The European Investment Bank (EIB) and Greece’s Independent Power Transmission Operator (IPTO) have signed a long-term loan agreement of €108 million using Recovery and Resilience Facility (RRF) funds to co-finance the construction of a vital power interconnector between mainland Greece and the Cyclades islands.
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This agreement tops-up the EIB’s own resources loan of €157m signed on 16 December 2022.
The much-needed new electricity link consisting of five underground and submarine cables will have a total length of about 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 section of the Aegean archipelago.
This is the first transaction under the €5 billion mandate assigned to the EIB by Greece, sourced from the National Recovery and Resilience Plan, known as “Greece 2.0â€.
The mandate aims to further leverage EIB resources and support more private sector investment and thus close the investment gap ailing the Greek economy in the aftermath of the financial crisis and the Covid-19 pandemic.
The total cost of the project is €524m, receives €164.5 m grant from the RRP Greece 2.0 and is also financed by the project sponsor’s own contributions.
The connection will allow the phase down of independent island systems that currently rely on more expensive, polluting oil-based generation capacity, delivering significant economic benefits, including cheaper and cleaner energy for citizens, while also supporting regional development and cohesion.
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.
The construction of Santorini-Naxos interconnection commenced in the first half of 2022 and at the end of the year the tenders for the interconnections of Folegandros, Milos and Serifos were completed. ■