Cyprus, Israel, and Greece will sign the long-awaited trilateral agreement on Monday, seen as the final step before construction begins on the €2.5 bln EuroAsia Interconnector electricity cable.
The wording of the Memorandum of Understanding between Cyprus Energy Minister Natasa Pilides, Israel’s Yuval Steinitz and Greece’s Costas Skrekas was finalised during a working group on February 17.
Cyprus energy ministry sources told the Financial Mirror: “Consultation between the three working groups was intense and went ahead smoothly” to draft the final document to be signed by the three energy ministers.
It will be signed in Nicosia by Pilides and Steinitz, with Skrekas joining in by videoconference.
Afterwards, the Cypriot and Israeli ministers will head for Cairo for the first official ministerial council of the East Mediterranean Gas Forum (EMGF).
The ultimate goal of the EMGF is to create a sustainable gas market in the eastern Mediterranean, reducing any technical, economic and political risks, bringing to the table oil and gas companies, investors and financial institutions.”
The EuroAsia MoU comes on the eve of the European Commission opening up a new round of applications for Projects of Common Interest (PCIs).
It has included the Israel-Cyprus-Crete electricity interconnector in the last three rounds.
“This MoU shows political will and that all three ministers are committed to the project ending the energy isolation of Cyprus, which relies heavily on fossil fuel imports for power generation,” said a source at the energy ministry.
The official added, the EuroAsia Interconnector is a priority within Commission President Ursula von der Leyen’s ‘Green Deal’ vision and is eligible for funding from the Connecting Europe Facility.
The CEF has shied away from hydrocarbon projects to drastically reduce emissions by 2030 and promote ‘clean energy’ projects and renewable sources of energy, such as electricity generated from solar farms and wind parks.
The aim is to transform the entire European Union into a zero-emission community by 2050.
Applications for the next round of PCIs will open in April.
EuroAsia has already received construction permits, has manufacturers lined up and is on target to be commissioned by December 2023.
It will interconnect the electricity grids of Israel, Cyprus, and Crete in Greece through a 1,000MW undersea cable, increasing at the next stage to 2,000MW.
It can carry electricity from clean energy producers to Europe via a 1,208 km’ electricity highway’ through converter stations built by Siemens.
The cable will also satisfy the demands for ‘energy security’ for Europe and end Cyprus’s energy isolation, the only non-interconnected EU member state.
Israel as stakeholder
Monday’s MoU will incorporate Israel as a stakeholder in the entire process.
Israel will thus comply with EU regulations for PCIs, allowing it as a major producer of clean energy to become an electricity exporter to Cyprus or Europe.
These regulations range from a fast-track licensing process to ensure funding determined by the relevant national energy regulators.
Pilides told CNA recently the EuroAsia project “is considered of great importance for the further penetration of renewable energy sources (RES) and the export potential of electricity, and will increase interest in Cyprus RES.”
A similar trilateral MoU is also underway, involving Cyprus, Greece, and Egypt for a parallel electricity project, the 1396km EuroAfrica Interconnector.
Pilides and Steinitz had a face-to-face meeting in Jerusalem three weeks ago during President Anastasiades’ visit to Israel.
According to Pilides, they “reaffirmed the strong interest and support of the two countries in the EastMed gas pipeline and the EuroAsia Interconnector electricity project, which will be a strategic energy coupling between the eastern Mediterranean and Europe”.
“Cooperation between Israel and Cyprus in the field of energy has never been better,” Steinitz added.
A recent Commission staff working document on assessing the final national energy and climate plan (NECP) for Cyprus said the island’s energy security would be improved by the EuroAsia Interconnector and an increased share of domestically sourced renewable energy.
“Cyprus aims at an interconnectivity level of 15% for 2030, which is compliant with the target set at EU level,” as it is currently an energy island with no interconnection capacity, the NECP assessment said.