Cyclades islands interconnector secures EIB backing

The European Investment Bank (EIB) and Greece’s Independent Power Transmission Operator (IPTO) have signed a long-term loan agreement of €108 million ($117.6 million) to support the Cyclades islands interconnector; a vital power interconnector between mainland Greece and the Cyclades islands.

Using Recovery and Resilience Facility (RRF) funds, the much-needed new electricity link consists of five underground and submarine cables with a total length of approximately 350km.

The interconnector marks the fourth stage of the Cyclades project that aims to link Santorini, Folegandros, Milos and Serifos, the last islands in the Cycladic complex remaining off the mainland grid.

All of the islands are located in the Western and Southern sections of the Aegean archipelago.

This is the first transaction under the €5 billion ($5.4 billion) mandate assigned to the EIB by Greece, sourced from the National Recovery and Resilience Plan, known as ‘Greece 2.0‘.

The mandate aims to further leverage EIB resources, support more private sector investment and close the investment gap ailing the Greek economy in the aftermath of the financial crisis and the Covid-19 pandemic.

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“The implementation of the 4th phase of the Cyclades islands interconnection with the mainland electricity grid, a project amounting to a total cost of €524 million ($570 million)… is expected to have a major contribution to safeguarding the energy security of Greek islands,” said Christos Staikouras, Greece’s minister of finance and EIB governor.

“This is an investment which significantly upgrades Greece’s energy infrastructure and supports the improvement of the energy mix in favour of renewable sources, while promoting the country’s economic growth and improving the living standards for our citizens in the Cyclades islands.”

Cyclades islands interconnector connections

The connection will allow the phase down of independent island systems that currently rely on more expensive, polluting oil-based generation capacity, and is hoped to deliver significant economic benefits, including cheaper and cleaner energy for citizens, while supporting regional development.

The project works, including the construction of four GIS substations on the islands, will be rolled out by 2025, with preliminary activities such as design, permitting and part of land acquisition having already taken place between 2018 and 2021.

“Through the opportunities provided by the Recovery and Resilience Fund, important initiatives are implemented that improve everyday life for the ordinary Greek citizen. A typical example is the signing of today’s agreement between EIB and IPTO regarding the submarine connection of the Western and Southern Cyclades with the mainland electricity grid by using RRF funds,” said Theodore Skylakakis, Greece’s deputy minister of finance responsible for preparing and coordinating the implementation of the Greece 2.0 plan.

The construction of Santorini-Naxos interconnection commenced in the first half of 2022.

The end of 2022 saw tenders for the interconnections of Folegandros, Milos and Serifos completed.