Finance Minister Makis Keravnos warned on Monday that there is a risk if funds are allocated to the GSI electricity interconnection project, adding that studies indicate the project may not be viable.

Speaking after Monday afternoon’s Cabinet meeting, which approved the 2026 state budget, Mr. Keravnos was asked how much money has already been given for the GSI. He replied that no funds have been provided so far. When pressed further on why the project poses a risk, he said: “I think discussions on this matter are still ongoing. If funds are allocated, there is a risk. As I have said, there are studies suggesting the project is not sustainable.”

Responding to a question on whether the government has considered the “extreme scenario” of Cyprus shouldering the full cost of the interconnection if the ambitious project remains on hold, Mr. Keravnos noted that both internal and external risks had been assessed in preparing the budget, and “the GSI project is among those risks.”

When asked about the project’s cost, he referred to his earlier remarks: “No one knows the cost.” When a journalist pointed out that interstate agreements had been made and memoranda signed, Keravnos replied: “I am informing you of what I know. I have not signed any memorandum.”

Regarding whether the GSI-related project in Kofinou—funded with €100 million from the loan portion of the Recovery and Resilience Plan—will be removed, Keravnos said: “This is an issue under review. Based on the current data, and at least until the completion of the Recovery and Resilience Plan, unless new developments arise, it seems it will be removed.”

On the €67 million that must be returned to the European Commission for the Vasiliko project, Keravnos explained that this issue had only recently arisen, but it has been factored into the risks identified in the budget and “will be managed.”

He added that various efforts are underway: “There may be offsets with other funds that will come here. We do not give up—we are fighting battles,” he stressed.

Asked whether he was “negotiating the amount,” the Finance Minister firmly responded: “The amount is non-negotiable.”