The Great Sea Interconnector Budget Myth: Why Keravnos’s Reality Check Should Terrify Taxpayers
The Great Sea Interconnector Budget Myth: Why Keravnos’s Reality Check Should Terrify Taxpayers
For months, the Cypriot public has been fed a comforting fiction: that the Great Sea Interconnector (GSI) would cost a tidy €1.9 billion, end the island’s crippling energy isolation, and finally bring down some of the highest electricity tariffs in Europe. That narrative evaporated inside the House of Representatives when Finance Minister Makis Keravnos delivered a blunt reality check. The true cost of the venture, he warned MPs, could end up being a great deal higher than advertised—and whether it will ever lower consumer bills remains an open question.
This was not a hostile critique from an environmental lobby or an external detractor; it was a candid assessment from the steward of the Republic’s finances. Keravnos stripped away the political spin, clarifying that the celebrated €1.9 billion estimate covers little more than the submarine cable linking Cyprus and Greece. It excludes the myriad supporting works, agreements, and ground infrastructure essential to making the system functional. In short, the public has been presented with the bill for the subsea link while ignoring the broader costs required to plug it in.
The admission exposes a recurring syndrome in Cypriot statecraft: entering into multi-billion-euro mega-projects on partial estimates and blind optimism. The €1.9 billion figure was already an astronomical sum for a small island economy. Even with a substantial €657 million grant secured through the European Union’s Connecting Europe Facility, the wider financial framework remains fraught with uncertainty. Key institutional financing pieces remain conspicuously pending, amidst revelations that project promoter ADMIE—the Greek transmission operator that assumed control of the scheme from the original promoter, EuroAsia Interconnector—had not even submitted a formal loan application to the European Investment Bank.
Meanwhile, the state’s financial exposure is already creeping upwards. It took a knife-edge parliamentary vote of 28 to 27 just to unlock €54 million in state funding to avert payment freezes to ADMIE. Opposition leaders have rightly pressed the government for answers, demanding clarity on the terms under which Cyprus will deliver a further €125 million pledged to the enterprise. With every parliamentary hurdle, the margin between fiscal prudence and open-ended liability narrows.
The often-cited €1.9 billion figure covers only the submarine cable, leaving taxpayers exposed to mounting ancillary costs and questionable economic returns.
Perhaps the most damning aspect of Keravnos’s testimony was his scepticism regarding electricity prices. The interconnector has been aggressively promoted as an economic panacea that would liberate Cypriot households from punitive energy bills. If the finance minister himself is openly questioning whether the project will bring down the cost of electricity, on what analytical basis is the state committing vast sums of public capital?
When the full scope of construction and auxiliary obligations is factored in, the GSI risks breaking through its budget ceilings while failing to deliver on its primary economic promise. Cypriot taxpayers have every right to be alarmed: the island is marching into another colossal infrastructural commitment where the final costs remain unquantified and the headline benefits are officially in doubt.