Cyprus gets EBRD and EU financing for natural gas

Cyprus gets EBRD and EU financing for natural gas

Local Tuesday, 04 August, 2020

Cyprus’s dependency on oil for energy will be reduced after a €374 million landmark project introduces natural gas to the country for the first time.

Cyprus will benefit from cleaner air and reduced energy costs thanks to the introduction of natural gas to the country, with a project jointly financed by the European Bank for Reconstruction and Development (EBRD), the European Investment Bank (EIB) and the European Union (EU).

The EBRD is providing a €80 million loan to the Natural Gas Infrastructure Company of Cyprus (ETYFA) for the acquisition of a floating storage and regasification unit (FSRU) and the development of related infrastructure. The FSRU will be permanently anchored about 1.3 km off the coast of Limassol in Vasilikos Bay and will connect directly to the adjacent Vasilikos power station, the largest power plant in Cyprus.

The EU is extending a €101 million grant for the project under the Connecting Europe Facility. The remaining project costs will be funded by a €150 million loan from the EIB and a €43 million equity contribution from the Electricity Authority of Cyprus (EAC).

ETYFA is jointly owned by the Natural Gas Public Company (DEFA) of Cyprus and EAC, both state-owned entities.

“After a number of years of hard work, we managed to lay the foundations for developing this project of major importance for the energy future of Cyprus” Chairman of DEFA and ETYFA Symeon Kassianides said on Friday.

Currently, about 90 per cent of the island’s electricity supply relies on the importation of petroleum products and its energy system is isolated, without interconnections for electricity or gas. The new investment will allow Cyprus to replace expensive and polluting heavy fuel oil with cleaner natural gas.

The project is expected to reduce the country’s CO2 emissions by 10 per cent and lead to a substantial reduction in local air emissions (sulphur dioxide, particulate matter and nitrogen oxides). In the longer term, the flexible gas-fired Vasilikos power plant will play a key backup role as Cyprus moves increasingly to wind and solar power as part of an accelerating green transition in the EU.

“I would like to thank the European authorities and the EBRD for enabling us to come closer to the realisation of a national vision that will allow Cyprus to make the transition to a new energy era” added Kassianides.

“This is a milestone project for Cyprus and we are proud to support it. The project will be a major step forward in Cyprus’s decarbonisation trajectory. It will reduce both global and local pollution without compromising the island’s long-term transition to a low-carbon energy sector” EBRD Head of Energy for Europe, the Middle East and Africa, Harry Boyd-Carpenter, said.

The remaining project costs will be funded by a €150 million loan from the EIB and a €43 million equity contribution from the Electricity Authority of Cyprus (EAC).

Source: Cyprus Mail


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