability and potential costs to consumers.

Geopolitical Context and External Challenges

Beyond financial disagreements, the GSI project is set against a backdrop of complex geopolitical dynamics in the Eastern Mediterranean. Turkey has consistently opposed the interconnector, viewing it as a challenge to its influence and maritime claims in the region. Incidents involving Turkish warships disrupting seabed surveys near Kasos and Karpathos have highlighted these tensions. While Greece and Cyprus have delimited their Exclusive Economic Zones (EEZs), a bilateral demarcation agreement remains unsigned, further complicating the regional energy landscape. Despite these challenges, Israel has reiterated its strong support for the GSI, emphasizing its importance for regional energy security and integration into the European energy framework.

Path Forward: High-Level Consultations

In response to the escalating issues, Greek Environment and Energy Minister Stavros Papastavrou and his Cypriot counterpart Georgios Papanastasiou recently met in Athens. They agreed to facilitate a meeting between the energy regulators of both countries (RAE and CERA) and the implementing body, IPTO. A teleconference is also scheduled for next Tuesday, with the participation of European Union Energy Commissioner Dan Jørgensen, indicating the EU's continued involvement in resolving the impasse. Cypriot President Nikos Christodoulides has sought to downplay the severity of the dispute, asserting that relations between the two governments remain 'stronger than ever'. Meanwhile, the Cypriot government officially transferred the license and management of the GSI project to Greece's ADMIE on October 11, 2025, a decision made on September 3, 2025, reflecting a formal commitment to the project.