EU-backed Cyprus power link stalled by geopolitics and funding disputes
"The €1.9 billion Great Sea Interconnector subsea cable project, intended to end Cyprus’s energy isolation by linking the grids of Greece, Cyprus, and Israel, faces significant delays amid maritime geopolitical disputes with Turkey and unresolved financing disagreements between Athens and Nicosia."
EU Directive 2019/790 Article 15 Attribution • Verified Energy Document
A vital European Union initiative to integrate Cyprus into the bloc's electricity grid is facing significant delays, caught between escalating regional geopolitical tensions and unresolved financial disagreements. The Great Sea Interconnector (GSI), a €1.9 billion subsea cable project designed to connect the power networks of Greece, Cyprus, and Israel, has missed its original 2024 operational target.
The 1,200-kilometre cable is intended to end Cyprus’s status as the only EU member state without an electricity interconnection, bolster regional energy security, and facilitate increased use of renewable energy, potentially leading to lower electricity bills for Cypriot consumers. The European Commission has already committed €657 million, designating it a strategic project to modernize EU grids and accommodate clean power growth. However, the ambition for a more connected European energy system is encountering substantial real-world obstacles.
Geopolitical Hurdles in the Eastern Mediterranean
The most immediate challenge stems from Turkey’s assertive maritime claims in the eastern Mediterranean, which overlap with sections of the proposed cable route. Greece maintains sovereign rights over its continental shelf and exclusive economic zone in these waters, particularly south and east of Crete and Kasos, under the UN Convention on the Law of the Sea. Turkey, not a signatory to UNCLOS, disputes this interpretation, arguing that islands should not automatically generate full maritime zones where they intersect with continental shelf claims.
This dispute has already manifested in practical terms. In 2024, Greek authorities postponed parts of the offshore survey program following the deployment of Turkish naval vessels in areas designated for survey work. While direct confrontation was avoided, these incidents underscore the inherent risks for infrastructure projects in contested maritime zones.
Klaus Dodds, a professor of geopolitics at Royal Holloway, University of London, noted that Turkey perceives the GSI as a challenge to its maritime boundaries and an unwelcome alignment between Greece, Cyprus, and Israel. He added that Ankara views this trilateral cooperation with suspicion and would prefer to advance its own rival subsea electricity link between Turkey and the Turkish Republic of Northern Cyprus – a breakaway state recognized solely by Turkey. The European Commission, however, has explicitly stated its political and financial support for the GSI as the sole solution for Cyprus’s energy isolation.
A Commission spokesperson reiterated the EU’s strategic interest in a stable Eastern Mediterranean, committing to defend its interests and those of its member states. Haşim Tekineş, a policy researcher at the Institute for Diplomacy and Economy, highlights that Turkey's "Blue Homeland" doctrine reinforces its maritime claims. He also suggests that Turkey and Israel increasingly regard each other as national security threats since the fall of the Assad regime in Syria in December 2024, further intensifying Ankara’s concerns over strengthening Greek-Israeli ties, which it sees as a potential attempt at encirclement and isolation. Tekineş believes Turkey also perceives the GSI's completion as a loss of geopolitical leverage and economic opportunity, as Ankara seeks to position itself as a key energy bridge.
Despite Energy Commissioner Dan Jørgensen's emphasis on international law and fostering cooperation with Turkey, and the Commission's warnings against Turkish plans for a separate connection, Ankara is preparing a revised maritime doctrine. Its parliamentary consideration was delayed until October, leaving the final wording and its impact on the GSI uncertain.
Financial Impasse Between Greece and Cyprus
Beyond geopolitical complexities, the project is also grappling with significant financial obstacles. Greece and Cyprus have struggled for years to agree on the interconnector's financing model and how costs will be recovered from electricity consumers.
Greece’s Independent Power Transmission Operator (IPTO) assumed responsibility for the project, previously known as the EuroAsia Interconnector. Under the latest proposed arrangement, Cyprus would cover 63% (approximately €786 million) of the costs, with Greece funding the remaining 37% (around €460 million). Greece argues that Cyprus, as the primary beneficiary and the EU’s last isolated electricity market, should bear a greater financial share. Conversely, Cyprus seeks guarantees that consumers will not face excessive costs before the cable is operational.
In April, Athens and Nicosia requested the European Investment Bank (EIB) to reassess the project's viability, cost forecasts, and market integration. An earlier financing plan, which relied on EU grants, EIB loans, and developer investment, stalled due to EIB doubts about its financial viability. An EIB spokesperson confirmed that discussions on GSI financing are "ongoing," and any potential financing request would be evaluated in line with the bank's policies, with no conclusion reached yet. The project effectively remains under reassessment, with the possibility of seeking additional financing or investors if the original €1.9 billion cost estimate has increased.