The Greece Cyprus electricity interconnection project, the Great Sea Interconnector, has entered a decisive phase following a joint letter by the energy ministers of the two countries to the European Investment Bank requesting a due diligence process as a prerequisite for moving to a new financing stage.
After months of uncertainty and amid a political decision by both governments to commission an independent reassessment of the project’s studies, the request for the EIB to carry out due diligence with a view to financing the project with up to one billion euros serves a dual purpose, according to recent reports.
If the EIB study reaches a positive conclusion, expected in around six months, all political obstacles on the Cypriot side will be removed. A global financing institution of recognised credibility would effectively certify the project’s viability. At the same time, EIB lending would pave the way for the participation of additional investors, including state backed investment and development funds reportedly interested from the United States and the United Arab Emirates.
Moreover, EIB involvement would reduce project risk and, consequently, the return demanded by other investors, further strengthening the project’s overall viability. The one billion euros would correspond to around 50 percent of the project’s estimated total cost. The project already benefits from a 657 million euro grant from the European Union and contributions from electricity consumers in Greece and Cyprus during the construction phase.
If, however, the EIB response is negative, the project would be terminated without either government bearing political responsibility.
The way Cyprus and Greece have conducted their approach suggests that a positive outcome is more likely. A key factor differentiating the current situation from an earlier EIB rejection concerns a change in the project operator. Following the failure of the previous implementation body to secure financing, responsibility passed to the Greek power transmission operator ADMIE. At the time, a loan request by the former EuroAsia Interconnector entity, amounting to 600 million euros, remained unresolved. Sources at ADMIE have said the rejection was based on incorrect or incomplete assumptions.
What has changed is that the Greece Cyprus interconnector has now been included in the national energy and climate plans of both countries. The joint letter by energy ministers Papastavrou and Damianou notes that the project forms part of these plans. In Cyprus in particular, all assumptions for achieving green transition targets are based on the implementation of the interconnector.
Inclusion in the national energy and climate plans effectively obliges the European Investment Bank to reassess its previous negative decision from 2023. The EIB uses these plans as a core reference framework when deciding which investments to support, as they reflect member states’ priorities in energy transition, decarbonisation, renewable energy and climate resilience.
In practical terms, projects aligned with such national plans have a stronger chance of securing financing, as they serve both national and European policy objectives. This is why the joint Greece Cyprus letter explicitly underlines the project’s strategic alignment.
The EIB operates as both financier and evaluator of Europe’s green transition, examining whether projects contribute to emissions reduction, energy security, infrastructure resilience and the shift to a low carbon economy.
The Turkish Factor
At the same time, geopolitical considerations remain in the background, particularly whether Turkey might seek to obstruct the project. However, the context has shifted compared with previous years. The EIB has restarted its engagement with Ankara after freezing new lending in 2019.
In 2026, the two sides issued a joint statement of intent signalling renewed cooperation, with an initial financing package of around 200 million euros directed towards renewable energy, energy efficiency, decarbonisation and resilient infrastructure projects. In this context, any attempt to block a project under the EIB umbrella would not serve Turkey’s broader effort to re engage with European financial institutions.