The proposal from the Minister of Energy aims to establish a state organization with expertise to participate in the Cyprus-Greece electricity interconnection project and to avoid past mistakes, said George Papanastasiou to the Cyprus News Agency (CNA).

Mr. Papanastasiou suggested to the Electricity Authority of Cyprus (EAC) the creation of a separate company that would invest in the GSI company, which was established by the Independent Power Transmission Operator (IPTO) and will take on the promotion and financing of the interconnection project, provided that the State makes the final decision to invest €100 million in the project's capital.

"The state believes that such a project, once decided upon after due diligence studies and until the project is operational, requires an organization that knows the subject matter and has the expertise to prevent past mistakes from being repeated," Mr. Papanastasiou stated when asked about the reasoning behind the proposal.

The President of the EAC, George Petrou, stated that a board meeting has been scheduled for 15:30 today to be informed and examine the proposal.

"We certainly will not make a decision; the proposal needs to be studied, and we need to explore if there are alternative solutions," Mr. Petrou added, noting that the issue will also be discussed with the legal advisors who counsel the EAC regarding the separation of its various activities. It is noted that the EAC operates as a vertically integrated organization with distinct activities.

He noted that the EAC's management and trade unions would subsequently be informed before a decision is made.

The Minister's proposal aims to provide the EAC's Board of Directors with the option to make decisions on the matter while the Cyprus Hydrocarbon Company (CHC), a state-owned private law company, remains an alternative that could also assume this role with a simple change to its statute. It is believed that with such a company, utilizing EAC staff who possess expertise, the project could be separated and promote the development of a smart grid, which is necessary for the further integration of renewable energy sources into the energy mix.

It is noted that the EU's Third Energy Package established rules for the separation of supply and production from transmission networks.